Posts
By Margo Irvin First Posted: 06-24-09 01:43 PM | Updated: 06-24-09 04:03 PM
Last week, we invited readers to share their experiences with Obama's Making Home Affordable program, and asked you, "Is it working?"
By the numbers, the answer is "slowly." Three weeks ago, at the beginning of June, the New York Times reported that 100,000 loan modifications had been offered to struggling homeowners. This week, a Treasury Department spokesperson told the Huffington Post that participating mortgage servicers have extended 200,000 offers for trial loan modifications. How many of those have actually been approved? The Treasury is collecting data from servicers and plans to release official stats next week, but the AP reports that in excess of 50,000 loan modifications are already underway.
But the real measure of the program's success is not so easily quantifiable. We received dozens of stories of homeowners who tried for months to get approved for a Home Affordable loan -- and those who eventually navigated the bureaucratic red tape find that getting a modification doesn't necessarily mean everything's peachy.
Jeff from Salt Lake City, UT, is one of the 50,000 enrolled in the program with a trial loan modification, and it means that his family has a chance of staying in their home -- although they're waiting to see if it works for them in the long run before they celebrate. "I can't say if the Making Home Affordable plan is 'working' per se, but it isn't a total failure so far," he wrote.
Jeff and his wife Chiara bought a house in Salt Lake City in the fall of 2007. "We moved from Los Angeles to Salt Lake City partly because we could afford a home in Salt Lake where we were doomed to be perpetual renters it seemed in LA," Jeff said.
We put twenty percent down on the purchase of the home and were comfortably making the mortgage payments until December of 2008, when the company with which I was employed told me that it would no longer be able to pay me anything. I was able to start being paid at a small law firm not long after that, but I now only make about fifty percent of what I previously made at my old job. This drastic reduction in income and the simultaneous increase in many of our living expenses (utilities, fuel, health insurance, etc...) meant that, where we had been spending something like a third of our gross income on the mortgage before, now we were paying well over 70% of our gross income just to keep the house payments current.
Long story short, we were eating into our somewhat meager savings every month and could see the dark at the end of the tunnel. Plus, the market the way it was and is, we did not see much likelihood of selling our home faster than we would run out of money (not to mention the fact that our home, while not underwater, has lost significant value over the past year). We were pretty much resigned to either foreclosure or miracle when we heard the President announcing his Making Home Affordable plans on TV in March. When we looked into it further on the government website set up to explain the program, it seemed we were tailor-made for the Home Affordable Mortgage Program.
Jeff's struggle to negotiate with his lender echoes others that the Huffington Post has covered: delays and inefficiency. "Sometimes I called every day of the week to see if anything was developing - if there were any other documents they needed from me, anything. Some people who answered the phones were helpful and seemed to know what they were talking about, some were quite rude and seemed to have no idea what was going on. Sometimes I would get conflicting information in two phone calls on the same afternoon."
Read on at The Huffington Post to find out what happened to Jeff.
And here is the rest of it.
