Making Home Affordable Loan Modification A Lost Cause?

Known by a variety of names (Obama Loan Mod, HAMP, Making Home Affordable, etc); is the government loan modification a lost cause?  At present time the "numbers" are dismal and I can only conclude that this effort to help homeowners retain their homes has by and large been an abject failure.

Here are some key observations based on statistics (the Treasury Department's figures mind you) thru April 2010:

1.  Fewer than 1 in 5 of the trial modifications initiated under the program have resulted in a permanent loan modification.

2.  The average back-end ratio (cost of housing + all other debts expressed as a % of gross monthly income) for permanent modifications granted under the program is 64.3%.  This is an appalling figure.  Current underwriting guidelines for home loans wouldn't grant you a new loan with that high of a back end ratio and yet it is considered ample relief within the context of a loan modification.  Making Home Affordable fails to adequately address the specific circumstances of individual homeowners.

3.  An interesting omission from the Treasury Departments report is the redefault rate for both trial loan modifications and permanent loan modifications.  I wonder why they are unwilling to publish that within the report?  I think we know the answer!

I'm not expressing my stance on whether or not the government should be involved in assisting homeowner's to retain their homes.  The point I'm trying to make is this...

The Making Home Affordable Loan Modification is a failure that provides false hope, depletes distressed homeowners of their remaining funds while they make trial mod payments (often 8 or more trial payments before they are approved or declined for permanent modification) and often results in the loss of the home via foreclosure.