If "An ounce of prevention is worth a pound of cure," the nation's lenders have thus far not done a very good job becoming part of the solution. Turns out that Federal foreclosure prevention programs have helped a mere 12-percent of those homeowners who have applied to have their loans modified. This is not good news.
HAMP, a/k/a the Home Affordable Modification Program, aims to reduce mortgage payments for underwater homeowners to as little as 31-percent of their pre-tax monthly income. This figure includes principal, interest, taxes and insurance and other debts if possible. Amazingly only one 1-million or so homeowners have applied for loan modifications under the program!
116,00 homeowners or 12-percent have had their loans modified. 60,500 have been given outright denials and 76-Thousand have been approved but have not yet to receive "final" approval. Nearly 850-Thousand homeowners are in "trial" modification plans and are awaiting approval.
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