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More troubled homeowners have fallen out of trial mortgage modifications than have received long-term help, a new government report shows.

Walking away from a mortgage you can still afford to pay has consequences; everyone knows that. Your credit score is shot and it can be impossible to get credit.

The number of troubled homeowners falling out of President Obama's foreclosure rescue plan soared in April.

Pressure is mounting on loan servicers and investors to reduce troubled homeowners' loan balances...but the two largest owners of mortgages aren't getting the message.

Unemployed? Owe more on your mortgage than your home is worth? Your state might one day pay your mortgage.

Fannie Mae, the government-backed mortgage giant, announced Friday that it will tighten lending requirements for the interest-only loans and adjustable rate mortgages (ARMs) it backs.

If you're delinquent on your mortgage, your credit score will suffer. Everyone knows that. The question is, by how much?

President Obama's foreclosure prevention plan has helped nearly 228,000 delinquent borrowers keep their homes, the administration said Wednesday.

The Obama administration's mortgage-modification program is not keeping pace with the deluge of foreclosures hitting the market, a government watchdog found.

The HAMP program has finally started to get some momentum and provide a substantial amount of troubled homeowners with a way out of foreclosure. Unfortunately, this help seems to be too little, too slow, and too late. However, one must accept that steps are being made and that although not all targets have been met, significant progress is finally occurring.

Let’s look at the hard data.

-       After over a year since the program started 168,000 households now have permanently modified mortgage. This represents an increase of over 50,000 from January 2010 and 100,000 from December.

-       There 92,000 trial modifications in the final stages before a permanent modification. According to Treasury the average saving for each homeowner is around $500.

This is good news, and it is certainly a help to those that have been fortunate enough to benefit from it. However, the truth is that it is a drop in the bucket when compared to the 6 million + troubled homeowners that are behind in their payments and are at risk of foreclosing on their mortgages.

When the program started it was hailed as the most aggressive plan the Government was enacting to control the housing crisis. Over a year later only a million people have entered the program, a far cry from the four million households the program set out to help.

A words batter has started over these claims. The Treasury is now claiming the goal was to provide help to 4 million homeowners not make sure they actually got it. If you accept this interpretation, HAMP is between 35 to 45 percent of the way to achieving its goal. Of course, critics claim that the Treasury is simply moving the goalposts.

What is even more worrying is how the borrowers that enter the program are being treated. Valparaiso University School of Law carried out some interesting research on the HAMP program and discovered that although 66% of all borrowers in the trial stage made all their payments, less than 25% have received a permanent modification to their mortgage. The reason for this is lack of paperwork and the loan modification limbo created by the complex and lengthy red tape.

Nevertheless, the Government remains confident, and a Treasury Department spokeswoman has claimed the rate of loan modification completions will rise in the next few months.

Another scary fact is that the number of people entering the program is actually slowing down. In February 73,000 signed up, which represents only half the number of homeowners that did so in October and November.

In conclusion, although the Government is starting to make a substantial dent in the number of homeowners it is offering help to; it is a far cry from the objectives the program set out to meet.

Related posts:

1. Treasury Moves The Goal Posts of HAMP and Lowers Expectations for the Loan Modification Program.
2. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
3. Loan Modifications Are Going To Be Simpler, What Do You Need Now?

Related posts:

1. Treasury Moves The Goal Posts of HAMP and Lowers Expectations for the Loan Modification Program.
2. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
3. Loan Modifications Are Going To Be Simpler, What Do You Need Now?