Obama Loan Relief Plan Hits Goal Early
October 8, 2009 - 2:45 PMThe Obama administration said Thursday that 500,000 homeowners have had their loans modified under its mortgage relief plan, reaching a goal set over the summer.
The $50 billion program, launched in March, is designed to reduce foreclosures by lowering borrowers' monthly payments to more affordable levels. The program was slow to get going, but officials still believe the program is on track to help between 3 million to 4 million borrowers within three years.
The government has also launched a new effort to streamline the application process and simplified income and documentation requirements. And top administration officials were meeting Thursday with executives at large mortgage servicing companies to discuss their progress under the program.
"We've put significant pressure on servicers to ramp up their efforts," said Housing Secretary Shaun Donovan. "We're holding them to higher performance standards."
However, many housing advocates have been disappointed with the plan's progress and say that getting a loan modification is still a battle. Most lenders, they say, are still unwilling to reduce the borrowers' principal balance, a key concern in areas like California where prices have dropped dramatically.
"It's not working fast enough and it's not working broadly enough,' said Kevin Stein, associate director of the California Reinvestment Coalition, based in San Francisco. "There are no obvious consequences to the servicers for not doing what they're supposed to be doing."
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