WASHINGTON — A number of struggling homeowners were helped by an Obama administration loan modification program in August, but the program has helped far fewer people than initially forecast.
Treasury Department statistics released Wednesday show the government's Home Affordable Modification Program helped nearly 691,000 homeowners avoid losing their homes through permanent loan modifications, up from around 675,000 in July.
Those numbers are well below the initial goal of helping 3 million to 4 million borrowers.
The program was announced in early 2009 as a way to aid homeowners struggling in the wake of the housing bust. Lenders get paid incentives to help borrowers avoid foreclosure by reducing their mortgage payments.
Homeowners must make trial payments before the loan modification can become permanent. More than 891,000 have had their modifications canceled.
About 10,800 borrowers in the HAMP program have received reductions in their loan balances, the Treasury report said. Those homeowners have received a median write down of about $68,000, or 30.5%.
The administration also set up a parallel initiative called the Home Affordable Refinance Program to help borrowers whose properties have declined in value to refinance without putting down more cash.
That refinancing program assists homeowners whose loans are guaranteed by government-controlled mortgage companies Fannie Mae and Freddie Mac. It has enrolled about 865,000 homeowners through July, short of initial projections of assisting 4 million to 5 million borrowers.
The Obama administration and regulators have been working on ways to expand access to that program, and an announcement is expected in the coming weeks.
"We must make it easier for more people to refinance at interest rates that are now near 4%," said Raphael Bostic, an assistant secretary at the Department of Housing and Urban Development. "That alone can put more than $2,000 a year in a family's pocket, and give a lift to our still-struggling economy."