Loan Modification Program Has Spent Barely 1% of Available Budget

[The Straight Story]

Loan Modification Program Has Spent Barely 1% of Available Budget

While millions of Americans have struggled to keep from losing their homes to foreclosure, the Obama administration has spent only a little more than 1% of the $50 billion it promised to help stem the mortgage crisis.

So far, the Department of the Treasury has allocated only $600 million to the foreclosure prevention program, which is supposed to pay incentives to mortgage servicers so they will modify loans. According to ProPublica, the largest payouts have gone to JPMorgan Chase ($79 million) and Bank of America ($45.1 million).

ProPublica cited two reasons for the failure to spend more money. One, very few loan modifications have been processed, and it is only at that juncture that the government pays banks and others for adjusting the payment terms of homeowners.

Two, incentives are paid out over time, and it may be too early to judge how many people have been able to take advantage of the relief.

http://www.allgov.com/Top_Stories/ViewNews/Loan_Modification_Program_Has_Spent_Barely_1_Percent_of_Available_Budget_101113