When the administration launched its foreclosure prevention program, it committed [1] to spend up to $75 billion. By the end of March, more than a year later, only about $242 million had actually been paid out.
That number is sure to rise, but it’s a testament to how slowly the program has progressed. The low total is a direct result of the low number of permanent mortgage modifications so far [2]: 228,000 as of the end of March. About 1.2 million homeowners have begun trial modifications, but many have been stranded in the trials [3] for longer than the three months they were designed to last. About 158,000 have been dropped from the program, either because they couldn’t make the payments or because of disqualification.
The program provides incentives to mortgage servicers, investors, and homeowners to encourage modifications to more affordable monthly mortgage payments—but those incentives are paid out only when a modification becomes permanent.
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