$300 billion 'Hope for Homeowners' program created to help 400,000 — now estimate is 20,000

[Amerigo Vespucci]

Government sees fewer getting mortgage relief
‘Hope for Homeowners’ created to help 400,000 — now estimate is 20,000

http://www.msnbc.msn.com/id/27525375/

WASHINGTON - The government expects only 20,000 troubled borrowers will apply to refinance into more affordable home loans by next fall under a new mortgage aid program passed by lawmakers over the summer.

The $300 billion 'Hope for Homeowners' program was launched Oct. 1. Designed by lawmakers eager to respond to the mortgage crisis, the Congressional Budget Office had projected it would let 400,000 troubled homeowners swap risky loans for conventional 30-year fixed rate loans with lower rates.

But the early results are discouraging: the government received only 42 applications in the program's first two weeks, according to the Federal Housing Administration. The low turnout was first reported by the industry newsletter Housing Wire. Since the applications take about 60 days to process, no loans have been approved yet.

Steve O'Halloran, spokesman for the Department of Housing and Urban Development, called the projection of nearly 20,000 borrowers "an extremely preliminary estimate of early applications for a program that is barely a month old. Borrowers and lenders are continuing to sign up."

[Telly Savalas]

1. Have they done anything to market or promote the program?

I can't recall ever hearing about this program outside DU or buried in a small story in the middle of the newspaper. Folks that don't follow the news closely might not even know the program exists.

[SoCalDem]

2. Not many loans CAN or WILL be approved

because the hallmark of these "loans" was to get CASH out via re-fi, or to put people into homes they could never afford, with interest only..in other words..RENTING them a pricey home for cheap, so the "paper-pushers" could collect fees on the hot-potato loans..and opften the "renters" did re-fis for MORE cash out..

Conventional loans did not have the "cash back" perks..and required some real documentation..

These loans are the $20 Rolex version of home loans, so probably MOST people with them will not qualify for a normal loan..