Federal Foreclosure Program Has Mixed Results

Washington, DC, July 21, 2010--More delinquent homeowners learned in June that they don't qualify for foreclosure help in the Obama administration's program, according to new federal data.

In addition, more people also received lasting help from the administration's main foreclosure rescue program. Some 51,205 troubled homeowners received long-term mortgage modifications in June, bringing the total to 389,198.

Some 91,118 people in trial modifications were canceled in June, bringing the total to 520,814 since the program began in the spring of 2009. More than 60% of those who dropped out last month had been in trials for at least half a year.

Homeowners usually are kicked out of the trial program because they do not make the required payments, meet the qualifications or submit the needed paperwork. Going forward, loan servicers will gather the necessary documents and review homeowners' eligibility before entering them in trial modifications.

Once their trials are canceled, about 45% of homeowners receive alternate modifications, often one from their loan servicer. Some 8.9% had foreclosure proceedings started against them and 1.3% lost their home in foreclosure.

Only 364,077 troubled borrowers remain in the trial phase, including 38,728 who entered the program in June. Nearly 166,000 have been in trials for at least six months.

Delinquency rates remain low, at least for the time being. Only 5.8% of those who received permanent modifications late last year were at least 60 days delinquent after six months.

"Early indications are the modifications are sustainable," said Phyllis Caldwell, who heads the Treasury Department's Home Preservation Office.