HUD Officials Say Mortgage Assistance Program Failed To Provide Help To Those In Need

Washington, D.C. (AHN) - Housing and Urban Development Secretary Steve Preston admitted on Thursday government and private efforts to help troubled homeowners are not hitting their targets as more houses continue to be foreclosed.

The FHASecure program launched in August 2007 has helped only 4,000 delinquent borrowers while the Hope for Homeowners programs has only 111 applications on hand since it was rolled out Oct. 1.

Preston said at the National Press Club, "The response has not kept up with the need... Many Americans who should be getting help are not getting help."

He acknowledged the two programs need major revamps as reflected by few lenders signed up and few borrowers applied for relief.

Lenders who were initially interested to join the Hope for Homeowners program said its design was faulty because while new loans could comprise 96.5 percent of the home's current value instead of the previous 90 percent, borrowers must still pay back 50 percent of any appreciation to the government if they refinance or sell their units. The new guidelines are applicable only to borrowers who pay up to 31 percent of their pre-tax income as amortization.

John Taylor, president of the National Community Reinvestment Coalition, added the HUD's attempt to stem foreclosures has been reduced to wishful thinking. "We're in the 34th consecutive month in which there has been a rise in foreclosures, compared to the previous year. We're breaking records every month in this country for foreclosures. But this agency and its program isn't doing what we want to accomplish, which is to turn the corner on the demise of the housing industry," Taylor told the Washington Post.