Homeowners taking advantage of mortgage aid under a federal foreclosure-prevention plan are being dropped from the program at an increasing rate, potentially forcing more borrowers out of their homes as the program struggles to make an impact, according to Treasury data released Monday.
The program, known as Making Home Affordable, pays lenders to lower the mortgage payments of distressed borrowers, but it has struggled to have a significant effect on the country’s foreclosure crisis. Now it is increasingly losing borrowers who didn’t submit enough documentation to prove they qualified for the help or who fell behind on their new lower mortgage payments.
The number of borrowers who were dropped reached more than 280,000 in April, according to the Treasury data. That compares with about 157,000 borrowers who had lost their mortgage aid in March and means that more than one of every five borrowers who have entered the program eventually lost their aid.
Full story: Spike seen in number of homeowners who lost federal mortgage aid