July 25, 2013
Nearly half of the US homeowners, who had their loans modified under a government aid program, are now defaulting again on their mortgages at an alarming rate, according to a report on Wednesday by a watchdog organization.
The report by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), said that around 865,100 homeowners have avoided foreclosure with the help of The Home Affordable Modification Program, also known as HAMP, through loan modifications.
However, more than 306,000 other homeowners had redefaulted on their modified mortgages as of April, the report added.
HAMP was set up to help struggling homeowners avoid foreclosure by working with their lenders to lower monthly mortgage payments. The Obama administration launched HAMP in 2009 to aid struggling homeowners impacted by the housing crisis.
“This is a program where there’s not enough people being helped,” Christy Romero, special inspector general for SIGTARP, told Reuters.