There was a sobering story over at Businessweek.com discussing the lack of success so far for the H4H program. Here are some excerpts:
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.
20,000 instead of 400,000 people helped? That is 95% less than expected. If this were a business it would be considered a catastrophic failure. The article continued:
“It just reinforces that none of the federal efforts to date seem to be getting the job done,” said mortgage industry consultant Howard Glaser, a former housing official in the Clinton administration. “There’s just no question that when a new president and Congress come back to town, they’re going to take much more aggressive intervention.”
…
Meanwhile, consumer advocates and the banking industry alike have been eagerly awaiting an announcement of an ambitious plan to help around 3 million borrowers avoid foreclosure, though it remained uncertain whether the Bush administration would do so.
“The question on the table is, do we need to do more to help homeowners? If that answer is yes, then there’s a lot of other issues that have to be analyzed,” White House press secretary Dana Perino said Monday.
Still, many believed the Bush administration would eventually act, as foreclosures continue to skyrocket. “I think they finally get it,” said John Taylor, president of the National Community Reinvestment Coalition, a consumer group in Washington.
Who knows what the government will come up with but so far the plans they have tried (FHASecure and Hope 4 Homeowners) aren’t coming close to making a broad difference.