We wrote a couple of weeks ago about how the federal government’s program to help homeowners avoid foreclosure is flopping. The government had projected 400,000 could be helped by the "HOPE for Homeowners" program. As of two weeks ago, just 42 people had applied. The government has budgeted $3.9 billion for the program.
"Clearly, meaningful changes were needed," said Steve Preston, secretary of the Department of Housing and Urban Development, which runs the program.
And changes there have been.
As of last week, the program has been expanded in several ways. The government increased the amount it will lend homeowners, depending on the value of the house. Borrowers would have ten years longer to repay their loans – up to 40 years. And there are new provisions to pay other parties with legal interests in the property who, under the old arrangement, "were not guaranteed any return at all."
So, have these changes had any effect on the low number of applications?
It’s hard to know, because HUD has not returned any of our calls in more than two weeks. We have also contacted Federal Reserve Board Governor Elizabeth Duke, who sits on the board that oversees the program. She referred our questions back to HUD.