By Alan Zibel Associated Press
WASHINGTON — The Obama administration’s main mortgage assistance plan has provided permanent relief to 25 percent of borrowers enrolled, but nearly as many have dropped out.
The Treasury Department says that as of last month, 299,000 homeowners out of 1.2 million who started the program since its March 2009 launch had received permanent loan modifications. Under the program, banks reduce borrowers’ interest rates to as low as 2 percent for five years.
To complete the program, borrowers must make at least three payments on time. About 277,000 homeowners have dropped out during this trial phase, which often lasts far longer than the intended three months.
Many participants complain banks often lose documents. Banks say homeowners aren’t returning paperwork.