20% of Modified Home Loans Re-default
The US Treasury released a report on the Making Home Affordable Program which showed that one out of five homeowners who received a loan modification under it were two months or more behind a year after the modification. The report showed the re-default rate for participants in the program was 4.6 percent after three months, 10.7 percent after six months, 15.9 percent after 9 months, and 20.4 percent after a year.
The program has taken much criticism from watchdogs, lawmakers, and housing experts. The program has made possible permanent modifications for 521,630 homeowners as of December 31st, whereas it was intended to help 3 to 4 million Americans in saving their homes.
Critics of the program point to the enormous difference between the number of permanent modifications executed under the program and the number of foreclosures filed. RealtyTrac reported last week that 2.87 million homes received notices of default, auction, or repossession in 2010.