Mortgage, Foreclosure Prevention Program | featured news

More than 170,000 troubled homeowners are breathing a lasting sigh of relief now that they've received permanent modifications under the Obama administration's foreclosure prevention program.

Only about a third of the homeowners who have successfully completed the trial period of the Obama administration's mortgage modification program have been offered permanent relief, according to new federal data obtained by the Huffington Post.

The conversion rate -- about 33 percent -- is woefully short of what the Treasury Department had forecast. Treasury thought the rate would be "ranging up to 75 percent," Herbert M. Allison Jr., assistant secretary for financial stability, told the Congressional Oversight Panel in October.

An emergency assistance program that saves thousands from foreclosure each year is in the national spotlight.

The U.S. Treasury said its foreclosure-prevention program has cut mortgage payments for about 947,000 households, at least temporarily.

Millions more Americans are facing financial security as a result of stabilizing home prices, Treasury Secretary Tim Geithner said Sunday, even though only about 66,000 people have benefited from permanent mortgage loan modifications aimed to prevent foreclosure, a figure that has resulted in a House panel investigation.

The Obama administration’s effort to help homeowners avoid foreclosure may not achieve its goal of helping 3 million to 4 million borrowers, a government watchdog group says.

Policymakers have argued that it is a good deal for lenders to cut borrowers a break on mortgage payments, but foreclosing can be more profitable, experts say.

Housing advocates who work with homeowners say that while President Obama’s loan modification program could help thousands of New Yorkers, it has been slow to get off the ground.