Foreclosure Plan Shows Improvement

The latest report on the Obama administration foreclosure relief plan shows continuing momentum with some 650,000 borrowers having received a trial loan modification.

Though the program, known as Making Home Affordable, got off to a slow start in the late spring, it has shown marked improvement in recent months, passing the 500,000-mark in early October.

When the massive $75 billion program was first outlined in late February, the White House said it hoped to modify 3-4 million mortgages in two years, which would mean 375,000 to 500 million a quarter. It has since adjusted that to a three-year goal.

In all, the government hopes to assist as many as 7 million to 9 million needy homeowners, through loan refinancing or modification to prevent foreclosures. About 85 percent of the estimated 55 million outstanding mortgages are covered under the program.

Foreclosures continue to run at a record pace. But what was once the plague of unconventional mortgages—such as subprime and no-documentation loans—synonymous with the easy money days of the credit bubble is now the stuff of prime loans held by more creditworthy borrowers who are losing their jobs to the recession and thus becoming delinquent on their payments.

The government data does not yet include re-default rates.