The Treasury has Warned of Oncoming Rush of Millions of Foreclosures

A mere 12% of the homeowners in USA who are qualified to have their loans modified have applied for the same. But the Treasury has warned of the oncoming rush of millions of foreclosures. The Treasury has started to release reports each month giving progress of the loan modification measure of HAMP.

The report released by the Treasury showed that 360,165 have managed to reduce their monthly mortgage commitments in August 2009. It is an increase over July numbers reading 235,247. But despite this a senior official from the Treasury admitted that much has yet to be done to mute the severe housing crisis that is refusing to soften.

July figures showed that a mere 9% of the estimate homeowners who were qualified had had modified their loans. Michael Barr the assistant secretary of the Treasury commented that in August there has been slight improvement. Speaking to the House Financial Services sub-committee he said that this programme that had kicked off from last February had brought together banks, servicers and the house owners who were at risk. The target of the programme is to help half million borrowers by 1st November.

But this will just scratch the surface of the jumbo problems of the national economy. Barr added, “Even if HAMP is a total success, we should still expect millions of foreclosures.” Meanwhile the government and the mortgage industry are continuing their endeavours to try to bring back stability to the crisis ridden housing section.

Barr opined that to bring back health to the economy the key factor is the housing market. Prices have slumped and demand for houses has been sluggish. He stressed that the housing sector was “at the center of our financial crisis and economic downturn.” Barr observed that experts are apprehending over 6 million people may lose their houses in the forthcoming three years.

He said, “Much more remains to be done and we will continue to work with other agencies, regulators and the private sector to reach as many families as possible.”

The report from the Treasury department pointed out that many lenders had not cooperated in helping many of the borrowers despite them being eligible for loan modification. Other lenders had helped few borrowers who were delinquent by 60 days or more on the mortgages. One bank claimed that it had on its list only a single qualified borrower!

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