Federal officials have reported that the Making Home Affordable program created by the Obama administration to help curb increasing foreclosures around the nation has reached its goal of 500,000 which is three weeks ahead of the scheduled date of November 1st.
The program, which was often-criticized because many people felt that it was too bogged down with paperwork to be effective, was designed to help homeowners avoid home foreclosures by modifying their mortgages and thus helping them stay in their homes.
Since the program started this past March banks and mortgage servicing companies were very slow pushing modifications through the program but finally began a more aggressive approach as time passed.
A government oversight report released last week showed doubts that the program would complete its overall goal of preventing 3 million to 4 million foreclosures nationwide.
The program had a lot of issues that needed to be worked out initially, but finally its pace has picked up.
However, Industry officials have said that banks were already modifying loans on their own since late 2007 and have helped about 2 million people since then.
Also, the Congressional Oversight Panel that is monitoring the use of the government bailout money has concerns about the programs effectiveness.
Their concern is that the program may not do enough to control the crisis and the loan modifications may not help put homeowners into a long-term stable situation.
Many analysts have also echoed those concerns, even though the program is helping ease the foreclosure crisis, it's unlikely it will end it altogether.
Now that the Making Home Affordable program is now shifting into a higher gear, it may not be high enough to forestall the continued increase of foreclosures and declining home prices.
Many times mortgages that have been modified tend to default to new terms at a higher rate. It's estimated that 4.5 million homeowners who are in foreclosure or have mortgages that are 90 days or more delinquent, the program may only save about one million of them.
The Obama administration has indicated that they understood that foreclosures would continue, but their intention was to keep putting pressure on mortgage companies.
Housing and Urban Development Secretary Shaun Donovan said, "We believe we are absolutely moving in the right direction and have reached an important turning point in our modification efforts, but we are nowhere near the finish line yet."
Last Thursday officials from HUD and the Treasury Department met with top mortgage servicers in Washington to discuss how to improve the efficiency of the program as well as it's responsiveness to borrowers.
The program was originally designed to help ease foreclosures by providing help to struggling homeowners by modifying their mortgages, which may include cutting back their interest rates and extending the length of their loans. Sadly, the government guidelines as well as other rules were not released timely, and thus banks shied away from the program even after it was later refined.
Luckily, the pace of the loan modifications has nearly doubled since the beginning of August.