How much is the housing help helping?

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The New York Times offers a dubious account of how quickly federal efforts to prevent foreclosures are taking hold. I got at that a bit in a story I wrote a couple weeks ago. Though I’m not quite as quick to pass judgement. When I wrote that piece in late-April, the Feds had only just announced a way to deal with the second liens of borrowers trying to get modifications. That was a major omission in the original plan, and I’m actually okay with lenders and servicers taking a month or so to update their systems and retrain their people. I’m still in the wait-and-see camp.

And speaking of seeing… this morning we got our first look at how many people have been processed through the mortgage-rewrite program and its sister-act refinancing plan. Thus spoke Treasury and Housing and Urban Development (HUD) on loan modifications:

More than 55,000 Home Affordable Modification offers have been extended to qualifying borrowers.  Additionally, servicers have mailed more than 300,000 letters to homeowners who are potential candidates for the program.

And on refis:

Since the launch of Making Home Affordable… thousands of underwater borrowers have refinanced under the Home Affordable Refinance Program. Fannie Mae has had over 233,000 eligible refinance applications through its refinancing program, with more than 51,000 of these having loan-to-value ratios between 80% and 105%.

Now, I don’t necessarily think that’s a lot. The folks I talk to—at banks, servicing shops and Fannie/Freddie—all pretty much think these two programs have a whole bunch more potential which we just haven’t seen kick in yet.

Maybe the two add-ons that Treasury/HUD threw into the mix today will help. There are now to be financial incentives for lenders, servicers and borrowers to pursue short sales (i.e., paying off the mortgage at less than face-value) and deeds-in-lieu of foreclosure (i.e., simply handing back the keys). The other change is to pay more for modifications that are made in places where house prices continue to fall steeply.

Two more carrots. I now return to wait-and-see.