The Department of Housing and Urban Development teamed up with the Treasury Department on Thursday to announce an extension of the Obama administration’s Making Home Affordable Program through Dec. 31, 2015.
The new deadline was determined in coordination with the Federal Housing Finance Agency to align with extended deadlines for the Home Affordable Refinance Program and the Streamlined Modification Initiative for homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac.
The program deadline was previously set to end Dec. 31, 2013.
The Making Home Affordable Program is a critical part of the Obama administration’s efforts to provide relief to families at risk of foreclosure and help the housing market recover from the housing crisis, HUD explained.
"The housing market is gaining steam, but many homeowners are still struggling," said Treasury Secretary Jacob Lew.
He added, "Helping responsible homeowners avoid foreclosure is part of our wide-ranging efforts to strengthen the middle class, and Making Home Affordable offers homeowners some of the deepest and most dependable assistance available to prevent foreclosure. Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry."
Since its creation in March 2009, roughly 1.6 million actions were taken through the program to provide relief to homeowners and, consequently, nearly 1.3 million homeowners were helped directly by the program.
As of March, more than 1.1 million homeowners received a permanent modification of their mortgage through HAMP, with a median savings of $546 every month — or 38% of their previous payment.
Since the fourth quarter of 2008, Fannie Mae and Freddie Mac completed more than 2.7 million foreclosure prevention actions. Approximately half of these actions are permanent loan modifications, including more than 435,000 permanent HAMP modifications, according to the FHFA.
"One of FHFA’s priorities is to provide assistance to struggling borrowers who are at risk of losing their homes," said Ed DeMarco, current acting director of the FHFA.
He added, "These extensions keep two valuable foreclosure prevention programs available to those who need them. The extensions also align the end date for three key assistance programs that were developed in response to the housing crisis."
Since 2009, Freddie Mac has helped more than 830,000 borrowers avoid foreclosure and nearly 230,000 of these families were assisted through HAMP, said Tracy Mooney, senior vice president of single-family servicing and REO for the GSE.
The Making Home Affordable Program has also put into place important protections for homeowners that have helped inform efforts to create standards for the mortgage servicing industry.
This includes requirements for mortgage servicers regarding clear and timely communications with homeowners and protections to ensure that they are evaluated for assistance before being referred to foreclosure.
"The Making Home Affordable Program has provided help and hope to America’s homeowners," said HUD Secretary Shaun Donovan.
He concluded, "Families across the country have used its tools to reduce their principal, modify their mortgages, fight off foreclosure and stay in their homes — helping further stimulate our housing market recovery. And with this extension, we ensure that the program keeps supporting communities for years to come."