Data from the Federal Housing Administration this Friday suggests that the much-ballyhooed Hope for Homeowners refinancing program, included in housing legislation passed this July, has yet to really make much of a dent in a troubled mortgage market. Bi-weekly FHA operational data was released today for the Oct. 1 though 15 reporting period, and showed that just 42 mortgage applications were filed under the H4H program during the period and none were endorsed. During the same period, 203 mortgage applications were filed under the FHASecure program -- another troubled-borrower refinancing program -- and 49 were endorsed. "Everyone in the mortgage market is waiting to see if this program is going to be as successful as legislators had hoped for," said one source that spoke with HW, on condition of anonymity. Although three months has passed since the original bill was passed, Department of Housing and Urban Development spokesman Lemar Wooley said in an interview the delay is often exaggerated. "The way we look at it, it hasn't been that long," he said. "It's only been four weeks." People who question the speed of a program aren't considering that the H4H program went into effect on Oct. 1, Wooley said. "Under the law, we were mandated to put the program together along with three other agencies working together on it -- that was in late July -- and we were told to have it ready to roll Oct. 1 and we met that deadline," Wooley said. "The problem is all the details relating to it obviously came out Oct. 1 and the lenders have to get the word and so on." The problem, however, may not be lenders, who say they're more than willing to begin processing the loans. Instead, the problem sits with third-party investors that have thus far proven unwilling to take the minimum 10 percent haircut required to put borrowers into the program, plus an upfront premium payment--losses are actually far greater for investors who participate, given that the 10 percent figure is based on a current appraisal, and not original LTV. John Sorgenfrei, president of Florida-based Assurance Home Loan, Inc., said he receives calls from eight to 10 borrowers daily about participation in the program. For the time being, he has been forced to make them wait, as no investors so far have bought into the program. "I wish I could say we have something in the works," he said. "We're waiting for the investors to decide whether it's going to be a third-party participation or just exclusively held for the lenders." Robert Paduano, managing director at Allegro Funding Corp., licensed to operate in 24 states and signed up on the H4H list, also said in an interview that the hold-up on the program has resulted from investors unwilling to accept rewrites on existing loans. "The [H4H] program is a joke," he said. "It's not going to materialize into what we had hoped for because most lenders are unable or unwilling to write down the principal balance to 90 percent because their investors won't let them." Allegro receives hundreds of calls a day from borrowers wanting to rewrite their loans. Paduano said the company sends out a package and a simple statement: "As soon as something's about to be rolled out, we'll give you a call." Although most of the borrowers who call Allegro have already contacted their existing lenders, and some have even received permission to participate, Paduano said he cannot help them until investors agree to buy the government-insured loans -- which he also says simply isn't happening. Efforts by the Federal Deposit Insurance Corp. to guarantee $40 to $60 million in distressed mortgages will not address the looming foreclosures, either, he said. "The government's not going to get ahead of this," he said. "Foreclosures are going to double in the next two years and what they're proposing to do now is what IndyMac [Federal Bank] did, which was to lower the interest rates." But borrowers who owe $100,000 or more than what their homes are worth are not going to care about lower interest rates when it's cheaper to rent, Paduano said. People will start walking out of their homes and the government will not keep ahead of the foreclosure rates unless immediate action is taken to get lenders on board with the H4H program. "We should be pushing for the government to insist that whoever got money from the bailout has to participate in HOPE for Homeowners," he said. "It shouldn't be optional." Read the list of participating lenders. Write to Diana Golobay at