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Real Rich: Banks Blame Homeowners for Failure of Mortgage-Relief Plan

A mere 5 percent of those who applied for mortgage refinancing under the administration's mortgage-relief plan have received permanent loan modifications.
 
 
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A congressional watchdog panel released a report today that categorically qualifies the Obama administration's mortgage-relief plan as a failure. Only 10,000 homeowners -- or less than 5 percent of all who completed trial programs -- received permanent loan modifications that brought their payments to an affordable rate.

Fewer than five percent.

That dismal success rate translates to only $2.3 million of the $75 billion committed to the mortgage-relief program having been been spent, according to the report. And not only have a totally insignificant number of people been able to refinance their predatory mortgage loans, but foreclosures are on the rise -- and expected to continue rising.

The way the mortgage-relief program works is that homeowners must make three initial reduced payments under a trial period. After successfully making those payment on time, borrowers must provide proof of income and a financial hardship affidavit.

Daniela Perdomo is a contributing writer & editor at AlterNet. You can follow her on Twitter @danielaperdomo.