The main Obama administration initiative, Home Affordable Modification Program (HAMP), designed to give aid to borrowers having trouble paying their mortgage payments, has been extended until the end of December 2015. This will give homeowners an additional two years to receive aid from the program.
Despite the housing market gains, many homeowners are still struggling. The HAMP program provides aid through the reduction of interest rates, extension of loan terms, or occasionally the reduction of mortgage principles. Since the program was first launched in June of 2009, it has undergone several improvements designed to reduce a borrowers payments to 31% of their gross monthly income.
As of the end of March, more than 1 million homeowners have been able to receive permanent modifications to their mortgages, by lowering payments by an average of $546 monthly which is 38% less than the homeowners were previously paying.
Between private bank modifications and HAMP, the HAMP program has been slightly more effective, enabling more borrowers to continue with payments on their home. Plus the homeowners who used the HAMP program have had lower rates of repeat defaults on their mortgages.