Saving their homes: Has Obama's plan helped?

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In June, CNNMoney profiled homeowners hoping to qualify for President Obama's foreclosure-prevention plan.
Four months later, they checked in to see if their was any update. Jose Rivera: Still waiting
Jose Rivera has been trying to refinance his mortgage since April under the president's foreclosure prevention plan, which allows those with little or no equity in their home to take advantage of today's low mortgage rates.
First, his loan

In June, CNNMoney profiled homeowners hoping to qualify for President Obama's foreclosure-prevention plan.

Four months later, they checked in to see if their was any update.


Jose Rivera at his home in Manchester, Conn.
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Jose Rivera: Still waiting

Jose Rivera has been trying to refinance his mortgage since April under the president's foreclosure prevention plan, which allows those with little or no equity in their home to take advantage of today's low mortgage rates.

First, his loan servicer told him he'd have to wait until the end of July because he has private mortgage insurance.

Now, Bank of America said to him it is awaiting guidelines from the federal government on how to refinance loans for those whose mortgages are valued at 125% of the home's worth. The Obama administration adjusted the refinancing program in July to cover more homeowners whose properties have declined in value.

The program's expansion was critical for Rivera, whose home value has dropped by more than $50,000 to $297,000. His mortgage is now 119% of his home's worth.

Rivera, a quality analyst at a financial services company, can afford to pay his mortgage, but would like to lock in today's rates, which have hovered below 5%. He is paying 7%. Rivera, who received no raise and only 20% of his typical bonus, thinks he can save nearly $500 a month by refinancing at 5%.

"This continues to be an extremely frustrating process," he said. "This program was approved in July, but here we are in October and apparently it is still not available to people like me who qualify and could very much use the assistance from the program."

A Bank of America spokeswoman said the servicer hopes to start processing refinance applications under the expanded program soon. The bank will also see whether Rivera qualifies for a loan modification.

Jeffrey Huegel: Lower payments

In late July, Jeffrey Huegel got the news he had been waiting for.


Jeffrey Huegel with his daughter, Sara. They live in Auburndale, Fla.
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Bank of America was willing to trade his adjustable-rate mortgage, carrying a 9.5% interest rate, to another loan with a much lower rate. His monthly payments dropped to $622 a month, from $1,200.

Though he applied for the Obama foreclosure rescue plan, he received a different type of modification. Bank of America says it put him into a two-year, interest-only mortgage with a 5.375% rate. After his loan adjusts, he will pay $844 a month.

Huegel, a sheriff's deputy, had fallen behind in his payments after facing hefty medical bills and a loss of overtime. He said the bank - which took over his loan when it bought his original lender, Countrywide -- started threatening him with foreclosure.

With his new mortgage, Huegel is able to make his payments on time.

"I can stay in my house and not have to worry about going into foreclosure," he said.

Bank of America said it will review Huegel's file to see why he was not placed in an Obama modification.

500,000 homeowners receive modifications

President Obama's foreclosure rescue program has helped 500,000 troubled homeowners by putting them into trial modifications with lower monthly payments.

The administration, however, continues to pressure loan servicers to do more as homeowners complain the process is still slow and frustrating.

Consumer advocates have said that the president's initiative has prompted servicers to help more people than ever before. But, there is still a long way to go.

The administration's efforts are only "chipping away" at the problem, said Barry Zigas, director of housing policy for the Consumer Federation of America.

What remains to be seen is how many of the half-million people in trial modifications will receive permanent help. The Treasury Department recently lengthened the trials to five months, from three months, to give banks more time to collect and process homeowners' income verification documents.

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