Have Government Programs Helped Homeowners?

photo illustration of house held by a giant hand
photo illustration of house held by a giant hand

The national housing market is seemingly improving all the time, but unfortunately for many homeowners across the country, negative equity is still a significant burden that can lead to large amounts of stress and financial difficulties. However, government programs still continue to help these people to better deal with the lingering issues underwater mortgages can cause.

Federal efforts like the Home Affordable Modification Program and other initiatives have helped a large number of people whose homes are now worth less than they owed on their mortgages, according to the latest Housing Scorecard from the U.S. Department of Housing and Urban Development. For instance, more than 1.1 million people have been able to obtain permanent HAMP modifications, which have combined to save Americans approximately $19.1 billion on their underwater mortgage payments altogether. That comes to an average of about $546 in mortgage savings per month per person.

In addition, another 1.7 million Americans have been able to receive loss mitigation assistance and early delinquency interventions from the Federal Housing Administration, the report said. Finally, more than 3.5 million households have been able to receive at least proprietary modifications to their mortgages through the end of February from lenders enrolled in the HOPE Now program.

Getting out from under negative equity can help homeowners to achieve their goals of selling properties they might not have been able to offload in the past, and these efforts coupled with rising prices might be allowing more people to put these houses on the market, the report said. In all, 1.93 million existing homes are now on the market, up from 1.9 million the previous month, though that figure is still well below the 2.32 million observed at this time last year.

Meanwhile, perhaps as a result of these federal efforts, mortgage delinquency slipped to 3.6 percent in March, down from 3.8 percent observed both in February and March 2012, the report said. That's also an appreciable improvement from the 4.4 percent observed in December 2008.

The housing market is expected to continue improving for some time, as low interest rates could linger at least into next year, and prices, while rising, are still low enough to keep affordability fairly high. That, in turn, could lure more buyers into the market to scoop up the slowly growing number of homes for sale.

See more on Credit.com:
The First Thing to Do Before Buying a Home
19 Confusing Mortgage Terms Deciphered
Owning a Home: Investment or Liability

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Mel Watt To Run Federal Housing
Mel Watt To Run Federal Housing