Borrowers unhappy with US govt's mortgage plan

Struggling home owners in the US who sought the help of the government’s foreclosure prevention programme, have had in most cases, negative experiences, according to a congressional report.

A study by the Government Accountability Office (GAO) revealed that three-fourths of nearly 400 housing counsellors involved in the process categorised the overall experience of borrowers with the housing programme as “negative” or “very negative.”

The study also indicated that 40 percent of about 300 counsellors experienced problems working with home loan servicers.

However, the Treasury Department defended its actions, saying that the survey was carried out in October 2010, before improvements were introduced.

The department also took issue with the limitations of the study, and said because there was no readily consistent database of borrowers seeking help, the GAO polled housing counsellors as a substitute for borrowers.

“The survey results do not characterise borrowers’ actual experiences with, but rather counsellors’ interpretations of borrower experiences,” the department said in response to the study.

The congressional report is the biggest criticism of the administration’s Home Affordable Modification Programme (HAMP), which has helped approximately 670,000 borrowers achieve lower mortgage payments.

The administration had originally estimated the programme would help three to four million home owners.

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