<!– /* Font Definitions */ @font-face {font-family:Wingdings; panose-1:5 0 0 0 0 0 0 0 0 0; mso-font-charset:2; mso-generic-font-family:auto; mso-font-pitch:variable; mso-font-signature:0 268435456 0 0 -2147483648 0;} @font-face {font-family:”Cambria Math”; panose-1:2 4 5 3 5 4 6 3 2 4; mso-font-charset:1; mso-generic-font-family:roman; mso-font-format:other; mso-font-pitch:variable; mso-font-signature:0 0 0 0 0 0;} @font-face {font-family:Verdana; panose-1:2 11 6 4 3 5 4 4 2 4; mso-font-charset:0; mso-generic-font-family:swiss; mso-font-pitch:variable; mso-font-signature:-1593833729 1073750107 16 0 415 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-unhide:no; mso-style-qformat:yes; mso-style-parent:”"; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:”Times New Roman”,”serif”; mso-fareast-font-family:”Times New Roman”;} h1 {mso-style-unhide:no; mso-style-qformat:yes; mso-style-link:”Heading 1 Char”; mso-style-next:Normal; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; page-break-after:avoid; mso-outline-level:1; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-font-kerning:0pt;} p.MsoBodyText, li.MsoBodyText, div.MsoBodyText {mso-style-noshow:yes; mso-style-unhide:no; mso-style-link:”Body Text Char”; margin:0in; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-fareast-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”;} span.Heading1Char {mso-style-name:”Heading 1 Char”; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Heading 1″; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana; font-weight:bold;} span.BodyTextChar {mso-style-name:”Body Text Char”; mso-style-noshow:yes; mso-style-unhide:no; mso-style-locked:yes; mso-style-link:”Body Text”; mso-ansi-font-size:11.0pt; mso-bidi-font-size:12.0pt; font-family:”Verdana”,”sans-serif”; mso-ascii-font-family:Verdana; mso-hansi-font-family:Verdana;} .MsoChpDefault {mso-style-type:export-only; mso-default-props:yes; font-size:10.0pt; mso-ansi-font-size:10.0pt; mso-bidi-font-size:10.0pt;} @page Section1 {size:8.5in 11.0in; margin:1.0in 1.25in 1.0in 1.25in; mso-header-margin:.5in; mso-footer-margin:.5in; mso-paper-source:0;} div.Section1 {page:Section1;} /* List Definitions */ @list l0 {mso-list-id:55275773; mso-list-type:hybrid; mso-list-template-ids:1766504880 -1489760742 67698691 67698693 67698689 67698691 67698693 67698689 67698691 67698693;} @list l0:level1 {mso-level-start-at:0; mso-level-number-format:bullet; mso-level-text:; mso-level-tab-stop:1.0in; mso-level-number-position:left; margin-left:1.0in; text-indent:-.5in; font-family:Symbol; mso-fareast-font-family:”Times New Roman”; mso-bidi-font-family:”Times New Roman”;} ol {margin-bottom:0in;} ul {margin-bottom:0in;} –> The Obama Administration and its housing recovery team were taken to task in a recent Congressional hearing. At issue is the $75 billion housing stimulus fund that is designed to help 4 million homeowners avoid foreclosure. At the core of the rescue package is the Treasury’s loan modification program.

In November, the number of troubled homeowners in trial modification programs rose to 697,026 from the 650,994 October level. Amazingly, only 31,382 homeowners have been converted to long-term loan modifications. At the same time, the number of failed trial programs now stands at 30,650.

Failure occur for three primary reasons:

· Failure to sustain timely payments during the trial period

· Failure to submit all necessary paperwork

· Failure to qualify as having insufficient income

These tendencies underscore an alarming fact that homeowners who are underwater are unwilling to continue to pay for properties whose debt surpasses the value. There is a strong tendency to walk away and begin to rent in another area. This drives home prices lower.

Congress is pressuring the Administration to help more homeowners. Phyllis Caldwell of Treasury’s Homeownership Preservation Office explained, “Our focus now is on working with servicers, borrowers and organizations to get as many of those eligible homeowners as possible into permanent modifications.”

The administration has been leaning on lenders to engage troubled homeowners, but the country’s biggest mortgage lenders like Bank of America and Citigroup have chosen to ramp up their foreclosure efforts. Treasury is now launching an all out campaign to intervene. Utilizing forceful oversight of loan services’ modification programs, the government expects modifications to significantly increase in the upcoming months.

Treasury is even sending out advisers to assist borrowers with completing paperwork. The current long-term conversion arte is just 4%. The Treasury would like to see 40% increases in the next tow or three months. If the goal is accomplished, there should be a very positive effect on housing prices.