By Vicki Needham - 03/02/11 08:05 PM EST
“While we cannot stop every foreclosure, we know that many responsible homeowners are still fighting to make ends meet," said HUD Assistant Secretary Raphael Bostic. "Through the broad range of programs this administration has put in place, we can put help in reach to those homeowners as early as possible."
Foreclosures are supposed to increase by 20 percent this year over 2010 with prices expected to bottom out, according to an analysis by RealtyTrac, a group that follows trends in the market.
Several of the nation's largest lenders halted foreclosure proceedings last fall after questions over whether they had examined and included all of the necessary paperwork.
Delaying the foreclosure process, which is still under investigation by all 50 state attorneys general, created a short-term decline in repossessions that will likely pick up pace as lenders resubmit paperwork.
In the scorecard, federal officials pointed out that programs such as the Home Affordable Modification Program (HAMP), which has been criticized for its inability to reach enough homeowners and stave off foreclosures, are helping.
"Every month, HAMP continues to help tens of thousands of additional families in a cost-effective manner," said acting Assistant Secretary for Financial Stability Tim Massad.
According to the report, more than 4.2 million modification arrangements were started between April 2009 and the end of January 2011, including nearly 1.5 million HAMP trial modification starts.
In addition, there were more than 730,000 Federal Housing Administration loss mitigation and early delinquency interventions and more than 2 million proprietary modifications under HOPE Now.
"While some homeowners may have received help from more than one program, the number of agreements offered was more than double the number of foreclosure completions for the same period, 1.8 million," the report showed.
The report also found that since April 2009, record-low mortgage rates have helped more than 9.5 million homeowners to refinance, resulting in $18.1 billion in total borrower savings.
The administration recently announced short-term steps to reduce the government's support of the housing market, including the eventual winding down of Fannie Mae and Freddie Mac, aiming to get banks lending again.
As foreclosures weigh heavily on the housing market's recovery, some housing groups have expressed concern about lawmakers' intentions to cut housing programs.
John Taylor, president chief executive of the National Community Reinvestment Coalition (NCRC), said Wednesday that a plan by the House Financial Services Committee to look at cutting those programs would put the burden on Americans.
"The foreclosure crisis is dragging down property values nationwide, and with it, tax bases and local revenues," he said. "The real loser if the federal government does not step up its efforts to make the servicers and the banks prevent foreclosures will be the American people and state governments that will be left to pick up the pieces."
"Only twisted thinking concludes that leaving people to fend for themselves when they are kicked out of their homes is the correct solution to our economic woes," he said.
"Given the fragile state of our economy, we need proposals that solve the problem, not ignore it; if we don’t, I fear we’ll be having this same debate years from now."