09/10/2009 05:12 am ET | Updated May 25, 2011

Making Home Affordable: The Waiting Game

Last week, the US Treasury reported that only 9% of eligible homeowners had been helped by the Obama Administration's Making Home Affordable program. The government-sponsored loan modification program provides incentives for lenders to modify struggling homeowner's mortgages so they can avoid foreclosure -- which is not only devastating for families, but costly to banks.

Five months into the Making Home Affordable program, 235,247 trial modifications are underway. A Treasury press release claims the program is "on pace" to provide assistance to 3-4 million homeowners before the end of 2012.

But since the program was rolled out February 19th, the federal government has twice had to lean on banks to pick up the pace on loan modifications -- on July 9 and again on July 28 -- and this most recent report admits that performance among various banks has been "uneven."

Eleven of the 25 largest participating banks are helping under five percent of Americans headed toward foreclosure. The Bank of America -- recipient of $45 billion in bailout funds -- is helping less than four percent of qualified borrowers.

Some of the shortcomings the report acknowledged -- "quality of borrower experience, such as average borrower wait time for inbound inquiries, completeness and accuracy of information provided applicants, and response time for completed applications" -- are problems we've heard from dozens of HuffPost readers who have written in with their stories.

At this point, the overwhelming backlog means that homeowners who filed paperwork months ago are still being told to wait...and wait, and wait. Sandy Smith from Green Forest, Arkansas has been dealing with the mortgage modification quagmire for nearly five months.

The Treasury figures report that nine percent of qualified borrowers have received trial loan mods, but that nine percent doesn't even include homeowners like Sandy, who have struggled to make ends meet while keeping up with their mortgage payments. The Making Home Affordable program includes a provision for homeowners who are not yet delinquent in their payments but are in "imminent default" -- are on the brink of falling behind -- but the figures provided by the Treasury show loan servicer success rates as percentages of borrowers who are at least 60 days delinquent on their loans.

Sandy bought a $130,000 house in 2002 and received a fixed-rate mortgage with $20,000 down. But recently, with the cost of living up in addition to several unexpected expenses, Sandy found it was becoming more and more difficult to stretch her monthly retirement check to cover her mortgage payments.

In April, she called the customer service number on her mortgage bill and asked if she could refinance to lower monthly payments. She explained that she was looking for information about refinancing but didn't want to do anything to hurt her credit rating:

I was told that a refinance would result in the same or higher monthly payments. I then called my insurance company -- which also provides loans -- and got the same response.

I then thought maybe I should check Fannie Mae or Freddie Mac to see if there was anything there that could help. When I went to Fannie Mae website, I found a short questionnaire to be filled out to see if I qualified for assistance. The answer was that I qualified for the Affordable Home program.

Sandy faxed in the forms and information for the Home Affordable program on April 27:

On May 15, I finally reached a human at the end of the telephone tree. I spoke to Norma who then transferred me to Barbara. Barbara, in turn, transferred to Pat who then passed me on to Douglas. At which point I was told they have had a lot of applications and was given a number to call back next week. I called the number given on May 18 and again encountered a phone tree. I finally arrived at the extension of Mr. Morgan who told me to be patient, they have received a lot of inquiries, and they would get back to me.

June 4, I called and talked to Pat who said it would take two to two and half weeks to hear anything. He said was it was taking 60-90 days to process applications.

On June 23, I talked to Thomas who transferred me to Natasha who said it was taking 30 to 45 business days to process applications.

On June 30, I reached Chuck who transferred me to Tiffany who transferred me to Nadine, who transferred me to Jackie. Jackie said I needed to fax my homeowner's insurance declaration, current insurance bill, current bank statements (the previous ones were out of date), and a copy of my divorce decree which showed I was entitled to receive half of a military retirement, and my last year's tax return. I faxed the information the same day.

I called on July 11 to see if they had received the papers and what my status was. Cassandra said they received the updated information and it would take a few more weeks.

On July 27, I figured we had reached 90 days, so I called again. Coralinda transferred me to Jolene who said that I needed to resubmit the form I sent on April 27 which gave permission for them to receive my past three years tax returns. Apparently the form is only good for 90 days so they need a new one. There are also new forms included in the application packet which I need to fill out. She suggested that, while I was at it, I might as well include new current banks statements and utility bill as the previously submitted ones would also expire.

When I opened my mail late in the day on the 27th, I found the following from Chase dated July 6:

Thank you for your recent request for a loan modification on your mortgage account (indicated above). We are sending this letter to let you know that we are actively reviewing your request and will be following up within thirty (30) days of the date of this letter.

Please keep in mind that your modification request, like all loan workout options, requires full underwriting review and approval. If your modification is approved, we will send you a formal agreement to sigh.

At Chase, our goal is to provide thorough and accurate service for every customer. We greatly appreciate your patience as we complete the review process. We value you as a customer and look forward to helping your with your financial needs.

Sandy faxed the documents for the third time on August 3. In a follow-up call a few days later, another representative told her they had received the paperwork, and it would be processed within the 90-120 days.

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