In March of 2009 the Obama Administration announced an aggressive program to help people save their homes from foreclosure by getting their mortgage companies to modify their loans. This is The Making Home Affordable Modification Program. Much has been written since about how the program can help people save their homes from foreclosure.

When this program was announced the Obama Administration hoped that it would help between 3 and 4 million people save their homes from foreclosure. The original guidelines for the Making Home Affordable Modification program did not indicate how the results of the program were going to be measured.

In early July of 2009 Timothy Geithner, the secretary of the Treasury, and Shaun Donovan, the secretary of the Department of Housing and Urban Development, sent a letter to the chief executive officers of each of the mortgage companies participating in the Making Home Affordable Modification Program. In this letter they indicated that they were starting to see a significant amount of loans being worked on.

They added that there was much more work to be done. They saw too much variation in how loans were being handled from one mortgage company to another. The results were inconsistent. They felt that each mortgage company had to increase the number of people they had working on this program as well as the resources they had committed to it. If they did not, the desired results would not be realized.

They announced that they had scheduled a meeting for July 28, 2009. Senior representatives from the Departments of the Treasury and Housing and Urban Development would be at this meeting. They requested that each chief executive officer appoint a senior liaison person to represent them. This person should have regular contact with the chief executive officer and should have the power to make decisions on the chief executive officer's behalf.

They asked that each of these senior liaison people attend the meeting on July 28. In addition they requested that each send a letter to Secretaries Geithner and Donovan by July 23. In these letters they were to outline the steps that their companies were taking to implement the Making Home Affordable Modification Program effectively. If they felt that changes could be made to improve the program they should indicate these in their letters.

Secretaries Geithner and Donovan announced that in conjunction with the meeting on July 28, they were going to take three steps to improve the performance of the Making Home Affordable Modification Program.

In early August they were going to start releasing monthly reports which showed the results of the modifications by each mortgage company. These would show how many trial modifications were extended to eligible people from the start of the program through that month. They also would show the number of final modifications. Eventually these reports would track the success of modifications for each mortgage company.

Second - the Treasury Department and the Department of Housing and Urban Development planned to work with each mortgage company to track how well they were handling the applications for modifications.

Third - the Treasury Department had asked Freddie Mac to audit some of the loan modifications that have been denied. The purpose was to see if the denials were correct or if errors were made. If errors were made then Freddie Mac could make suggestions on how to correct this and prevent the denials from occurring in the future.

Both secretaries emphasized again that the goal of the Making Home Affordable Modification Program was to help as many people as possible save their homes from foreclosure by modifying their loans. They felt that their departments and the mortgage companies could work together to accomplish this.

When the news media read the letter that was sent to the executives of the mortgage companies, they interpreted it as a sign that the Making Home Affordable Modification Program was not as successful as it was expected to be. If it had been, the letter would not have been sent.

However, a closer look at the Making Home Affordable Modification program points to something different. Since it started in March of 2009, there was no way that anyone could start to measure the results until about 3 months later. The program was brand new for all of the mortgage companies. They had to get their staffs up and running to handle it.

It wasn't until early July when monitoring could start to be put in place. Both the Treasury Department and the Department of Housing and Urban Development have been working with the mortgage companies on this.

It is interesting to see that there is a commitment to this program at such a high level in the Obama Administration. Secretaries Geithner and Donovan got involved. They did not delegate this to some junior level executives working for them. They also sent their letter to the Chief Executive Officer of each mortgage company. That was to let them know how serious this was and to have them get involved.

Since the meeting in July, the three steps announced have been put in place.

Reports have been issued on a monthly basis. The first three reports have shown that the performance by the mortgage companies in approving trial modifications has been poor. Every month that a report comes out continuing to show such a poor performance. The more the American public starts to believe that the mortgage companies have no real desire to help people facing foreclosure save their homes.

Mortgage companies have no choice but to improve. You can be sure that behind the scenes the Departments of Treasury and Housing and Urban Development are continuing to get after the mortgage companies to step up and perform better. After their letters and the meeting in July Secretaries Geithner and Donovan have too much to lose not to follow through on this.