In March of last year, distressed homeowners nationwide were thrilled to hear that our government had come up with a solution for the mortgage crisis. They bottled it up and sold it as a product known as the Making Home Affordable Program. The program expected to help approximately 4 million homeowners with a loan modification; another 4 million would be helped with a refinance.
Homeowners who were having trouble making their mortgage payments were thrilled to hear the news about the program. (And there was quite a lot of news about the program!) Anyone who was considering listing his or her property for sale immediately stopped any plans for sale and all efforts were put into obtaining a modification.
It was at that time that I took out my Magic 8-Ball and gave it a quick shake.
“Magic 8-ball: Do you think that the banks will be able to assist most of these distressed borrowers help with their mortgage problems?”
“Cannot predict now.” The Magic 8-Ball responded.
It has been ten months since the Magic 8-Ball told me that it could not predict the success of the Making Home Affordable Program.
I’m not going to bother asking the 8-Ball for an updated prediction because the Associated Press reported the exact success rate in a news report on January 14, 2010.
According to the Associated Press, “lenders participating in the program have offered trial loan modifications to 760,000 eligible borrowers since it was launched in March . . . As of November, just 31,000 of them had been made permanent.”
What? That is a sorry statistic. Instead of pulling out my Magic 8-Ball, I just pulled out my trusty calculator. I wanted to figure out exactly what percentage of the four million families that were supposed to get help has actually received it.
So, I divided 31,000 (number of successful loan modifications) by 4,000,000 (number of families the program expects to help).
31,000 ÷ 4,000,000 = .00775
.00775! Do you know how small this number is? It has been a long time since I have taken a math class. But, as best as I can recall, .00775 is less than one percent. In plain English, this means that less than one percent of the anticipated borrowers who would obtain a loan modification have actually received one through the Making Home Affordable Program.
Why is that number so small? Maybe we will have to ask the Magic 8-Ball 
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