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54 54 homeowners nationwide, not all Americans have had luck with the programs. Launched in 2009, HAMP was touted as a way to help homeowners through a lofty goal of 3 to 4 million modifications. Treasury began back-pedaling from the president's promise and attempted to redefine HAMP's goals by changing the focus to modifying loans for 3 to 4 million homeowners at risk of foreclosure. "e impact of [HAMP] should not be measured solely by the number of borrowers who have received modifications, but also by how the program has helped reduce the number of foreclosures and helped transform the way the mortgage industry views the modification of mortgage loans," said Phyllis Caldwell, former chief of the Treasury's Homeownership Preservation Office in a statement in 2010. Still, the program has yet to reach the original target. In fact, Neil Brofsky described the program's performance as "anemic" in 2010. According to a recent report from the Government Accountability Office (GAO), as of November 2013 only 1.3 million borrowers have entered into permanent modifications. Treasury reported as of February that it has completed nearly 2.2 million trial HAMP modifications and converted 62 percent of those into permanent status. Of those, 375,071 have been disqualified from the program. Despite the program's best efforts, HAMP will not meet its goals by the time the program ends in December 2015, according to the GAO's estimates. Some of the problem has to do with managing homeowners' expectations. Dan Wustruck and Larry Hrdlicka of Milwaukee found success with the program despite initial obstacles. When Hrdlicka lost his job he knew that he and his partner's home of 19 years would be a primary point of worry. eir house had lost a major chunk of its value. When they first bought the home in 1993, its value was $90,000 and they lived comfortably as its value doubled. ey refinanced for $140,000 and then saw the value drop into the mid-$120s. With a mortgage worth more than the home and unemployment fresh, Hrdlicka and Wustrack reached out to their bank within a few days. "I knew right away that we were going to be in trouble," Hrdlicka said. "We were trying to be proactive." e advice the couple got was to let their mortgage go delinquent so they would qualify for HAMP, Hrdlicka says. Mark McArdle, chief of the Homeownership Preservation Office at the Department of Treasury, says he has heard such advice filter through the channels. "at would be bad guidance," McArdle said. "You don't have to be delinquent to qualify for HAMP." A borrower does, however, need to have a hardship, which Hrdlicka and Wustrack had. ey followed their lender's advice and went delinquent for four months. Over that time, Hrdlicka says, they were repeatedly told by their bank that time-sensitive paperwork was not showing up at the bank's offices and that they were unaware that multiple servicing transfers occurred during the course of the process. Fed up, and now six months delinquent, the couple went to a Milwaukee office, only to have to start the process over, Hrdlicka says. en word from a Texas rep: Because Hrdlicka and Wustrack had stopped working with the rep, the home was now subject to foreclosure. e couple was saved by a local home preservation organization called Select Milwaukee, which Hrdlicka only found out about through the lawyer they hired to deal with the impending foreclosure. After nearly eight months of worry, he says, Select Milwaukee got them into HAMP through their lender. By that time Hrdlicka was employed, increasing the couple's profile as viable candidates for the program. Treasury has about 200 pages of rules for lenders to follow, and officially is against such advice as "let it default." e department provides several avenues for distressed homeowners, most notably its Hope Hotline, a 24/7 connection to live help for anyone who feels they're being treated unethically or poorly by their lender. Select Milwaukee is one of 240 organizations connected to NeighborWorks America, which, among other things, helps homeowners find ways to stay in their homes. But, even with the assistance, will homeowners be able to remain in their homes given the impending rate resets, which are scheduled to commence this fall, in the program's fifth year? HAMP's original purpose was to help homeowners overwhelmed by escalating interest rates, particularly those attached to option-ARM loans. Interest rates under HAMP dropped to as low as 2 percent, but under the resets will gradually increase by 1 percent per year until they return to the market rate at the time of the modification. McArdle says more than 90 percent of homeowners will still get an interest rate of 5 percent or lower, considering the market rates were well below 5 percent for much of the program's lifespan. Lenders must also notify borrowers well in advance of impending rate increases and inform them what their new rates will be. Another avenue for homeowners is the Home Affordable Refinance Program (HARP), which allowed homeowners who had seen a decline in their home value to refinance for greatly reduced interest rates. Originally created in 2009, HARP was overhauled to its present incarnation, HARP 2.0, in 2012 after a mediocre public reception. Daniel O'Kavage, a senior loan officer at Mortgage Master Inc. in Princeton, New Jersey, entered two of his properties into the HARP program and largely considers HARP a success. It's not perfect, of course, but he's seen it work "Getting more entry and competition would be beneficial for homeowners by driving down mortgage interest rates. But again, an important culprit in the lack of competition for some borrowers is the uncertain legal and regulatory environment that dissuades entry." –Phillip Swagel, former Treasury secretary to Hank Paulson

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