Back in the fall, the Bush Administration announced the formation of the Hope Now alliance. The idea was to encourage mortgage lenders to enact a mortgage rate freeze and then re-do mortgage loan terms for subprime borrowers in danger of foreclosure. However, a few months later, the New York Times reports, there is doubt as to how helpful Hope Now actually is:

Even Hope Now says it is unsure how effective it is. The group does not break out the number of loan workouts that occur as a result of its efforts and those that might have happened anyway. Some people who work with Hope Now say it has done little to keep the housing crisis from deepening.

“Hope Now is a failure,” said Michael Shea, the executive director of the Acorn Housing Corporation, a large counseling agency that is part of the Hope Now alliance. “It’s industry-dominated.”

Others disagree, insisting that Hope Now is providing information to subprime borrowers and using the existing infrastructure to connect those at risk for foreclosure with mortgage lenders who are willing to help them refinance. The organizations itself claims that it has helped over one million so far.

Then next question, of course, deals with Hope Now’s sister program, Project Lifeline. This is meant to expand the number of people who have access to new mortgage loan terms. Is this program facing the same ambiguity that Hope Now does?

And do either of these programs actually help homeowners in the long run. For the most part, the new mortgage loan terms are likely to reflect mainly the needs of the mortgage lenders. The terms just make the loans more payable, ensuring that subprime borrowers can limp along for a few more years without folding.

Another issue is whether or not anyone is learning from the subprime lending crisis. Are mortgage lenders reconsidering those they will give mortgage loans to? Are borrowers reconsidering the types of home mortgage loan they really ought to have?

Or are we just learning the government is prepared to swoop in and “save” us when our bad decisions catch up with us?

Tags: subprime borrowers, Project Lifeline, home mortgage loan, mortgage lenders,
mortgage loan terms, mortgage loan blog, subprime lending

Tags: home mortgage loan, home prices, mortgage interest rates, mortgage lenders, mortgage loan blog, mortgage rates drop, subprime mortgage crash