Having watched my parents work for a year and a half on a home loan modification, I can attest that this article from the HuffingtonPost comes close to understanding why the programs have failed:
"strung along" by banks.
However, I believe HuffingtonPosts's numbers are incredibly low and miss the fact that banks aggressively work to direct people AWAY from the Federal HARP/HAMP programs sometimes by coaxing or even pressuring modification seekers to the bank's own internal programs instead.
These homeowners were supposed to receive lower payments on a trial basis lasting three months and then gain so-called permanent mortgage modifications--lowered payments lasting five years. But more than a year after beginning their trial phase, they have yet to be granted the permanent relief, leaving them unsure about their ability to hang on to their homes. Meanwhile their lenders continue to report them to credit bureaus as delinquent, impairing their ability to borrow in the future.
The new data, disclosed last week in a report from the Congressional Oversight Panel, added the latest sign of trouble to an anti-foreclosure program that was once supposed to help 3 to 4 million hang on to their homes. It is now on track to aid less than one-fourth that number.
What needs to happen is that HARP needs pure Federal involvement in the application process on a modifiers behalf from start to end with monitoring in between, because only the Federal government has any leverage over the banks compared to individuals who have absolutely none.
Otherwise, banks will continue to drop people into an ever growing maze of bureaucracy complete with intimidation and lies.