The Hope Now Alliance, a plan brokered by Treasury Secretary Hank Paulson to get mortgage servicers to freeze introductory ARM rates for a narrowly-defined set of subprime borrowers, was roundly attacked by many borrower advocate groups. Their estimates of how many people it would help ranged from 15,000 to 145,00, and were attacked by the Administration.
Looks like the critics are being proven correct. From the Wall Street Journal in “Earlier Subprime Rescue Falters“:
In the past two months, the 1-888-995-HOPE hotline received roughly 176,000 calls, according to the nonprofit Homeownership Preservation Foundation, which operates the hotline. During that time, hotline counselors recommended a workout for 9,975 borrowers — and told an additional 4,410 people to “seriously consider selling their home,” the group says. Another 12,113 borrowers were referred for in-person counseling and services such as job-placement help.
The beginning of the article says only 36,000 borrowers received counseling. So what happened to the other 140,000?
And no one is promising a big spike up:
Faith Schwartz, executive director of the Hope Now Alliance, a coalition of mortgage companies, investors and credit counselors, said she expects the number of borrowers benefiting from the rate freeze to “inch up.”
If this is all the official shill is willing to promise, I wouldn’t get my hopes up.
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176,000 calls, not necessarily one call per borrower!
The language in the article was that they received 176,000 calls on the hotline. Given the narrow criteria for the Hope Now plan (the reset had to occur in a certain period, the teaser rate had to be at a certain level, your LTV had be over 97%), the more likely cause is that most were screened out on an initial call. Subsequent counseling was likely done via other channels (there are many not-for-profit counseling organizations spread around the US).
Maybe the next bestselling book in this election year will be entitled “The Mendacity of Hope”. :)