Estimations from the the Congressional Budget Office projected that the plan would let 400,000 distressed homeowners exchange risky loans for conventional 30 year, fixed loans with lower interest rate and thus more affordable payments. According to the Federal Housing Administration, the government has received under one hundred applications during the program’s first 2 weeks and only 20,0000, applications are estimated to be submitted by next fall. HUD declared recently that it has finished revising the good faith estimate of mortgage costs, which includes lender compensation to mortgage brokers. The government states that in 2010, these new forms will be mandatory and should save homeowners around $700 in closing costs.

In Washington DC, the head of a congressional committee said that Congress needs to overcome legal obstacles that keep mortgage servicing companies from doing more to help troubled borrowers save their homes from foreclosure.The Chairman of the House Financial Services Committee, Barney Frank , requested legislation to deal with contractual agreements that can obstruct servicing companies from signifigantly changing the provisions of troubled mortgages.

In response to lawmakers’ comments, mortgage backed securities investors and servicers explained that they alter many loans of distreed homeowners, within the legal restrictions they are up against. Tom Deutsch, Deputy Executive Director of the American Securitization Forum told the committe, “Because foreclosure is usually the most costly means of resolving a loan default, it is typically the least-preferred alternative for addressing a defaulted loan”