The White House announced yesterday that it will expand the Home Affordable Modification Program through 2013. The government will increase the incentives for banks to write down the principal mortgage amounts for homeowners who are at risk for losing their homes in foreclosure due to heavy debts. These incentives will also be offered to the government-run Fannie Mae and Freddie Mac.

"While government can't fix the problem on its own, responsible homeowners shouldn't have to sit and wait for the housing market to hit bottom to get some relief," President Obama said during a recent speech.

The Home Affordable Modification Program has been criticized by many homeowners as ineffective and overly complicated. Only about half of the applicants have been able to lower their crushing mortgage payments on a permanent basis and some are skeptical that the new changes to the program will help it achieve its goals.

The program's three year run has been problematic, with many banks claiming that homeowners failed to submit the required documents and with many homeowners claiming that the banks lost their files.

The White House also proposed legislation for a new program called the Home Affordable Refinance Program. This program will hopefully allow more homeowners to refinance their homes to avoid paying high interest rates on underwater homes.

Four major lenders have been criticized for not doing enough to help homeowners stay in their homes. JP Morgan Chase, Bank of America, Wells Fargo, and Ocwen Loan Servicing were all cited as failing to negotiate with homeowners in a fair manner and saw government mortgage modification incentives withheld in some cases.

Source: Associated Press, "Obama administration to extend and expand foreclosure relief programObama administration to extend and expand foreclosure relief program," Jan. 27, 2012