HOPE for Homeowners has not been as successful as hoped, and that is putting it lightly. After putting over $300 billion in funding for loans in coordination with the program, it had been estimated that the program could help around 400,000 troubled families. The actual number helped falls drastically short of that. To date, since it´s start date five months ago, the program has helped only one homeowner in preventing foreclosure. Brian Sullivan, a spokesman for the Federal Housing Authority, commented that the program has received over 752 applications, "And only insured one loan. Needless to say, the program isn't working terribly well." Rep. Michael Castle (R-DE), who is on the House Financial Services committee, called HOPE "one of the most failed programs we've had in a long time."

HOPE had originally dealt with getting lenders to volunteer to refinance delinquent mortgages through reduction on the principal loan balance, at about 90% of the current market value of the home. That loan would then be backed by the FHA. The problem is that almost all the key lenders refused to use the program, as lenders do not like losing money and would rather lower interest rates or extend the loan term, to make payments more affordable. Paul Leonard, a spokesman for the Housing Policy Council, a mortgage lender group, correlated this view, stating "Writing down principal is the last thing you want to do because you have to realize the loss immediately,".

Is there any hope for HOPE? The House of Representatives, recently approved an updated version of the program in accordance with the bankruptcy-reform bill that is a big part of President Obama´s Homeowner Affordability and Stabilization Plan. The changes made do not seem to be very substantial and Castle fears that it will be a wasted effort in terms of money and time. In opposition to his fear, is Sen. Chris Dodd (D-CT). Dodd is one of the main designers of the original HOPE program and feels that the added chances will entice more servicers to use the program. One of the added changes would be having the loan reduction go down to only 93% of the home´s value. Servicers could also get a $1,000 bonus to help sway them. Another change with the program is that the prior penalties of the program imposed on borrowers, that upon selling they would have to split the profits with the government, will be removed under the new program if passed.

We will see the outcome when the Senate votes on the bill in these upcoming weeks. Based on the hypothetical changes to be made, the Congressional Budget Office is estimating that the HOPE could over the next 10 years, assist 25,000 struggling home owners, with a cost of $675 million.