Hope for Homeowners program criticized

WASHINGTON, Dec. 17 (UPI) -- A federal program designed to help 400,000 struggling U.S. homeowners has attracted only 312 applicants since October, a government agency said.

Secretary of Housing and Urban Development Steve Preston panned the Hope for Homeowners program as "tough to use," The Washington Post reported Wednesday.

Preston blamed Congress for creating a program with too many hurdles for homeowners, the Post said.

Rep. Barney Frank, D-Mass., who helped create the program, blamed the Bush administration, which, he said, "kept putting pressure on us to make it cheaper and more restrictive."

The program was set up to insure loans up to 90 percent of the home's value.

Lenders balked and Congress recently pushed the insured amount to 96.5 percent, but "getting lenders to agree … has been our biggest challenge," said Peyton Herbert, director of foreclosure services at HomeFree USA. "They want dollar-for-dollar what's owed on that loan or something close to it," he said.

Other hurdles included having homeowners provide two years of financial records and split any profits with the government when the house is sold.

"This falls into the category of 'We want your first- born'," said John Taylor, chief executive of the National Community Reinvestment Coalition.