Alfreda Williams has been on the front lines for a long time, shepherding people through some tough battles.

Williams is a senior foreclosure counselor for HomeFree-USA, one of the many agencies across the country approved by the Department of Housing and Urban Development to help people save their homes if possible. Williams has seen the ugly side of the expensive and predatory mortgages that helped create the housing crash we’ve been trying to recover from for the last several years.

“The hardest thing for me is working with the older clients who have owned their homes for years,” Williams said. “Whoever did their mortgages took advantage of them. And there is no way for many of them to undo what was done to them.”

In response to the housing crisis and the onslaught of foreclosures, the federal government established the Making Home Affordable Program, which includes several strategies to help financially distressed homeowners. Recently, the National Consumer Law Center took a look at one of the largest of those strategies, the Home Affordable Modification Program, or HAMP, which was launched in 2009.

Under HAMP, borrowers can apply to have their monthly mortgage payments lowered so they’re more affordable over the long term. Lenders and mortgage loan servicers don’t have to participate. But to encourage modifications, participating servicers are provided with financial incentives to modify loans to help homeowners avoid foreclosure.

Has the program been a success?

Yes and no, says the law center.

Before HAMP, nearly half of all loan modifications failed, according to a recent report by the center. Now, more than 80 percent of the modifications negotiated under HAMP are still in place a year after they have been made. The modifications have also significantly lowered re-default and foreclosure rates compared with modifications made outside the program. Almost 850,000 homeowners have HAMP modifications that are working, according to the report.

“For the people who got modifications, the program was outstandingly successful,” said Diane E. Thompson, an attorney with the law center and one of the co-authors of the report. “Most would not have gotten modification without HAMP, and they would not have gotten the deep and sustainable modifications they needed.”

Although the statistics are good, they’re still not enough when you compare them to the projected number of borrowers the administration thought it could help. HAMP hasn’t come close to reaching the 3 million to 4 million households first estimated.

“When you look at who needed modifications and who didn’t get them or how difficult it was to get a one, the program is a failure,” Thompson said.

The law center concluded that HAMP would be more successful were it not for “massive servicer noncompliance.”

“The assumption is that there are a lot more homeowners who could be helped, and lenders could benefit if they did more modifications,” said Raymond A. Skinner, Maryland’s secretary of housing and community development. “[The Obama administration’s] approach has been to encourage lenders to do it voluntarily. Some people here believe lenders are holding back in the hopes the government will put a lot more money in it, essentially bailing them out again.”

Skinner said many mortgage servicers just didn’t want to do modifications. “And if they don’t do it, nothing happens to them,” he said.

Even so, Skinner said that in Maryland, the program has rescued a lot of homeowners from foreclosure. Maryland had the eighth-highest level of HAMP modifications in the country, according to data through November 2012. Maryland’s success has in part been because of its public awareness programs and a good network of nonprofit housing-counseling groups, Skinner said.

The law center suggests that to reach more homeowners, the program should standardize the evaluations used to determine whether a mortgage can be modified, ensure that modifications are truly affordable, require more transparency in the process and force servicers to participate.

“Foreclosures are not going to go away,” Thompson said. “We really need to make this work. We are not talking about giving people something for free. But when it makes economic sense for the borrower, lender or investor to modify a loan, we should.”

Nearly 4 million homeowners have lost their homes because of foreclosure, and up to 10 million homes are at high risk for foreclosure over the next several years, according to the law center. HAMP is scheduled to end Dec. 31.

Williams said she sees a lot of homeowners who are current on their mortgages but are just barely making the payments. They often don’t qualify for a modification because of the terms of the program. And they can’t refinance because they owe more on the house than it’s worth.

“Honestly, we need another two or three years,” Williams said. “I see some light. But I also see a lot of room for improvement in the program. I know we can’t help everybody, but I also know there are a lot of people we can still help.”

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