Obama administration defends rocky housing efforts

Senior officials at Treasury and the Department of Housing and Urban Development (HUD) sought to cast the report in a positive light, arguing there are signs that housing prices have stabilized. Some private forecasters have predicted further price declines.

“There has been a great deal more of price stability in housing markets in terms of prices than we’ve seen before the administration’s initiatives were started,” said Raphael Bostic, a HUD assistant secretary. “We do have to think about this in the broader arc of history. The last thing I said was not to suggest that we are in happylands where everything is rosy and positive.”

Assistant Treasury Secretary Herb Allison said the cancellations are rising because many borrowers entered the program by stating their income and other details first, which would then be reviewed by the industry and government to determine if the borrowers were eligible for permanent loan changes.

“Many of the people did not meet the qualifications,” Allison said, including necessary income levels. He said the industry is continuing to work through the loan applications.