It seems like the Obama administration is failing on its promise of putting a full stoppage on the home foreclosures. It has only delayed the process of foreclosures – this may work for the housing market but it definitely spells trouble for the homeowners.

True to its promise of working on the rampant incidents of home foreclosures all over the country, the administration launched the Making Home Affordable campaign in February 2009 at Dobson High School in Mesa, Arizona. With the signature program HAMP or Home Affordable Modification Program, the campaign should be able to help out around three to four million homeowners.

HAMP, with a budget of $75 billion, works – or is supposed to work – by encouraging investors, servicers, and lenders to grant homeowners a series of cash incentives so that mortgages can somehow be modified. The strategy, however, is not working. In its first run, HAMP kicked out 40 percent of the 1.5 million people who were invited to try out the program.

Before President Barrack Obama came into office, foreclosures took 319 days to complete, says Lender Processing Services of Jacksonville, Florida. Now, with his Home Affordable Modification Program, 461 days are counted off before a house closes down. Though investors, servicers, and lenders benefit from the process, homeowners are left standing on their toes, hoping the next day won’t mean that they will be kicked out of their house.

And it seems that more and more families are standing on their toes these days: a total of 191,000 homes have been repossessed by the banks in the first three months of Obama’s term in the office. After those three months and until June 2010, the number has almost doubled at a 42% increase.

Even with HAMP in place, the alarming increase in bank-owned homes can be attributed to the fact that only a few trial cases transition to permanency. Ideally, a trial should become permanent after three months. Only a sparse number of families are granted this.

An incentive payment of $1,000 is given to servicers and investors for permanent mortgage modifications. According to the Office of the Special Inspector General for the Troubled Asset Relief Program, they have only released $247million for this purpose. They go on to say that HAMP’s effect is “anemic”.

Analysts are pointing out that, of the original target, only 10% of homeowners may be saved by HAMP. They further predict that 75% of those enrolled may even retract their enrollment in the program.

HAMP made good promises but it needs to be coupled with mandatory principal reduction, say analysts from Moody’s Investors Service. True, such act may lead to moral hazards – but even SIGTARP admits that HAMP may fail miserably if banks are not pushed to do write-downs. A more stringent review of homeowners’ qualifications can be put into place to ensure that HAMP with mandatory principal reduction will work.

The numbers of prevented foreclosures may seem dismal and analysts – and homeowners – are losing hope. But there is still something the Obama administration can do to prevent one of its pet projects from totally going under water. Hopefully, they get to act on it soon, not only for the housing market’s sake, but for the sake of the homeowners as well.