Last year, President Barack Obama launched the Home Affordable Modification Program. Allocated a budget of $75 billion, the program is supposed to help three to four million homeowners stay away from foreclosure. Eighteen months after its launch, though, HAMP is being dubbed by analysts and economists as just ‘extend and pretend’.

Despite Department of Housing and Urban Development assistant secretary Raphael Bostic’s statement in a conference call that the housing crisis is slowly showing improvements, current figures show otherwise. More and more homes are being repossessed by banks and lenders. In July alone, 93,000 were taken over by lenders – nine percent more than June’s numbers.

RealtyTrac, a California-based data provider, started tracking home repossessions in 2005. The company has come to find out that July has the second highest monthly repossessions since tracking started. Ever since HAMP was launched, 300% more homes were repossessed.

With HAMP, participants are promised years of monthly payments. This is achieved through cutting down on mortgage interest rates and extending the mortgage life.

Last month, less than 17,000 homeowners were offered to participate temporarily in HAMP and have their monthly mortgage payments reduced. This is 86% less from last year’s HAMP participants. Of these, only 37,000 transitioned from trial plans to permanent mortgage modification.

July’s figures are the lowest since December of 2009 and are down 28% from June’s. The 100,000 that were bounced out of the program last month were bounced because they failed to provide documentation, fell behind the new reduced payments, or kicked out by mistake by mortgage servicers. The last reason is a common thing, says both homeowners and HAMP advocates; even government auditors say so.

As HAMP moves forward, the number of dropped homeowners is increasing. From June, the number increased 7% in July. Since March 1, an average of 108,000 is being kicked out monthly. Almost half of those who enrolled in HAMP since 2009 are now kicked out of the program.

Even with 422,000 homeowners enjoying the median monthly savings of $500 from HAMP, experts say that the program has only added more confusion and hurt to homeowners. As economists pointed out, HAMP does not prevent foreclosures; it only extends the time it takes for a house to be foreclosed and pretends that all’s well until that time comes. Hence the term “extend and pretend”.

Despite government efforts and HAMP in place, the housing crisis seems to be worsening. Analysts predict that not only will house prices continue dropping in the next four years, but it will also experience zero price appreciation.