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The government set expectations too high earlier this year when President Barack Obama launched an effort to help up 7 to 9 million homeowners avoid foreclosure.

Now, reality is setting in. The effort, named Making Home Affordable, appears on pace to make a far smaller impact on the foreclosure crisis than officials had anticipated.

Meanwhile, foreclosures remain extremely high. More than 358,000 foreclosure-related filings were recorded in August, RealtyTrac Inc. reported Thursday. That number was up 18 percent from a year ago and flat from a month earlier.

Following are a few questions and answers about the status of the foreclosure-relief plan.

How many borrowers have been helped by the government programs so far?

As of last month, more than 360,000 borrowers were enrolled in three-month trial loan modifications, out of about 570,000 who received offers. Only about 85,000 homeowners have had their loans refinanced under the Obama plan.

What’s the difference between a refinanced loan and a modification?

When you refinance your home loan, you sign a new contract with your lender. A loan modification involves changes to the existing contract such as lowering the interest rate or extending the term from 30 years to 40.

Why has progress on loan modifications been so sluggish?

The program requires big changes for the mortgage industry. Modifying thousands of loans is much more complicated than collecting payments from borrowers who pay their bills on time. It means hiring and training thousands of workers to handle calls, and reworking computer systems. Plus, the government has changed and expanded the program several times.

Is the Obama administration planning any big changes?

It’s not clear. But industry executives say they want to work on a possible extension of the program to unemployed homeowners. One way to do so would be to give those borrowers a temporary break on loan payments while they look for a new job.

What should I do if I’m having trouble getting help with my mortgage?

If you can’t resolve your problems or you think your mortgage servicer is violating your rights, contact a nonprofit housing counselor or seek legal help. Housing counselors will help negotiate a loan modification for free. Be wary of loan modification consultants that offer to re-negotiate your mortgage in exchange for an upfront fee.

If you want to know whether you qualify for a loan modification, check out the government’s Web site, www.makinghomeaffordable.gov. To find a housing counselor, try NeighborWorks America’s site at

According to Treasury Department estimates, less than 10 percent of delinquent borrowers eligible for the Obama administration’s foreclosure prevention program have received help so far.

Of the 2.7 million borrowers who have missed at least two mortgage payments, only 235,247 have received loan modifications since the $75 billion program was launched in March. The Obama administration is hoping to more than double the current loan modification tallies by November of 2009.

To be eligible, you have to be 60 days past due in foreclosure or bankruptcy that started before 2009

Under the program, J.P. Morgan Chase has modified 20 percent, or 79,304, of its borrowers who have missed at least two payments. Saxon Mortgage Services, which is owned by Morgan Stanley, has modified 25 percent of its eligible delinquent borrowers. Citigroup has modified 15 percent, or 27,571, of its delinquent borrowers.

But other large banks are lagging. Bank of America has modified 4 percent, or 27,985, of its delinquent borrowers. Wells Fargo has modified 6 percent, or 20,219..

This is the first progress report on the administration’s Making Home Affordable program. Under the initiative, the government is offering subsidies to help lenders offset the cost of lowering mortgage payments for distressed borrowers. The President has recently taken the banks to task and asked for them to step up their processing rate so that 500,000 trial loan modifications are underway by November 1, 2009.

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In all previous recessions, sales of new homes, foreclosure homes and other existing homes fluctuated by roughly the same proportion.

But in this current recession, sales of new homes have fallen far more significantly than sales of foreclosures homes and other existing homes.

The result, according to economists, is that new homes are taking a year or more to sell.

The difference in trend can also be observed in the prices. Across the U.S, prices for existing homes have fallen more steeply than sales prices for new homes.

This price difference, has driven the faster pace of sales of previously owned homes compared to new homes.

Home builders may need to lower their prices even further to be able to compete with low-priced existing homes.

It is the opinion of many economists that the overwhelmingly large numbers of foreclosure homes need to be cut down to a more manageable level before a housing recovery can start and before a nationwide recovery can begin.

If you have the right team in place including your real estate attorney and a Certified Distressed Property Expert certified REALTOR®, this reduces your chances of foreclosure. To really get a good idea of what a CDPE can do for you click on the following link What Is a Certified Distressed Property Expert (CDPE)? To find out all the benefits and options of purchasing a forecloure, contact Eddie Perez, Broker-REALTOR®, CDPE or Anoir Redouane, REALTOR®, CDPE. Their market includes Hoboken, Jersey City, Weehawken and Union City. They can be reached at 201-344-2886 or ateddie@InvestHoboken.com or Prevent Foreclosure.