The Treasury Department’s Principal Alternative Program (PRA) has been in full effect since October of last year. In the 8 months of functioning, the program has sufficiently assisted those enrolled. The number of homeowners enlisted is small, only about 16,000. Of those 16,000 modifications, 3% have been made permanent and although that seems like a small amount those involved in the program have greatly benefited.
On average the principal reduced from each account is close to $70,000 evening out to be about 32% of a borrowers loan amount.
Some of the larger institutions like Freddie Mac and Fannie Mae have yet to participate in the principal reduction plan. Those banks that are participating are allowing homeowners the possibility of keeping their homes and continuing to make payments thus not walking away from their homes and their mortgages.