Further to the heavy foreclosures of home loans during the recession, Obama administration had launched Home Affordable Modification Program. The program paid cash incentives to mortgage owners to lower payments for people who have defaulted their loans for 60 days or more. This activity was to ease foreclosures.

This modification program had been progressing well and has grown by over 45%. The program initially started off with a temporary modifications but was changed to permanent modifications.

HAMP started pushing banks and other mortgage institutions to make more of their modifications permanent. Since this permanent modification program was pursed aggressively, the other programs which were under trail became slow.

As a result of foreclosures the housing sales had dropped in US of both new homes and already owned houses.