Few Get Loan Modification

Very few homeowners have been able to get loan modification. The Orange County Register this morning had an article stating Mortgage relief reaches few homeowners. Just over 31,000 that is just a few homewoners received permanent loan modifications since March under the Obama administration's mortgage relief plan.

Among the big lenders, who received TARP monies, Bank of America had the worst record. The nations largest lender had only completed 98 modifications for the 160,000 borrowers who had signed up by the end of November.

The weak results mean Obama admisistration is not going to hit its long term target of helping 3 million borrowers with loan modifications. 31,000 comparied to 3,000,000 is less than one tenth of what Obama thought was possible. I guess that we could say that only a few get loan modifications.

The more borrowers the program can't reach, the more foreclosed homes or short sales that will spill onto the market. Which pulls down the real estate market. The Treasury Department will step up its pressure on the banks to do something with the loan modification situation.

The article went on to say that the administration's focus is to "get as many of those eligible homeowners as posible into permanent modifications," said Phyllis Caldwell, chief of Treasury's homeownership preservation office. Could we do worse than having a focus and a department who fails this badly. How could you do worse?

When the poor progress was clear last summer, the Treasury Department set a goal of enrolling up to 500,000 borrowers by November 1, 2009.

Under the program, eligible borrowers who are behind or at risk of default can have their mortgage interest rate reduced to as low as two percent for 5 years.

It is a major failing of the Obama administration that only a few people get a loan modification when they ask for it.

Tim Lorenz

Instant MLS Listings & Free Market Analysis

"We have actually closed many short sales!"

http://www.markandtim.com/

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Tim Lorenz . Over 40 Years Experience Representing South Orange County Home Buyers, Sellers, Investors and Relocations!

Too Many Loan Modification Problems.

The Orange County Register had an article that discused loan modifications. The Attorney General was investigating the loan modification companies and stated so few had gone through he was considering baning them in the State of California. The difficulty he had stated was the fact that consumers paid up front fees and were even given guarantees that if the company was unable to do a loan modification they would give there money back. However, moneys were not returned and this area is ripe for even more fraud and loss to the consumer.




Short sales at least you have an oppertunity to sell the property and move on with your life. The seller will have less of a loss than having the foreclosure on their credit report. The short sale forgiveness of debt is also less than a foreclosure. If you are a seller please always check with your accountant and/or your attorney conserning your own personal tax liability.