Slow Start to U.S. Plan for Modifying Mortgages

Posted on May 15, 2009. Filed under: Foreclosure Defense, Loan Modification, Mortgage Audit | Tags: , , , , , , , |

The Obama administration’s plan to help millions of troubled homeowners avoid foreclosure by reducing the size of their mortgage payments is just getting off the ground.

Homeowners protested foreclosures in Elmont, N.Y., last month. The federal mortgage modification plan would help those who owe more on their homes than the homes are worth.

So far, two months after the program went into effect, about 55,000 homeowners have been extended loan modification offers, according to a senior administration official. At the same time, foreclosures continue apace. RealtyTrac reported Wednesday that foreclosure filings reached 342,000 last month, up 32 percent from April 2008. Moody’s has estimated that more than 2.1 million homeowners will lose their homes this year.

Because of the size and complexity of the modification program, the administration has only recently assembled most of the pieces. In late April, officials fleshed out their plan to modify or forgive second mortgages — one of the big stumbling blocks in modifying primary mortgages — and provided more details on the Hope for Homeowners program, for borrowers who owe more than their homes are worth. Congress is close to acting on legislation to protect mortgage servicers from potential lawsuits from investors, while also expanding the Federal Housing Administration’s ability to modify loans.

The banks, too, are just now beginning to get their mortgage modification machines up and running.

via Slow Start to U.S. Plan for Modifying Mortgages – NYTimes.com.

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