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California Homeowners Can Stop Foreclosure with Loan Modifications, Forensic Loan Audits and Negotiated Mortgage Loan Modification Terms.
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17 May 10 Home Affordable Modification Plans Failing?

According to CNN Money there are 637,353 distressed homeowners that remain in a trial loan modification agreement. The rate at which of borrowers entering the Home Affordable Modification Program HAMP has slowed as servicers have begun to implement new requirements to gather income documentation at the beginning of the mortgage relief process.

Is HAMP helping second mortgage lenders? New home loan modification statistics released by Treasury provide additional insight into just how well servicers are doing in converting trial mortgage modifications to permanent status. The six servicers who verified borrowers’ income before placing them in trials have transferred more than half to long-term adjustments, with HomEq Servicing and Ocwen Financial Corp leading the way with 83% converted. Those lending companies using stated income or no limited documentation approach, however, have yet to hit the halfway mark.

According to the State Department, the California loan modification program has not had much success either because borrowers still can’t afford their mortgage loan, even after the lender modifies the loan to a reduced monthly payment. The largest mortgage loan servicers are behind most of the top lending banks like, with Bank of America 25%, Wells Fargo at 25%, JPMorgan Chase at 22% and Citigroup at 21%. Homeowners also languished in trial loan modifications at certain servicers. Some 76% of those in the trial phase at Saxon Mortgage Services and 72% at JPMorgan Chase have remained at that stage for at least six months. Servicers, who met with Treasury and Housing Department officials last week, told the administration they would clear the bottle-necked process by the end of June.

According to industry insiders, major changes to the federal loan modification program are coming soon in the wake of criticism that the Obama administration must offer federal mortgage relief to struggling borrowers. Starting June 1st, homeowners will have to provide all their income verification documents before they are put into trial modifications. This will make it harder for troubled homeowners to start the process, but it should make it easier for them to qualify for permanent assistance. Refinance loans have been difficult for most homeowners to qualify for because of depleted equity and slumping credit scores, so the loan modification has become an important part of the foreclosure prevention equation.

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