Home Modification Program Introduction

The American Bankruptcy Institute reported that the number of Fannie Mae and Freddie Mac related modifications is only 25% to 33% of what was expected or hoped by the Obama Administration.

OBAMA LOAN MODIFICATION PROGRAM MOVING SLOWLY

The Treasury Department yesterday said that nearly 910,000 troubled borrowers on the verge of foreclosure have had their mortgages permanently modified to lower payments as part of a White House program -- far short of the original goal, MarketWatch.com reported yesterday. That number is up from roughly 880,000 permanent modifications as of October, according to the Treasury's November report. The Treasury also noted that as of November 30, banks have reduced the principal amount owed by about 36,000 borrowers. These are borrowers with mortgages that are not owned or guaranteed by Fannie Mae and Freddie Mac; the two government-seized mortgage giants are not participating in a government principal-reduction program. According to the Treasury, the median amount of principal reduced is about $66,000 - or 31 percent of a homeowner's previous unpaid principal balance. The three largest servicers, Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. account for 71 percent of the principal modifications so far. The number of permanent modifications is still far short of the 3 to 4 million foreclosures that the White House aimed to stop when it unveiled the program in February 2009. Read more.