Loan Modifications

CNN Money accounced this past week, Obama's mortgage relief (loan modifications) are off to a very slow start. Just 9% of delinquent borrowers in trial modifications so far.

There are four million homeowners in line waiting for loans to be reviewed for loan modification, which should reviewed within the next three years. Financial institutions began accepting applications April 2009.

Due to the slow start, the program has had a flood of complaints from borrowers. The administration has ramped up discussions to see 500,00 loan modifications under way by November 1st.

Financial instituions have extended modification offers to over 400,000 borrowers or 15% of those behind in payments. The bulk of trial modifications have been done by a handful of servicers.

Performance was very uneven amoung the 38 servicers participating in this program. Saxon Mortgage Services, a subsidiary of Morgan Stanley let the pack, putting 25% of its delinquent loans into trial modifications, followed by aurora Loan Services with 21%.

MGAC Mortgage which is partly owned by the federal government, put 20% of its delinquent loans into trial modifications.

The major banks - JPMorgan Chase came in first with 20% of late loans, followed by Citigroup - 15%, Wells Fargo and Bank of America lagged with 6% and 5% respectively.

Servicers have been contacted, and they acknowledge they need to improve their performance, saying they were committed to the President's foreclosure prevention plan.

Wells Fargo said it will eliminate its backlog within weeks, stating their began modifying loans owned by private investors end of June, and those owned by Fannie Mae and Freddie Mac in April.

Joan Cox
Metro Brokers - Turning Point RE
720-231-6373
www.JoanCox.com
Joan@JoanCox.com