Mortgage Modifications Still Face Struggles in Struggling Economy

Mortgage modifications are something both the Obama administration and banks are providing for delinquent home owners in an attempt to help the economy. But as much as banks and the Home Affordable Mortgage Program launched by President Obama are trying to help, still others are weary of how genuine the programs are.

“Sometimes lenders push modifications forward, but often they let them die on the vine,” said David McDonald, a former president of the San Diego chapter of the California Mortgage Brokers Association, SignOnSanDiego.com reported.

McDonald added that loan-servicing agencies “tend to make more money the more delinquent a loan gets, so there’s not much motivation for them to help borrowers,” the report said.

The $75 billion HAMP have qualified just a mere percentage of the 1.5 million people who applied. The report added that 246,000 did not make it into the trial program, while 617,000 were canceled from the trials before getting permanent modifications.

According to CNNMoney.com, banks are doing nearly twice as many mortgage modifications under their own foreclosure prevention programs than under President Obama’s HAMP.

But that’s still no reason to celebrate, as many mortgage modification offers may not be as good as HAMP, CNN reported.

“We don’t know if they are sustainable based on the monthly payment,” said John Snyder, manager of foreclosure prevention programs at NeighborWorks America, the report said. Since banks don’t release a lot of information about their modifications in the first place, Snyder says “we’re not sure what to think.”

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Mortgage Modifications Still Face Struggles in Struggling Economy