Contact | Login|Register

Call Us: 949.874.7020

• Home
• Open Houses
• Search Properties
• Buyers Resources
• Sellers Resources
• Financing
• About

Permanent Loan Modifications Doubled

After putting more pressure on lenders to step up loan modification efforts, the Obama administration announced last week that the Home Affordable Modification Program is finally seeing tangible results, with the number of permanent loan modification more than doubling in the past month.

Reports from the U.S. Treasury Department revealed that 66,465 loan modifications had been made permanent as of December 30, more than twice the number reported in the past month. Another 46,056 trial loan modifications were also started in the same period, with only the homeowners' signatures needed to make them permanent.

The much-criticized program has been off to a slow start since its launch in February last year, with reasons ranging from lack of staffing and high-volume applications to uncooperative borrowers. It picked up pace after being re-planned in mid-2009, reaching its target 500,000 trial loan modifications by November.

The bulk of newly permanent loan modifications come from California, where 13,353 modifications were made permanent and another 158,935 in the trial phase as of the end of December. Nationwide, there are currently 697,026 trial loan modifications, a rise of roughly 23% since November 2009.

However, critics say the numbers are still below par compared to the 2.8 million foreclosures carried out last year. Even with loan modification and other loss mitigation options on the rise, foreclosure filings nationwide rose by 14% in December, and distressed sales continued to mount in most major cities.

Government officials admit that more work is needed in the next few months to keep up the program's momentum and stem foreclosures. They also said they were putting in extra effort to stay on track with the program's goals, and expect to meet their target of modifying 3 million to 4 million troubled loans by 2012.