Loan modification program offered to just 15% of eligible borrowers
According to the first monthly progress report on the performance of the loan modification program introduced by the Obama administration, only 15% of the borrowers eligible to participate in the program have been offered loan modification so far. Among the 38 firms that are participating in the program, several loan servicing companies including American Home Mortgage Servicing and PNC Financial Services Group Inc. have not modified a single loan. The best performer among large firms is Saxon Mortgage Services Inc., which has implemented trial loan modifications to 25% of its eligible borrowers. Mortgage firms have been criticized for not doing enough to expedite the program.
The government's initial target was to assist up to 4 million distressed homeowners. However, just about 200,000 homeowners have received loan modifications so far. According to RealtyTrac, 1.5 million households have received at least 1 foreclosure notice in the first 6 months of this year. "We want to go faster," said Michael Barr, the Treasury Department's assistant secretary for financial institutions. "There are a bunch of servicers that are lacking in performance. They have to lift their game." Some analysts say that modification procedures take time given the complexity involved. "A lot of these modifications are very hard to do, it takes time and you can't rush it," said Paul Miller, a bank analyst for FBR Capital Markets.
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