How Loan Modification Services Provide Foreclosure Relief

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How Loan Modification Services Provide Foreclosure Relief

Author: Ginger Taylor // Category: 1

The huge 75 billion dollar bailout back in February was supposed to provide funding to help provide foreclosure relief for millions of Americans behind on their mortgages. However, the number of people who have actually been helped by the program is dismal. The government hopes to pressure banks into processing more loan modifications for borrowers.

Let’s see, 75 billion dollars is enough to buy 750,000 houses for $100,000 each, so surely at least that many people have been helped with all that money, right? Actually, no. The total number of homeowners who have gotten permanently modified loans as a result of the program is only around 1,700.

There are around 375,000 people who should qualify for the loan modifications but over 60%, or 225,000, of them have not turned in their paperwork or have turned in only part of the paperwork. But are the people who did turn in their forms doing any better? It sure doesn’t look like it.

The paperwork is not the only problem, though. Based on some recent figures only about 1. 7% of the people who have turned in their completed paperwork have been approved to receive modified mortgages. Around 50,000 applicants have not been notified whether they are approved or not, so it appears that about 98,300 have been rejected, compared to the 1,700 who were accepted. That seems a little unbalanced.

The government is sending SWAT teams from the Treasury Department to visit lenders next week in an effort to get them to cooperate with the loan modification program. The plan is to embarrass the banks that are not doing their part by publishing a list of the companies for the American public to see. Somehow I don’t see that working.

If you are planning on taking advantage of Obama’s loan modification program to save your home, you should consider consulting a loan modification attorney.