FreeDIYkits Loan Modification Blog

Officials from the Treasury department met with lenders yesterday in yet another attempt to get them to step up the pace of loan modifications. As of the end of September, 14% of all home owners with mortgages are either behind in their loan payments or in some phase of the foreclosure process. This is a record level of mortgage delinquencies, for the ninth straight quarter.

The Obama Administration is gearing up to play hardball with mortgage companies that only temporarily lower struggling homeowners’ monthly payments. But as the drive to make more loan modifications permanent kicks off, there’s a weightier question to ask: Can the government’s $50 billion foreclosure-prevention initiative deal with the crisis as it now exists?

Many homeowners were excited to find out about the making home affordable home loan modification program back in February and March. The idea the program was to allow homeowners to lower their monthly mortgage payment to less than 31% of their household monthly income. Unfortunately, this process takes a great amount of paperwork and it is becoming very difficult for lenders and borrowers to understand.

The Obama administration plans to announce on Monday efforts to step up pressure on lenders participating in its massive foreclosure prevention program in a push for transparency that should provide new details about the industry’s performance.