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Loan Modifications under the HAMP program started slowly, and continued to plod along, now they are still providing completion rates that are unsatisfactory, if you want to word it nicely. Pathetic, would probably be a better description.

However, the Obama Administration has worked hard to put pressure on the banks and servicers that manage home mortgages and have the purse strings on loan modifications. What was the result? The number of temporary loan modifications that have been made permanent doubled to 66,465 and 46,056 three month trial mortgage modifications have been approved and only await the borrower’s signature for completion, according to the Treasury Department.

These completion rates are still low, but as of November 30^th 2009 completed loan modifications stagnated at 31,382 a doubling of loan modifications is an accomplishment that deserves some attention, and why not, some much awaited positive reporting.

What is also encouraging is that areas that were hit the hardest by the drop in home prices, like California, are leading the way in the loan modification revival. California, for instance completed 13,353 permanent modifications in one month and 158,935 await approval.

That is the good news; however it is very early to get too excited. The current number of trial modifications is just under 700,000 which compared with 66,465 completed loan modifications illustrates the amount of work that is still required to make a dent in the mortgage crisis.

Just last year there were 2.8 million foreclosures, and the number of foreclosures in December rose by 14% which shows how the modest progress we are reporting is really a proverbial drop in the ocean.

The administration understand too well the complaints the public are making against the HAMP program and no doubt share some of the frustration of troubled borrowers, amazingly they remain optimistic and claim they are on track to meeting the goal of 3 to 4 million modifications by 2012. Apparently 2012 will not only be the end of a Mayan calendar cycle but also a turn in the American mortgage industry cycle also.

To be fair, there are other indicators that allow for some optimism. According to the Treasury Department one in four troubled homeowners had received a permanent or trial loan modification. Also, big banks like JPMorgan, Chase & Co. and Citigroup which previously had lagged behind in modifications are leading the way with loan modification rates of over 33%. On the negative side, Bank of America, the biggest playing in the park, dragged their corporate feet with a 19% permanent modification rate.  But even this negative rate comes sugar coated as Bank of America started 34,000 new trial loan modifications in December 2009.

Related posts:

1. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
2. U.S Loan Modifications Hit Obama’s target Early But Nobody’s Impressed
3. Loan Modification Administration Hawks Bring Out the Big Guns

Related posts:

1. Loan Modifications Latest Figures, Limbo, Trial Purgatory And Other Horror Stories
2. U.S Loan Modifications Hit Obama’s target Early But Nobody’s Impressed
3. Loan Modification Administration Hawks Bring Out the Big Guns

The sad reality is that an estimated 4 million households will lose their home to a foreclosure this year. Of course most of them will not go without a fight and will try to reduce their monthly payments with a loan modification.

Unfortunately loan modifications are not easy to come by and only a small percentage of troubled borrowers get a loan modification trial and an even smaller percentage get a permanent loan mod. This has created a practically brand new industry overnight, loan modification companies or consultants. This industry is not regulated allowing practically anybody to hang up a sign and start “working” as a loan modification consultant. This has caused many loan modification scams to crop up. This article aims at helping you avoid the scams and take the right steps to maximize your chances of loan modification success.

Step 1.

Contact your Bank or Lender first as soon as you realize you are going to struggle to make mortgage payments. It is always better to start planning for the worse before you are delinquent on your mortgage. You will need to contact your bank’s or lender’s loss mitigation department and explain your situation.

Step 2.

Be patient. Loan modifications take time and are difficult to get because a) they require plenty of paperwork and b) banks are not overjoyed with the prospect of losing money. However pressure is mounting on banks to stop dragging their feet and some lenders are increasing their loan modification completion rates substantially.

Step 3.

Contact HOPE’s hotline at 1-888-895-HOPE you will receive free help from trained counselors in multiple languages 24 hours a day. Although loan modification companies will tell you that these counselors are not good and that you need to pay to get a good service that has your interest at heart I recommend you give them a try. They are getting paid (obviously) just by the government instead of you.

You should also contact your local HUD approved counseling agency. You can find out where your closest office is by asking at the same hotline number detailed above. It is a good idea to visit a couple of counseling agencies and comparing the counsel they provide. The truth is that loan modifications are not THAT complicated, once you understand the basics and get down to the messy paperwork most people get ahead just fine. Getting approved, well that is just another thing altogether.

Step 4

Beware of loan modification scams. Here are some signals that give them away:

1)      Avoid ANYBODY (lawyers, companies or consultants) that asks for a prior fee for ANY loan modification service. Besides being a bad idea for obvious reasons it is illegal in many states.

2)      Avoid companies, lawyers or consultants that GUARANTEE your loan modification will be accepted or that they can stop a foreclosure. At best this is wishful thinking of a naïve consultant, most likely there are lies, in any case avoid like the plague.

3)      Avoid companies that tell you to stop making payments on your mortgage and pay them instead, this is the litmus test of fraudulent loan modification agencies.

Step 5

If you see evidence of a loan modification scam, or of bad practice with a loan modification company, do us all a favor and report them to 1-888-995-HOPE (4673). Loan modification scams are spreading fast but the Government is working hard to put them out of business. Many District Attorneys’ are making it their mission to put these companies out of business.

Related posts:

1. Avoid Foreclosure: 7 steps to save your home.
2. Loan Modification Company Scams How to Avoid Them
3. Avoid Foreclosure With A Personalized Home Loan Modification

Related posts:

1. Avoid Foreclosure: 7 steps to save your home.
2. Loan Modification Company Scams How to Avoid Them
3. Avoid Foreclosure With A Personalized Home Loan Modification

It is no secret that the Obama administration has a lot vested in the success of the Loan Modification Program, also called the Home Affordable Modification Program (H.A.M.P). In order to help the program along the government has provided a long list of incentives, bonuses and other methods in order to encourage lenders and banks to do their part in making the program work.

First it was financial incentives in the form of cash payments for every completed loan modification of up to $4,000 over three years. This didn’t have the result they hoped for so the administration started naming and shaming tactics where underperforming banks or lenders were published on a list of the worst loan modifiers in the industry while the better performing banks were prized with kudos and positive publicity for “helping troubled homeowners”.

Recently the government has also added to the prize generous capital risk-weightings for banks that perform well with their loan modification application to completion rates.

Those tactics didn’t really lift the program off the floor, of the 750,000 applicants that have entered the loan modification program three month trial only 31,000 have to date actually received a permanent modification to their loan.

This is why the administration started to show its meaner side. Banks and lenders that did not support the cause have been threatened with fines, increased government scrutiny and recently even lawsuits.

Blown Mortgage readers will remember the lawsuit Ohio Attorney General Richard Cordray filed against New York based Barclays Capital Real Estate, doing business as HomeEq Servicing.

The lawsuit details that HomeEq / Barclays has been accused of issuing unfair loan modification agreements and providing inadequate and incompetent customer service to Ohioans who were at risk to losing their homes to foreclosures. HomeEq is accused of forcing troubled homeowners to sign one sided agreements that were unfair and deceptive. Homeowners were required, for instance, to realease HomeEq of all liabilities (which you can’t really do), pay extra fees (not supposed to that either) and waive their own right to defense (not a very popular measure with the Attorney General).

In addition to this Barclays was accused of breaking Ohio’s Consumer Sales Practices Act (CSPA) through their unsatisfactory customer service by not returning calls or responding to enquiries.

The question is this the real reason Ohio Attorney General is suing Barclays. I would say no. If you read carefully the statement of Mr. Cordray it is clear that the main complaint is “unfair” and “indadequate” customer service with loan modifications. Cordray is further reported to say:

There has been ample time for loan servicers to strengthen their efforts and start making a significant difference in preventing home foreclosures,” Cordray said. “Unfortunately, many servicers have instead repeatedly chosen to aggravate the crisis through noncompliance and excuses. As I see it, for every excuse, hundreds of families become more vulnerable to losing their homes. In Ohio, we have zero tolerance for any more excuses.”

If you check the latest servicers loan modification performance lists you will quickly see that HomeEq was way down there with 657 trial loan modifications and zero completed permanent loan modifications.

It doesn’t take a leap of imagination to see that the Obama administration has decided to start suing underperforming servicers and has started with a British company that has recently entered the industry. Targeting a foreign company could be seen as a warning shot to big banks like JP Morgan and Wells Fargo that have a measly conversion rate of 3 to 4 percent on their loan modifications.

Related posts:

1. Rogue Loan Modification Servicers, What Are The Signs?
2. Loan Modification Low Numbers, Why?
3. Loan Modification Success Report, The Truth Is Far Worse

Related posts:

1. Rogue Loan Modification Servicers, What Are The Signs?
2. Loan Modification Low Numbers, Why?
3. Loan Modification Success Report, The Truth Is Far Worse