According to first report by Obama administration, the firms implementing $75 billion mortgage modification program have shown a slow and uneven performance.
It has been confirmed by the Obama administration’s first progress report on its foreclosure prevention plan that it is off to a slow start.
As said by the treasury department on Tuesday, so far, just 9% of delinquent borrowers are in trial modifications. This has translated into 235,247 loans that have been at least two months delinquent.
At the start of the program it has been said by the Obama administration it is on pace to help up to four million homeowners over the next three years. This plan has been announced in February and the first institutions that had joined it started accepting applications in April.
Tuesday’s report has came after a week of the administration called servicers to Washington, D.C., in order to discuss increase the program’s implementation after hearing thousands of complaints from borrowers. Officials want that there should be 500,000 loan modifications under way by Nov. 1.
The administration is hoping that by releasing the servicers’ progress reports, it will hold institutions responsible for their performance. By these monthly reports the public can see that which institutions are moving slowly in implementing the plan.
Modification offers by institutions has been extended to 406,542 troubled borrowers, or 15% of those behind in payments.
A very uneven performance has been shown by the 38 servicers that are participating in the program. Saxon Mortgage Services, which is a subsidiary of Morgan Stanley, is leading all, it has put 25% of its delinquent loans into trial modifications, followed by Aurora Loan Services, which is a subsidiary of Lehman Brothers Bank, with 21%.
GMAC Mortgage, put 20% of its delinquent loans into trial modifications. This company is partly owned by the federal government.
Among the major banks, JPMorgan Chase is leading with 20% of late loans in trial modifications, followed by Citigroup with 15%. Wells Fargo and Bank of America have moved slowly with 6% and 5%, respectively.
It has been acknowledged by the servicers that they need to improve their performance, it has been said by them that they were committed to the president’s foreclosure prevention plan. It has also been stressed by them that they were doing many modifications outside of the administration’s initiative.
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Posted by R. Mak in Mortgage, Mortgage News, Mortgage Refinance, Real Estate · 0 Comment
