After 10 months, how is the effort to modify loans going?
President Obama promised that nearly 4 million homeowners would be helped through modification, but the initial efforts went slowly as lenders moved slowly. In July, the President and his staff called lender representatives to Washington and told them to pick up the pace. The most recent report released December 10 indicated that the program is not only on target but ahead of schedule in terms of people who are at some point in the process.
- 728,000 modifications have been made – 25,318 of them in the Washington, DC metro area
- Borrowers with modified loans are saving an average of $550 per month
- Only 31,382 borrowers have moved from the trial phase of the program to the permanent phase
- So far, most borrowers are keeping up with their payments
The Administration met with lenders and loans servicers in Washington this week to ascertain if they are doing all they can to make the trial conversions permanent. Meanwhile, the push is on for people in their trial period to sign the paperwork to make the modification permanent.
As noted by Chief of Treasury’s Homeownership Preservation Office (HPO) Phyllis Caldwell, the report proves that “struggling homeowners across the country continue to receive immediate relief in the form of reduced monthly payments and a second chance to stay in their homes.”
These facts contradict a study by a watchdog group that came out the same day as the government report. The study claims only 10,000 permanent modifications have been completed and echoes Treasury department fears that 40% of people with modified home loans will re-default within 5 years.
For many homeowners, loan modification is a solution that can work long term if the reduction is substantial enough and if the other expenses associated with the home fit within the budget. For others, who have a home too pricey for them, other debt, or a faltering job, the process may only prolong the agony before they either lose the home or make the decision to move on.
If you are debating whether you should modify your loan or go another route, Express Homebuyers offers an alternative. We will buy your home for cash and guarantee completion of the process within a couple weeks. We tell you up front what we will pay; if you agree, you are on the way to a quick resolution. We even offer you a $2,500 upfront advance so you can plan your fresh start. Call us at (877) 804-5252 or check out our Express Homebuyers website for more details.