On November 30th 2009 The Treasury Department announced it intended to increase the pressure put on lenders and services to move those with a trial loam modification to a full blown restructured loan.
Over the past few months the government has been telling tales of success in the trial modification program. However, over 650,000 borrowers entered the program in October and a very small percentage have permanent restructured loans or loan modification. To combat these figures the Treasury Department planned to assign officials to monitor the larger of the mortgage servicing companies on a daily basis. This was an effort to determine exactly what it will require to develop and report plans to increase the completion of loan modifications.
Experts are saying that banks are simply not doing a good enough job when it comes to the modification process. Michael S. Barr was quoted in the Wall Street Journal as saying” Some of the firms ought to be embarrassed and they will be. They’re not getting a penny from the Federal Government until they move forward”. Barr furthers his point by asserting that the government will publicly identify lenders and servicers who are not preforming well under the program guidelines.
Foreclosures are on the rise and are still hitting families who have suffered job losses, medical debt, or other financial issues. Some families are to the point they can not afford payments that have been modified under the program. This leads one to wonder if this is a flaw in the program’s guidelines or the lenders and banks who issue the loans.
Will this program work? No one can say for sure.