Mortgage Foreclosure Law Blog: Making Home Affordable Update I
Hi Readers. The Treasury Department recently released their February report on their Making Home affordable program aimed at stabilizing home prices and fending off foreclosures. Here I would like to go over some of their numbers and give you a feel for what we really see happening compared to those numbers. Then in the next update we will discuss plan changes announced yesterday.
We are being told that there are now over 170,000 permanent modifications under the Making Home Affordable program. Apparently there are another 91,800 permanent modification offers pending as well. Although this is good news and gives me hope that either this program is being taken more seriously by Servicers and Investors or at the least outfits like ours are getting better at identifying and submitting loans that end up qualifying after traversing the minefield of ways these "underwriters" find to disqualify loans. In fact the ways these loan are being disqualified is the hidden problem in the report that is not reported on properly.
Let's take a look at the big problem. So far only 12.6% of all Trial Modifications offered have become permanent. The Stated Goal of the program is to help 3-4 million home owners by 2012 as measured by Trial Modifications offered. If these number hold up the Treasury could claim success by only truly helping 375,000 - 500,000 homeowners. That means they may offer 3-4 million trial plans; but since only 12.6% of these actually become modifications they really have teased and tortured 2.5 -3.6 million homeowners. This is s serious problem and it is the reason this program is currently considered a flop. However there is some good news. the percentages of trial offers to permanent modifications has risen lately. Also, there are significantly more modifications offered through traditional channels and those are often as good or better than Making Home Affordable offers. Finally, as my next update will address, the Treasury has announced new incentives under this program to address some of this shortfall. Until then!
