WASHINGTON–Ten months after the Obama Administration announced a $75-billion program aimed at keeping up to four-million Americans from being foreclosed upon, lenders have processed more than one-million applications and entered into trial mortgage modifications with 759,000 borrowers. But new data show that just 31,000 of those have been made permanent.
In New York City, for instance, where 20,000 homeowners have faced foreclosure, a study by the Center for NYC Neighborhoods has found that just 3% of those who have asked for assistance have been extended new terms.
Lenders have indicated they are improving the pace of processing the apps. Wells Fargo see it is now doing three loan mods for every one foreclosure. But consumer groups say the pace hasn’t quickened, and even for those who are approved their new loan terms are not any more favorable than their prior loans.
Under the administration program, lenders and other mortgage companies are paid $1,000 for each loan modified, and another $1,000 per year for three more years if the borrower avoids foreclosure. But critics say the same lenders also often generate significant income by charging late fees and other fees.
