Modification Program May Need Its Own Modification
According to various reports, over 40% of homeowners receiving assistance from Obama’s program, created to support those facing foreclosure, have officially opted out.
An estimated 530,000 borrowers, as of July, have left the program—this is according to the Treasury Department. Meanwhile, since March of last year, roughly 1.3 million homeowners have joined and signed up for help from the support plan.
On the flip side, 30% enrolled in the program have obtained loan modifications; habitually making timely payments. On an average, monthly mortgage payments are reduced by about $500. However, most who have chosen to exit the program say there was too much red tape involved and hoops to jump through in order to receive a permanent modification.
Mainly, homeowners are ultimately leaving because as the banks signed up borrowers without first asking for proof of income, later, when asked for this information, temporary modification recipients and other borrowers were denied or simply left.
Most homeowners receive temporary modifications and they’re designed to later become permanent once the homeowner makes at least three timely payments and finishes all of the necessary paperwork—including a written statement addressing their need for assistance.
Surprisingly, 100 mortgage companies participating in the program receive kickbacks paid by taxpayers, to reduce payments and as of two months ago, a mere $132 million has been utilized from an estimated available $75 billion—said the Government Accountability Office.
Despite facing harsh criticism, program administrators feel they have made strides in addressing the nation’s foreclosure issue. More foreclosures are on the horizon and the market continues to take hits while already gasping for dear life. Perhaps heavier program regulation is required in order to best monitor the use of funds or lack thereof. If dealing with foreclosure, it is highly recommended one get in touch with an attorney.Post Tags: foreclosures, housing assistance