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Stallworth's contract terminated
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Republican Pre-Conditions
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Citizens United v. F.E.C. (Part 4): Kennedy's and O'Connor's Basic Approaches to Constitutional Decisionmaking – Top Down and Bottom Up
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Collector Car Hobby Loses One of the Best—Jim Roll
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Decisions Decisions: Credit Cards or Your Mortgage?
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Loucile is looking for a Lake Erie getaway in June for three kids, ages 1, 3, and 5.
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Talk of the Town – Top entertainment picks for the weekend
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OFCCP Report
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Makers of 'Castle Crashers' unveil 'BattleBlock Theater'
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Do IT this week: Layering
Most borrowers still on temporary trial plans that reduce monthly mortgage payments
By Alan Zibel
Associated Press
Published on Wednesday, Nov 11, 2009
WASHINGTON: The Obama administration's mortgage relief program has reached one in five eligible homeowners, a government report says, but most of those borrowers are on temporary trial plans that have yet to be made final.
As of the end of October, more than 650,000 borrowers, or 20 percent of those eligible, had signed up for trials lasting up to five months, the Treasury Department said Tuesday. The modifications reduce monthly payments to more affordable levels.
To make the change permanent, though, borrowers must complete a big stack of paperwork and show they can make their payments on time. At the beginning of September, only about 1,700 permanent modifications had been made. The Treasury Department expects to release updated data later this month.
''We're seeing some early indications that the servicers haven't done enough to get all the documents in,'' said Michael Barr, an assistant Treasury secretary.
Consumer advocates say banks aren't doing enough to follow through. ''It's going to be the make-or-break issue,'' said Alan White, a law professor at Valparaiso University and a consumer attorney. The government, he said, will have to ''crack the whip or consider firing some of these servicers.''
Mortgage companies that are performing poorly, he said, should have their right to collect payments on loans revoked and transferred to companies that are doing the job better.
One legal challenge to the program was rejected this week, when a federal judge dismissed a class action lawsuit filed by a group of Minnesota homeowners who sought to block foreclosures in that state. The lawsuit claimed the program failed to give people proper notice when they were rejected or the right to appeal.
U.S. District Judge Ann Montgomery dismissed the case Monday, saying the federal government has never made loan modifications an entitlement.
Mark Ireland, an attorney for the homeowners, said Tuesday that they're disappointed and will decide later whether to appeal, but also noted that the government has since made changes to the program that satisfy some of the borrowers concerns.
Launched with great fanfare in March, the plan got off to a weak start, but now nearly 920,000 loan modification offers have been sent to more than 3.2 million eligible homeowners. That works out to 29 percent, up from 15 percent in of July.
In California, about 130,000 homeowners have been enrolled in the ''Making Home Affordable'' loan modification plan, which President Barack Obama unveiled in February. That works out to about 19 percent of the state's homeowners who were either two payments behind or in foreclosure at the end of last month, according to Treasury Department data.
Arizona and Nevada had similar rates of assistance as California, at 22 percent and 18 percent respectively. Florida was much lower, at 12 percent, possibly because of high numbers of investor-owned properties that don't qualify for the program.
Government officials say they are pressing mortgage companies hard to improve their performance. Many housing advocates are disappointed with the $50 billion plan's progress and say that getting a loan modification remains a battle.
WASHINGTON: The Obama administration's mortgage relief program has reached one in five eligible homeowners, a government report says, but most of those borrowers are on temporary trial plans that have yet to be made final.
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