Tuesday, August 4, 2009

Where are all of the Obama (or HAMP) Mortgage Modifications?

The recent government report shows how inadequate many lenders response has been to the Obama foreclosure prevention plan. (See Wall Street Journal article.) You really have to wonder what these lenders have been doing all of this time. I have personal knowledge of many, many loan modifications where no progress is made and the lender seems to spend most of their time losing files and asking the borrower to resubmit information. Right now it seems like this loan modification business is an incredibly inefficient operation.

Today, the government promised us monthly reports on each lender's loan modification statistics. Something good may come of all this transparency. Either the lenders will start modifying loans or maybe Congress will be able to pass the Bankruptcy modification legislation. As reported by the Wall Street Journal, talk has begun circulating among the Democrats that it may be time to try for the bankruptcy bill again. At this point the bankruptcy legislation seems unlikely, but I do think that something needs to motivate the lending industry to work with borrowers - maybe fear will motivate them!

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