Donovan: Foreclose Prevention Program, Time to Pick Up Speed

The Making Home Affordable loan modification program started out strong but needs to work full time to achieve its goal of helping as many as 4 million distressed homeowners in the span of three years since it was launched on February 18, according to U.S. Housing and Urban Development Secretary Shaun Donovan.

The loan modification program was launched by the Obama Administration to help distressed homeowners and reduce the number of foreclose properties in the country. Donovan pointed out that in the short time that the program was launched, it has already made about 400,000 loan modification offers. He said that the figures were bigger compared with previous federal efforts to curb the foreclosure crisis.

However, Donovan noted that President Barack Obama made a goal of altering between 3 to 4 million loans to make them affordable within three years from the day the program was launched.

According to industry analysts, the program has to work full time to get to the level that it could provide relief and make a difference to the lives of distressed homeowners.

Donovan said that the Obama Administration has intensified its efforts to make it possible to achieve large-scale loan modifications, adding that this involves mortgage servicers getting the things necessary to achieve the goal, including resources, staff and systems.

According to Donovan, senior administration officials and top executives from mortgage lending companies have met last month to discuss how to improve the efficiency and effectiveness of the program.

He added that both parties have set up a goal of getting 500,000 thousand troubled loans into trial modifications by November 1. Already, the Treasury Department had released its first report containing the number of modifications offered by each participating lender.

The report showed that the Bank of America topped in the number of mortgages eligible for the program, with 800,000 loans, which are double the total number of mortgages eligible for modification by the second largest lender. However, the report noted that the bank offered trial modifications to just 3.5 percent of its total eligible loans.

Meanwhile, Saxon Mortgage Services is the lender with the highest number of completed loan modifications, amounting to 25 percent of its total eligible loans. The lender is followed by J.P. Morgan Chase Bank at 20 percent and CitiMortgage at 15 percent.

Related Posts:

• Web Portal to Speed up Repossessed Homes Program
• HUD Nominee Donovan Expected to Lead the Obama Administration’s Foreclosure Prevention Campaign
• Foreclosure Properties Prevention Taking Effect in Arizona
• Mortgage Defaults Up, Repossessed Houses to Rise
• Billionaire Says Rates Help Government Foreclosures Program