Home Modification Program a Success?

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My sister Sandra Bridges, a short sale negotiator was on the phone with a representative of a large bank. Sandra was airing her discontent over the handling of a client’s file. She was unhappy that the file was declined. The bank representative said he shared her frustration. He told her that the bank was receiving over 300,000 short sale or loan modification requests a week. He went on to say that they were severely under staffed.

Sandra told me her story just one day after the Administration announced the success of the Making Home Affordable program. The announcement can be read in its entirety at www.Financial/Stability.gov.

Obama’s making home affordable loan modification program is reportedly on track. According to the Treasury Public Affairs Department, loan modification servicers are covering more than 85% of loans in the country. 400,000 modification offers have been extended while 230,000 modifications have been completed. At this rate, the modification program is on track to modify 3-4 million loans over the next three years.

The administration is taking additional steps to improve the performance of the loan servicers. Treasury Secretary Tim Geithner and Housing and Urban Development Secretary Shaun Donovan, in a face-to-face meeting, asked the servicers to redouble their efforts to increase staffing, improve borrower response time and streamline the application process.

The administration is also in the process of developing ways to measure the quality of the borrowers experience, such as average wait time for inbound modification requests, completeness and accuracy of information provided and response time for completed applications. Another additional protection for borrowers is that the administration is urging, Freddie Mac, the compliance agent, to develop a “second look” process to audit modification applications that have been denied.

The comprehensive Making Homes Affordable Program, MHA, was developed in an effort to stabilize the US housing market. MHA has already provided $75 billion dollars to subsidize sustainable mortgage modifications. The purpose of the modification program is to prevent more foreclosures.

Of all the people I know that have attempted a loan modification, I personally only know of one that was successful. Recently I was listening to a talk show on CNN. The topic was loan modifications. Only one person called in to report a successful loan modification. He did it by himself and it took one year!

With one bank reporting up to 300,000 requests per week I hardly think that 230,000 modifications since February can be seen as a success. I recommend that Mr. Geitner man the phones of a major banks loss mitigation department for one week! It could be a matter of good home $$’s and sense.