Asian Journal- The Filipino-American Community Newspaper

The US Treasury Department reports last August 5, 2009, the slow progress of the banks on the loan modifications program. Of the 38 loan servicers that registered in the Obama Program, only 9 percent of the delinquent borrowers were modified. This is equivalent to 235,000 loans modified since the program started. Among the reasons the banks said is that the investors are not cooperating in the program. The other main reason is the shortage of staff in the bank’s loss mitigation department that handles loan modification. A summary of the banks performance on loans modified as a percent of delinquent borrowers is as follows:

1. Saxon Mortgage 25%
2. Aurora Loan Services 21%
3. GMAC 20%
4. J. P. Morgan Chase 20%
5. Citi Mortgage 15%
6. Wells Fargo Bank 6%
7. Bank of America 5%

Answer: The statistics showed that the banks are very picky on what loans to modify. The main reason is that the staffs in the Loss Mitigation Department of the bank are so busy that they have no time to analyze the individual borrower’s case. There is huge number of applicants but the banks staffs are insufficient to serve them effectively. Many of my clients tried to do the loan modification themselves but they are unsuccessful. After signing up for our services we immediately contacted the bank and they later on agreed to have our client’s loan modified.

Answer: The Obama Loan Modification Program will modify loans that are secured through Fannie Mae and Freddie Mac. FHA loans have their own program of loan modification.

Answer: Borrowers with FHA guaranteed loans should contact their lender and request loan modification. They may also contact a reputable attorney who do loan modification to negotiate with the lender.