Asian Journal- The Filipino-American Community Newspaper

The Associated Press reported that the number of US households on the verge of losing their homes rose 7 percent from June to July 2009 as the escalating foreclosure crisis continued to outpace the government effort to limit the damage. RealtyTrac, Inc., a foreclosure tracking company reports the following:

Foreclosure filings were up 32 percent from the same month of July last year. One in every 355 homes received a foreclosure related notice, such as notice of default and trustee sale. That is the highest monthly level in the last four years.

Banks repossessed more than 87000 homes in July, up from 79000 homes a month earlier.

Nevada had the nation’s highest foreclosure rate followed by California, Arizona and Florida.

The mortgage industry has been slow to adapt to the surge in foreclosures. Many lenders needed government prodding to get up to speed with the Obama administration plan to stem foreclosures.

The Treasury Department said last week that banks modified only 9 percent of the delinquent borrowers. Bank of America and Wells Fargo Bank modified loans of only 6 percent and 5 percent respectively of the qualified delinquent borrowers.

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 insufficient 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 they signed up for our services we immediately contacted the banks and they ultimately agreed to offer modification terms to our clients.

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.