The Obama Administration says the latest figures on its program to help homeowners achieve mortgage medications shows the program is finally picking up speed after mostly spinning its wheels for much of last year.
The program was launched in February and was the cornerstone of President Obama's homeowner rescue effort. However, the program went months with very few permanent modifications to its credit.
The U.S. Department of the Treasury and the Department of Housing and Urban Development have released an update on the Administration's Home Affordable Modification Program (HAMP), showing a significant acceleration in December in the rate at which borrowers are being approved for permanent modifications.
As of December, more than 110,000 permanent modifications have been approved, including 66,000 that borrowers have accepted and 46,000 awaiting only the borrower's signature. Under HAMP, more than 850,000 homeowners have had a median payment reduction exceeding $500.
"Treasury is committed to working with servicers and borrowers to sustain this improved pace," said Chief of Treasury's Homeownership Preservation Office (HPO) Phyllis Caldwell.
There is ample finger pointing for the past delays. Wells Fargo & Co. told the Wall Street Journal last week that 10 percent of its mortgage borrowers who have made the required trial payments under the program haven't provided any documents. Another 15 percent have provided some, but not all the needed paperwork.
But homeowners, at least the ones writing to ConsumerAffairs.com, tell a much different story, a story remarkably consistent in its description of indifference and incompetence.
"Our payments were on time, Litton Loan Servicing offered us a trial loan modification, we made the three payments -- they closed out our loan modification without notifying us, and afterwards stated they needed an IRS form and didn't have it, so they turned us down," Chris, of Anza, Calif., told ConsumerAffairs.com.
But Chris insists he provided the IRS form at the time of his application and was in constant contact with the team working on his modification and at no time did anyone mention a missing IRS form.
John, of Vancouver, Wash., said he also experienced frustration trying to modify a mortgaged serviced by Litton.
Similar stories
"They do not return phone calls, lose any information that you send to them, and lie on a continuous basis about how they are going to help you out," John told ConsumerAffairs.com. "I lost my job in May 2009 and my wife has had her hours reduced. Litton sent us a letter explaining the government's new program that is supposed to help American families not to lose their homes. We followed their instructions to the letter and after numerous phone calls and three weeks of lost time were told that they would not modify our loan because their investors said we owed more on the house that it was worth. Are you kidding me?"
Other consumers working with other loan servicers tell similar stories -- documents are requested and faxed, only to hear weeks later that the servicer doesn't have the documents and they need to be resent.
Meanwhile, Treasury officials insist the program is improving. HAMP was designed to offer through 2012 up to 3-4 million homeowners reduced monthly mortgage payments that are affordable and sustainable over the long-term. Currently, several million homeowners are estimated to be eligible for the program.
Do loan servicers actually prefer that your home go to foreclosure? One consumer group thinks so.
