Last Tuesday, Aug 04, 2009 the Treasury Department announced that big lenders such as JP Morgan Chase and GMAC have started mortgage loan modification on only 20% of eligible mortgages. Overall, only 235,247 or only 9% of all homeowners in the US had actually been helped by the federal government program to save American homes going into foreclosure. Bank of America and Wells Fargo was mentioned to be among the slow lenders who failed to reach large numbers of eligible borrowers. They only started modifying loans on 4% and 6% of eligible borrowers.

According to Michael S. Barr, the assistant secretary for financial institutions, there were significant variations in performance that lenders had made very slow progress in modifying mortgages. He expressed that they were disappointed in the performance and they had expected banks and lenders to do more. The release of data showing the progress of individual institutions is part of a Treasury effort to push banks to modify loans faster.

Since the mortgage modification program was announced back in February 2009, mortgage holders have criticized the slow response by lenders. GMAC, for instance, was refered to as the worst offender. After trying for 14 months, a customer comments GMAC’s performance on NY Times and says that the reps were ill-informed, take forever to respond and generally don’t seem to want to move an inch.

In the press conference on Tuesday, Mr. Barr pointed out that he expected institutions to modify 500,000 loans through the program by November this year. For some lenders to actually reach the borrowers, it would mean better training, ramping up capacity or treating people better in their call centers.

Popularity: 1% [?]