U.S. Ups the Ante in Foreclosure Program
The U.S. government is offering another $3.1 billion to mortgage servicing companies to encourage them to modify loans for borrowers facing foreclosure.
More than 9 percent of 45 million U.S. mortgages, or about 4 million loans, were delinquent in the first quarter of 2009, according to the Mortgage Bankers Association.The Obama administration put up $50 billion in March as an incentive to encourage the mortgage industry to modify loans to make monthly payments more affordable.
So far, however, the plan hasn’t been very effective with relatively few borrowers able to qualify. To increase the numbers, the administration last month expanded the program to provide incentives for lenders to streamline their short-sale processes.
As of this week about 50,000 borrowers are enrolled in three-month trial modifications under the plan, the Treasury Department says.
Part of the problem, lenders say, is the volume of applicants, which has overwhelmed workers charged with modifying the loans.
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