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Treasury Department Report Shows Temporary HAMP Loan Mods Have Increased

November 18, 2009

As West Covina loan modification attorneys, we were interested to see the Treasury Department's monthly report on the progress of the federal Making Home Affordable plan. Lenders participating in the mortgage relief program have been under fire almost since its inception, from government officials, consumers and advocates who say lenders have dragged their feet on offering sustainable loan modifications. The Associated Press reported Nov. 11 that lenders have improved a bit, offering temporary loan modifications to about 650,000 eligible homeowners nationwide. However, consumer advocates now charge that few of the trial modifications have been converted to permanent modifications.

HAMP modifications were always intended to have a trial period of three to five months, during which homeowners must make payments on time to remain eligible. The report said 29% of eligible homeowners have been offered loan modifications under the program and 20% are actually participating. However, only about 1,700 permanent loan modifications had been made as of early September. The program was launched in March, so the waiting period may account for some of the lack of conversions -- but an assistant Treasury secretary said the department's early data showed a lag. Consumer advocates agree, according to the AP, and would like more aggressive penalties for banks that fail to follow through.

As Artesia loan modification lawyers, we think they're right to be suspicious. The history of HAMP shows that lenders moved very slowly to start making loan modifications, despite the incentives the government provided. It took a polite dressing down by federal officials over the summer to convince lenders to take the program seriously. Now, as the first wave of temporary loan mods becomes eligible to be converted to permanent ones, we would not be surprised to see more reluctance from lenders. History and studies have shown that lenders don't believe loan modifications serve their best interests, even though they seem to think appearing to comply with HAMP is important. Lenders may need another meeting, or enforcement laws with some teeth, to convince them to follow through.

Howard Law LLP represents borrowers throughout California who have been unable to get their applications for a loan modification fairly considered. That includes people who have been delayed by red tape, repeated loss of paperwork or apparent miscommunications between different branches of the company. In our practice as San Diego County loan modification attorneys, we hear stories like this over and over. In some cases, loan services move forward with a foreclosure even though another department is considering a loan modification or has actually agreed to one. We move aggressively to stop these unfair and potentially illegal foreclosures, filing lawsuits whenever necessary to protect our clients' rights and homes. In loan modification cases, our goal is to keep clients in their homes at a monthly payment they can afford for the long term.

If you need a loan modification but you're frustrated by your loan servicer's behavior, you should talk to Howard Law right away. To set up a free, confidential consultation, please contact us through the Internet or call 1-800-872-5925 toll-free.