Just a tiny fraction of struggling homeowners have gained benefit from the government’s $50 billion program to ease the mortgage crisis. A list has also been that shows the lenders which are acting lay.
Only 9 percent of eligible borrowers have benefited by the program and had their mortgage payments reduced with modified loans during the last month. Furthermore, a report showed that 10 lenders had not changed a single mortgage.
Bank of America and Wells Fargo both received billions in federal bailout money but have lagged behind government expectations. Bank of America was able to modify just 4 percent of eligible loans, whereas Wells Fargo did only 6 percent. Wachovia, which was taken over by Wells Fargo in December, modified only 2 percent.
Michael Barr, the Treasury Department’s assistant secretary for financial institutions said that they thought they could have ramped up better, faster, more consistently and done a better job serving borrowers and bringing stabilization to the broader mortgage markets and economy.
The government is trying to obtain better results from its main anti-foreclosure program that has put about 235,000 borrowers on the way to loan modifications out of the 4 million targeted for help.
After being stressed upon, Wells Fargo plans to speed up its efforts, by signing up most borrowers for the Obama plan with one phone call and sending customers a trial offer within two days.
The Bank of America also promised to improve its processes for reaching those in need and pledged to continue working with the Treasury Department to help homeowners who fall outside the program’s eligibility requirements.
Many banks don’t yet have the capacity to process the volume of loan modifications. Many of these modifications are very hard to do; they take time and it is not possible to rush. But lets hope that the banks and lenders that have been requested to speed up do show some progress and become successful in helping homeowners to prevent foreclosure.
