December 1, 2009

Today, the White House threatened to punish mortgage lenders with fines if they don’t speed up giving troubled homeowners a permanent break on their monthly payments. With mortgage delinquencies on the rise, nearly 375,000 borrowers are eligible for permanent loan modifications by the end of December and the Obama Administration want to make sure the banks make good on granting these modifications rather than lolly gagging. Proof of reluctance to move past trial offer periods is that only 1,711 permanent mortgage modifications had been offered by September.

“Banks should be moving more rapidly and more efficiently to decisions once documents are in and we will have more detailed metrics on that in coming months,” Assistant Treasury Secretary Michael Barr said during a conference call, reported by The Guardian.

The loan modification program (Home Affordable Modification Program) is a $75 billion taxpayer-financed program put in place to curb foreclosure rates but loan servicers are known for being slow and ineffective, often “losing” paperwork.