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Written by admin on November 14th, 2009

More Homeowners Getting Mortgage Relief Assistance Finally

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A mortgage relief program was developed by President Obama’s administration, but it has been slow to actually reach homeowners in danger of having their homes foreclosed. In the meantime foreclosures have continued to rise and many more are likely even as banks write off billions in bad loans.

The original mortgage relief plan was introduced in March of this year. It was announced as a program that would help millions of Americans save their homes. In reality the progress of the programs has been extremely slow and consumer complaints have been rising steadily. Many of the complaints center on the lack of willingness by the banks to work with homeowners in a cooperative manner.

The government has had to press the mortgage industry to take advantage of the relief programs and help consumers wade through the enormous amount of paperwork required. It is somewhat ironic that so many people have unaffordable mortgages due to failure to read the fine print, and that same fine print is now making it difficult for those homeowners to utilize relief programs.

But the situation seems to be changing. Over 650,000 mortgagees are now participating in trials that will last for up to five months. After five months the program can be made permanent by homeowners completing a massive package of forms and then proving they are able to make timely mortgage payments. The trial loan modification programs reduce the loan payments.

The 650,000 mortgage trials equate to 20 percent of eligible mortgages as participating in the program. But the Treasury Department has reported that offers are now being mailed to homeowners who appear to be in trouble. Over 920,000 loan modification offers have been sent to eligible homeowners of whom there are 3.2 million identified. A number in the millions only proves how consumers continue to struggle as the recession lingers.

Some states were given additional government assistance through mortgage relief programs introduced in February. The states with the highest rates of foreclosures and troubled mortgages were included in a “Making Home Affordable” loan program. In California there are 130,000 homeowners enrolled to date. To qualify you have to be at least two payments behind or the house headed for foreclosure. The 130,000 equates to 19 percent of the qualifying homeowners.

Two other states included in the “Making Home Affordable” loan programs are Arizona and Nevada. Arizona has signed up 19 percent of eligible homeowners while Nevada has signed up 18 percent.

With only 29 percent of all eligible homeowners offered loan modifications, it is obvious that the goal of helping millions of troubled mortgages is going to be difficult, if not impossible, to meet. President Obama’s administration had hoped to help up to 4 million people within a three year period.

Consumers are complaining that the mortgage holders are making it very difficult to get help. There are many stories of banks refusing to cooperate with homeowners trying to get assistance and instead forcing the houses into foreclosure. The fact that the largest banks holding the mortgage, like Bank of America, accepted government bailout funds has led to consumer resentment.