Thursday, August 12, 2010
"This will allow people to have more certainty that the modification they want will materialize," said Suzanne Boas, president of CredAbility, formerly the Consumer Credit Counseling Service of Greater Atlanta.
However, before getting too optimistic, of the 1.2 million people who've started trial modifications, fewer than 300,000 have received permanent assistance. Another 278,000 have washed out of the program either because they didn't send in timely payments, hand in the required documents or meet the eligibility criteria.
Paperwork has caused all sorts of problems for the president's signature foreclosure rescue program- “HOPE Loan Modification”. In order to get the effort off the ground quickly, administration officials allowed servicers to place people in trial modifications before verifying that they were indeed eligible for the program.
Originally intended to last three months, the trial period was meant to give troubled borrowers a chance to prove they could make the modified payments and qualify for a so-called permanent modification, which lasts five years.
Instead, many homeowners have been stuck in trial modifications for months and months while they wrestle with servicers over the documentation requirements. The financial institutions say that borrowers aren't sending in the needed forms; homeowners contend the servicers are losing them.
Source: NEW YORK (CNNMoney.com)