For Florida borrowers, the taxpayer-funded program to modify home mortgages affected by the crash has been minimal, according to the South Florida Business Journal, citing a new federal report. [more]

Record-low mortgage interest rates helped to further stabilize the housing market over the past month, according to the latest “Housing Scorecard” released by the Obama Administration yesterday. While new and existing home sales stuck at lower levels than those seen prior to the expiration of the homebuyer tax credit, prices have stopped slipping after 33 consecutive months of declines, the report says, and in the second quarter of 2010, U.S. homeowners gained $95 billion worth of home equity. TRD [more]

President Obama’s mortgage modification plan took a hit yesterday, after Treasury Department data revealed that the rate of default on mortgages among homeowners in the program almost doubled in March, according to the New York Times. The defaults came even after homeowners enrolled in the program had received less expensive mortgage terms, as more than 2,800 borrowers holding the modified loans were unable to make payments since the program began last fall. Currently around seven million households are delinquent in their mortgage payments.

As some federal housing subsidies begin to wind down, criticism has been directed toward President Obama’s mortgage modification program which opponents say takes too long to help troubled homeowners. Elizabeth Warren, chair of the Congressional Oversight Panel for the Troubled Asset Relief Program, commented on the Obama plan to Bloomberg’s Betty Liu. Despite the efforts by the Obama administration, 2.8 million homeowners got foreclosure notices in 2009, according to the congressional panel, and one in four homeowners with a mortgage is currently underwater.

Only 31,382 troubled homeowners have received permanent mortgage modifications through Obama’s federal program, while nearly 30,650 people in trial modifications have been denied as of Nov. 30, according to a recent report released by the U.S. Treasury Department. Since the program launched in the spring, a total of 759,058 trial modifications were started, but only 4 percent of them became permanent ones. “Our focus now is on working with servicers, borrowers and organizations to get as many of those eligible homeowners as possible into permanent modifications,” said Phyllis Caldwell, chief of the Treasury’s Homeownership Preservation Office. The lack of permanent modifications has created concerns that the $75 billion plan will fall far short of the federal mortgage modification plan introduced this spring to help up to four million delinquent homeowners.

The Treasury Department and Department of Housing and Urban Development has announced a plan to help borrowers convert to permanent loan modifications. As expected, the announcement emphasized the importance of ushering borrowers currently in trial modifications into permanent modifications. Phyllis Caldwell, chief of the Treasury Department’s Homeownership Preservation Office, said in a press release that with the success of the trial modification program, agency officials will aim to augment the permanent modification plans. “We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones,” Caldwell said. The plan would involve applying more pressure on banks to convert trial modifications into permanent ones. It’s a task that has proved tricky — while over 650,000 borrowers have qualified for trial modifications under the Treasury’s program Making Home Affordable only 375,000 of those are expected to transition to permanent modifications by the end of 2009. The Treasury plans to disclose how many permanent modifications each bank implements, according to Michael Barr, assistant secretary for financial institutions, a move intended to call out those banks that aren’t performing adequately. “We’re going to be quite focused and direct on particular institutions that are not doing a good job,” Barr said. “Some firms ought to be embarrassed, and they will be.” TRD

The U.S Treasury Department has released the latest numbers for the Home Affordable Modification Program in its October report. Out of all the major banks, Bank of America has approved the least amount of mortgage modifications, granting mods to only 21 percent of all eligible homeowners, according to the report. CitiMortgage approved the most, offering modifications to 50 percent of eligible homeowners and JPMorgan and Wells Fargo trailed close behind CitiMortgage, offering mortgage modifications to 43 percent and 41 percent of homeowners, respectively. Since the program began in May, there have been 650,994 trial modifications started across the country, with 28,773 active modifications currently in New York state. In October, 163,000 new trial modifications were started, up from 100,000 new trials started a month earlier, according to the report.

The way homeowners deal with their mortgage problems can have a
significant impact on their credit scores, according to VantageScore
Solutions, a scoring company created by the national credit bureaus
Equifax, Experian and TransUnion. Mortgage modifications that roll
penalties into the principal can actually improve borrowers’ scores,
the company found. Refinancings of underwater mortgages may have little
to no impact on credit scores, no matter how close to delinquency a
homeowner was before refinancing. But short sales can lead to
significant drops in credit scores, as can a decision to walk away from
mortgage debt. [more]

It’s no simple task to modify a home loan, but it can and sometimes
must be done. South Florida experts offer some tips on how to pursue a
loan modification, such as demonstrating the ability to make some type
of payment even if a homeowner is unemployed, what to expect in terms
of payment reductions and how to navigate the complex and often
frustrating process. A call to the loss mitigation department of your
bank can begin the process. [more]

Citigroup said it has hired 1,400 employees for its mortgage business
over the past few months to meet the Obama administration’s mortgage
modification goals. The company has also invested in additional
telephone lines and infrastructure to process mortgage modifications.
The company already had about 2,600 employees dedicated to dealing with
late mortgage payments, said Sanjiv Das, CEO of CitiMortgage. The
division now has a staff of about 10,000, the same level it was at last
year before a several rounds of job cuts. Banks in the federal Troubled
Asset Relief Program, including Citigroup, are required to participate
in the government’s Home Affordable Modification Program. [more]