New changes will streamline mortgage mod program

October 13, 2009 06:44PM

Banks will present Banks will present to the Obama administration a plan to rework the $75 billion “Home Affordable” federal program. According to JPMorgan Chase, the new plan includes expanding the program to allow interest-only periods on reworked loans, seeking to bring more homeowners into the initiative. “The benefit of allowing interest-only periods as well would be a significant pickup in terms of mods being done because the current methods often fail to allow loans to pass required tests on whether modifications serve lenders better than foreclosures,” Douglas Potolsky, senior vice president at JPMorgan’s Chase home-loan unit, said. So far, only a couple thousand loan conversions have been completed under the current plan due to an extensive paperwork process, according to Laurie Ann Maggiono, director of the Treasury’s policy office for homeownership preservation. The new plan will include document changes, such as creating more “customer-friendly” layouts, eliminating the need for homeowners to provide tax returns and streamlining the lengthy paperwork process. [Bloomberg]