More homeowners in trouble due to lost income
The latest wave of troubled American homeowners is a surge of people in financial danger not because of reckless gambling on real estate, but because of lost income. One homeowner approached mortgage company Countrywide, now part of Bank of America, for a loan modification, but the lender instead offered her a refinancing because she did not present a big enough problem to merit aid. Although the borrower had just lost her job, she had never missed a mortgage payment, and the bank said it was focusing on borrowers “already in severe threat of foreclosure.” A spokesperson for the Department of Treasury said that these homeowners are eligible for loan modifications under the Making Home Affordable program, and that mortgage servicers have offered to modify more than 100,000 loans since the program was introduced. The spokesperson did not say how many loans have been successfully modified, noting that the Treasury was working with lenders to “fine-tune” reporting systems.