Banks failed to provide sufficient Mortgage modifications - By: Billy Alverado

In today's economy the one safeguard that homeowners have been able to lean on in times of trouble are mortgage modifications. While these adjustments have had a positive effect for many homeowners, recent news tells us that in many cases the mortgage companies have failed to provide sufficient adjustments to homeowners to allow them to survive foreclosure. What this tells us is that the banks are going to have to take a more serious look at the modifications they provide to distressed homeowners. 2009 does not promise to be any better for most homeowners than 2008 was and this means there will have to be additional mortgage modifications for homeowners facing foreclosure.
A recent article in the LA Times showed that while mortgage companies are attempting to provide relief to homeowners facing foreclosure, they are failing to provide sufficient help. The report showed that less than half of the modifications made last year actually reduced payments by more than 10%.
The Federal Office of the Comptroller of the Currency and the office of Thrift supervision published this report based on the analysis of over $6 trillion dollars worth of loans. The report went further to explain why these loans are falling back into default. The catalyst for these negative results is a simple reality that the adjustments clearly are not generous enough to be of any true help.
"This new data shows that, in the current stressful environment, modification strategies that result in unchanged or increased mortgage payments run the risk of unacceptably high re-default rates," Comptroller of the Currency John Dugan said in a statement.
The report also went to show that the likelihood of re-default was greatly reduced for those homeowners that were supplied sufficient relief. Certainly this comes as no surprise. The mortgage companies need to realize that help is no help at all if it does not really help. Or more clearly stated, the mortgage companies are "doing too little too late".
While providing a respectable mortgage modification does not guarantee that the homeowner will not still fall back into default, the report proves that the chances of this happening are greatly reduced. Certainly the homeowners must be held accountable for some of this situation, but in many cases the homeowners are truly making a consciences effort to correct their predicament.
So what does this report tell those homeowners that may be facing foreclosure?
Does this mean that it is hopeless?
Does it show that mortgage modifications simply do not work?
Actually what it reflects is that the banks are not going to provide sufficient support without proper encouragement. This report supports the fact that it is vital for a homeowner to hire a reputable mortgage modification agency to support them in negotiations with the banks. Perhaps if more homeowners hired professionals to assist them with the negotiation process these numbers could be greatly improved.
If you find yourself in this situation, where you are faced with the possibility of foreclosure do not loose hope, mortgage modifications do work! They can save your home. It depends on you assuring that you are realistic with your financial situation do not allow pride to interfere with you receiving the proper adjustment from the mortgage company. Hire a professional agency to represent you and be completely upfront with that agency. Do not allow yourself to be one of the statics in this report, make sure your mortgage modification is sufficient to provide you the ability to stay afloat. Remember that help is not help if it does not truly help.

About the Author

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