Mortgage Relief Program Now Reaching 20% of Those Eligible

The mortgage relief program put forth by the Obama administration got off to a slow start initially, but as of the end of last month, over 650,000 mortgage borrowers that are eligible for the plan had signed up. That mark is equal to of those eligible, a sign that the popularity of the program is catching on. The modifications, which are temporary until homeowners complete a rather lengthy set of paperwork, become permanent after that paperwork is completed and the homeowner can show that payment can be made on time. Only 1,700 of the modification had become permanent as of the beginning of September.

Said Michael Barr, an assistant Treasury secretary, "We’re seeing some early indications that the servicers haven’t done enough to get all the documents in." Said Alan White, a consumer attorney and law professor, "It’s going to be the make-or-break issue," further indicating that the government would have to "crack the whip or consider firing some of these servicers." White also indicated that, in his opinion, those servicers doing a poor job of completing the modifications should have their right to collect payments revoked in favor of other, better-performing service companies.

Some states are seeing a much greater need for the modifications. In California, for instance, roughly 130,000 homeowners have signed on for the "Making Home Affordable" loan modification plan that was release in February. Arizona and Nevada have also been hit hard, and large percentages of homeowners in those states have signed up for loan modifications. In Florida, which is also experiencing problems beyond the national average, only 12% have signed up for the programs, with conjecture being that many homes in the state are investment properties that do not qualify for the modifications.