The Mortgage Modification Muddle

After the economical crash, mortgage lenders were given bailouts from the Federal government with the goal that the lenders would help Americans stay in their homes and continue to pay a reduced amount if they qualified for a modified mortgage. This is potentially a huge help to those who're struggling to pay their mortgage payments due to the struggling economy, especially as most of the homeowners who're having their homes foreclosed on have sub-prime mortgages which have been common in recent years for home buyers who have less than ideal credit.

However as the Obama administration has discovered, some of the lenders which have received large sums of money to help out the American people have done very little at all. The US Treasury department has spent or dedicated vast sums of money to financial institutions for the purpose of reducing the number of foreclosures across the country. In response, some of the major banks that have received funds have done very little to help alleviate the situation.

In the first week of August, 2009, the Obama administration published the first of many monthly reports regarding the banks' assistance to those homeowners who qualify for mortgage modification because they've fallen behind on their payments so as to avoid having these homes fall to foreclosure. As many as two and a half million homes may fall into foreclosure this year it is expected.

Unfortunately, the mortgage lender bailout has been revealed as a disappointment by the first of these reports. Some of the lenders, such as Bank of America and Wells Fargo, have only extended offers of modifications to between 12 and 13 percent of qualifying homeowners. JP Morgan bank sits at the other end of the scale with modification offers running at around 30% of eligible homeowners.

It should prove to be interesting what the result of the monthly published figures are; having your figures be easily available to the public can sometimes be a stimulus for businesses or corporations to do a better job. Certainly, having these government funds utilized in the manner for which they were designated would be a move forward at the very least.

Hopefully, with the release of these facts and figures, the banks who've eagerly accepted the government bailouts will feel more obligated to do what needs to be done and help frustrated and strapped homeowners find a way to make their mortgage payments or at least not ruin their credit rating. At the very least, it's time we see more big businesses held accountable for what they do with their federal bailouts.