Wednesday, July 7, 2010

“Government’s Push for Participants in Loan Modification Program Causes More Homeowners to Face Foreclosure”

By:  Kate Cavallaro
       Law Offices of Robert E. Brown, P.C.

An article from the Washington Post’s Associated Press cites that more than a third of the 1.24 million borrowers who have enrolled in the $75 billion mortgage modification program have dropped out. The article claims that the effort by the Obama administration to help people from losing their homes is falling short.  According to the article 150,000 homeowners have left the program.  Spokespersons for the program claim that despite the drop in participants in the program, those homeowners who are no longer part of the program will still find assistance from other places.  Perhaps these homeowners will find loan modifications or loan assistance from non governmental agencies.  “A major reason so many have fallen out of the program is the Obama administration initially pressured banks to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.”  Apparently the initial pressure to  have participants in the program caused some to fail to thoroughly determine if the homeowner is actually eligible for assistance via the government’s program.

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