Feds Scold BofA, Wells Fargo on Loan Modifications

The Treasury Department on Tuesday announced that only 9 percent of eligible home owners had been helped by the federal program to modify home loans and prevent foreclosure.

It scolded banking giants Bank of America and Wells Fargo, both of which received federal bailout money, pointing out that these banks have been among the least willing to assist troubled borrowers.

Bank of American modified 4 percent of eligible loans, and Wells Fargo modified 6 percent.

Big banks that did better included JPMorgan Chase & Co., which modified 20 percent of eligible loans, and Citigroup Inc., which modified 15 percent.

The bank with the best results was Saxon Mortgage Services Inc., which helped about 25 percent of its eligible borrowers.

Source: The Associated Press, Alan Zibel (08/04/2009)

Hope for modification of home loans?

Ocwen Sees Value in ‘Prudent’ Modifications.. “We do this via a complicated, proprietary process involving technology and financial models.”

FHA Pairs Modification Efforts with HAMP.. The program calls for a three-month trial period during which borrowers will be expected to make payments of the amount of the future modification. Only once the borrower remains current on all payments under the trial period, the mortgage can be considered for modification.