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The Story So Far on the Gov’t Loan Mod Program
We’ve created a resource page on the government’s loan modification program that puts all of our reporting in one place. Take a look. For those looking for a rundown, below is our summary of the program and the problems it has encountered.
The administration’s foreclosure prevention program began operation last April. The $75 billion program, called Making Home Affordable, focuses on reducing the monthly mortgage payments of struggling homeowners.
Mortgages that are owned or guaranteed by government wards Freddie Mac or Fannie Mae are automatically eligible. Other mortgages are eligible only if the servicer has signed a contract with the Treasury Department. More than 100 servicers have signed up. Mortgage servicers are the companies that specialize in collecting payments and handling individual accounts; they are frequently subsidiaries of banks, but sometimes are stand-alone companies.
And The World’s Longest Trial Mod Is…
Earlier this month, we asked our readers to tell us if they’d been stuck in a trial modification in the government’s foreclose prevention program for half a year or longer. Trial periods are designed to last only three months, after which mortgage servicers are supposed to either give homeowners a permanent mod or drop them from the program.
While homeowners in trial modifications have had the benefit of seeing their monthly payments drop (by an average of $522), there are adverse consequences when a trial drags on, not the least of which is the stress and fear of homeowners not knowing whether they’ll be able to keep their homes.
Hundreds of readers wrote in. And the longest mod turned out to be just about the longest possible: Marlene Colon of Tinton Falls, N.J., and Deb Franklin of Airville, Pa. both first received trial mods starting in May, in the first few weeks of the program. That means they’ve been waiting nearly 10 months to find out whether they will be getting permanent modifications.
Chase and Other Servicers Leave Many in Loan Mod Limbo; Treasury Threatens Penalties
About 97,000 homeowners in the government’s mortgage modification program have been stuck in a trial period for over six months. Most of them, about 60,000, have their mortgages with a single mortgage servicer, JPMorgan Chase.
Trial periods are designed to last only three months, after which mortgage servicers are supposed to either give homeowners a permanent modification or drop them from the program. According to a ProPublica analysis, about 475,000 homeowners have been in a trial modification for longer than three months.
While the Treasury Department has so far allowed servicers to stretch the trials without repercussions, the government issued little-noticed guidelines in late December, warning that lenience will end at the end of this month. Servicers will have to clear out their backlogs, and those that don’t abide by the guidelines could face "financial penalties," said a Treasury spokeswoman. But Treasury has been vague on how big those penalties will be.
New Data: See the Mortgage Mod Logjam for Each Servicer
The logjam of people stuck in trial modifications continues. Data released by the Treasury Department on Wednesday shows that the number of trial mods that have become permanent jumped in January, but the overall number is still just a small percentage of the number of borrowers who've begun the trials.
To illustrate the performance of the servicers in the program, we've created an interactive breakdown of the data by servicer. There, you can see how bad the logjam is at each one.
New Bailout Page: How Deep Is the Gov’t in the Red?
Since the bailout began in October 2008, we’ve tried to keep you up to date on just how deep in the red the government is. Now we’ve launched a special page of our site just for that purpose.
Our bailout database tracks every dollar and every recipient. Our summary page gives an overview not only of how much money has gone out the door, but also how much the government has reaped in revenue.
If you check it out, you’ll see that, cumulatively — we track both the TARP and the separate bailout of Fannie Mae and Freddie Mac – the bailouts are at $306 billion net outstanding. We arrive at that number by accounting not only for the bailout money that has been returned, but also for the revenue that the government has received as a result of its investments and loans: dividends, interest, fees and warrant proceeds.
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Financial Reform Amendment Would Address Loan Mod Problems with ‘Homeowner Advocate’ – 5/7
Disorganization at Banks Causing Mistaken Foreclosures – 5/5
Treasury, Ahem, Clarifies Goals for the Mortgage Mod Program – 3/25
TARP Watchdog Launches Audit of Bailout Contracts – 2/9
Chase Denied Loan Mods for Now Forbidden Reason—Homeowners in Limbo – 2/4
Homeowners Say Banks Not Following Rules for Loan Modifications – 1/14
Bailout Breakdown: Losses Likely to Be Larger Than Treasury Estimates – 12/11
Homeowners Getting Blame for Lack of Loan Mods, but Evidence Points to Banks and Servicers, Too – 12/9
We're tracking where the bailout money is going. Our lead bailout reporter – and blogger – is ProPublica's Paul Kiel. Lead developer is Dan Nguyen.

- Our frequently updated database tracks every dollar. In the scorecard, we provide a summary generated from the latest numbers.

- Our bailout recipient list tracks the companies to which Treasury has committed money.
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