Loan-modification program not meeting its goals

Filed in archive mortgage news on July 28, 2009

The Obama administration had the right intentions when it came up with a program to reduce the number of home foreclosures across the country by modifying existing mortgage loans. Problem is, the program hasn't had the impact that administration officials had hoped for. That's why housing foreclosures continue to soar to record levels.

That's why administration officials have called together the executives of 25 mortgage-servicing companies to meet at the White House tonight. According to a story in the Wall Street Journal, the meeting will cover ways in which mortgage companies can help homeowners who are already late in their payments or at risk of becoming late.

Homeowners can certainly use the help. With unemployment near 10 percent across the nation, many are finding it difficult, it not impossible, to pay their mortgage loans. Loan-modification efforts were supposed to help some of these people keep their homes. The goal was to have mortgage companies work out new payment schedules that homeowners would be able to meet.

This hasn't happened often enough. Many loan companies, for instance, won't work with homeowners until they have already fallen behind in their mortgage payments. I think you'll agree, this kind of defeats the purpose.

Let's hope today's meeting results in a renewed resolve to help keep homeowners in their homes. Foreclosures help no one, and they are a blight on neighborhoods.