Hi all,

The Govt. seems to have become active to help the struggling borrows with lower payments through loan modification programs. The US Department of Treasury has recently threatened the lenders and loan servicers of monetary penalties and sanctions if they are found lacking in their efforts to help borrowers with the Home Affordable Modification Program (HAMP).

It has decided to take a number of steps to make sure the lenders and loan servicers, who have so far been reluctant in offering help through modifications, speed up their efforts to turn existing trial modification plans into permanent ones. The Department of Treasury will now be sending 'SWAT' teams to mortgage servicers' offices to look into the causes for delay in offering permanent modification plan to eligible borrowers. The Department of Treasury also requires the loan servicers to report to it on a daily basis on the progress of the HAMP.

When the HAMP was launched in February this year, the target was to help almost 3-4 million borrowers with loan modifications by 2012. But till date, only 651,000 loans have been successfully modified. Almost 375,000 trial modifications are set to expire by the end of this year. Unless these are turned into permanent modification plans, they will revert to previous terms, triggering rise in number of foreclosures.

Thanks,

Jerry