New Incentives for Mortgage Modifications

The U.S. Treasury continues to push for homeowner assistance programs. New incentives are now being provided for lenders who agree to modify mortgages with severe home-price deadlines, as well as pursuing “short sales,” which allow the homeowner to sell their property quickly, but for less than the balance owed.

In order to increase anti-foreclosure methods, the government is hoping that these measures will help stabilize the housing market and aid in overall economic recovery.

Borrowers whose homes are considered below the value of their current mortgages are expected to be helped the most; that is over 20 million applicable homeowners.

Through these new incentives, affected homeowners supposedly can have their loans modified more easily for assistance, or sell of their property, if they choose to do so, more easily.

Still, more barriers exist that prevent many people from receiving the help they need. While over 55,000 borrowers have already received some kind of assistance, the Obama Administration continues to modify their mortgage rescue plans; many kinks are still in need of being ironed out.

Foreclosures continue to rise, along with unemployment rates. Loan service providers are still updating their systems to comply with the $75 billion effort, making loan modifications a long, slow process. And investors themselves are fuming, lobbying against a bill that prevents them from suing providers that issue loan modifications.

They also maintain that while they have taken a deep hit following the new legislation, banks have unfairly not been hurt, but helped instead.

Also, in order to get the newly-proposed aid, borrowers must first make three mortgage payments on time, which many are having trouble doing in the first place.