Wednesday, June 17, 2009

More Government Money for Loan Modifications

In March, the federal government put aside $50 billion. This money was to entice lenders into allow borrowers to modify their loans so as to be more affordable. But the program has been less than successful.

During first quarter, 2009, 4 millions borrowers were delinquent on their loan payments, but only 50,000 were enrolled in the modification program.

Much of the blame lies with the lenders, who were not prepared for the onslaught of modification applications.

In response, the government has increased their incentive by another $3.1 billion to get banks to streamline their approval process.

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