Permanent mortgage loan modifications stymied by paperwork

The administration has announced that its Making Home Affordable program, its major attempt to prevent wholesale foreclosures, has signed up almost 20% of those eligible.  650,000 borrowers have started a “trial loan modification” as part of this program.  This is an improvement over the slow start of this program which was launched in February,

The problem is that paperwork is making it hard for borrowers to convert their trial modification into something permanent.   Trial modifications are eligible to be made permanent after the borrower has kept payments current for three months. But the conversion requires another round of paperwork; and the same problems that we reported on earlier with the paperwork needed to start the trial are now hindering the second step.

Here is one of our reports on the first round and some links to free counseling.  Don’t pay for counseling and don’t try to do this yourself.

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