More than 15,000 South Floridians receive permanent loan modifications
The Obama administration released its May report for the Making Home Affordable loan modification program today showing that about 15,050 borrowers in Palm Beach, Miami-Dade and Broward counties have received a permanent monthly payment reduction. But nearly 429,700 homeowners nationwide have been cancelled from the program, mostly after initial income claims to earn a trial modification could not be verified, said Treasury Department officials this morning.
The number of cancelled trial modifications was just 155,173 in April. HUD Secretary Shaun Donovan said the large increase in cancellations followed the administration’s push to get as many struggling borrowers into the program as possible during its early months in spring 2009.
Trial modifications were approved on a borrower’s statement of income, which may not have been verifiable to make it a permanent modification. “We are not surprised by the significant number,” Donovan said. Lenders are now required to get income verification before beginning a trial modification.
Monday’s report included new information on what happens to people kicked out of the program, showing about 49 percent are able to stay in their homes through an alternative modification. Of the remainder, about 4 percent go into bankruptcy, 7 percent go into foreclosure, 2 percent do a short sale or deed in lieu, 9 percent become current on their loan and no longer need the program, and 1 percent pay off their loan. About 26 percent still have action pending on their loan.
As always,
Shawn