Obama Administration Announces New Steps for Loan Modifications


The Obama administration disclosed a plan on Monday intended to increase pressure on mortgage companies to permanently reduce monthly payments for troubled homeowners.

Under the guidelines, the government will fine lenders that fail to find ways to increase the number of homeowners who are given relief on their mortgage bills.

The move is the government’s latest endeavor to reinvigorate a $75 billion program that promised to stem foreclosures and help hundreds of thousands of struggling homeowners with their mortgages. So far, however, only a small percentage of eligible Americans have had their mortgage payments reduced, and many are encountering difficulties as they try to make the cuts permanent.

The Treasury Department has blamed banks and mortgage companies, which it says have been slow to process documents, for the program’s lukewarm start.

http://www.financialstability.gov/latest/tg_11302009b.html

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