Propublica:
Buried in the massive financial regulation overhaul that President Barack Obama signed today, two provisions force the Treasury Department to increase the transparency of its loan modification program.
One measure takes aim at the secret formula the government developed to test homeowners’ eligibility for a modification. Treasury will now have to post its details online. The other measure requires that the government divulge far more data from the program.
Consumer advocates have long criticized the lack of transparency in the program and the loan modification process. That lack of transparency is particularly critical, they say, because the banks and other companies that service mortgages frequently make errors. As we’ve reported, in the worst cases those mistakes lead to foreclosure.
And Propublica reports that loan modification continues to backlog continues despite banks' pledges to improve the system. JP Morgan Chase is the #1 bank that has the worst loan modification delays:
Two months ago, representatives of banks and other mortgage servicers participating in the administration's mortgage modification program visited the Treasury Department and made a commitment: they would dramatically reduce the number of homeowners stuck in trial modifications by the end of June.
That hasn't happened. New data released today shows that about 166,000 homeowners have waited six or more months in plans that only temporarily reduce payments. That's about one-third of the current trials, but the trial period is supposed to last only three months.
Read on.
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