Last Tuesday, at the Treasury Department, a verbal agreement was reached between executives from 25 mortgage companies and the Obama administration to set a new goal of modifying an additional 500,000 loans by November 1st. The Obama administration stressed the urgency for this program to help borrowers who are close to foreclosure.
This was due in part from Obama's administration's concern that it would fall far from their original goal of helping up to 4 million troubled borrowers that needed modified loans in order to stay in their homes.
As of last week only about 200,000 borrowers were enrolled in a three-month trial loan modification program out of close to 370,000 who were offered loan modifications by various mortgage companies.
However mortgage companies have been somewhat frustrated with the Obama administration because they felt that the public was lead to believe that the mortgage modification program would be instantly available and it has not.
Almost since the program started, borrowers, activist groups, and housing counselors all have complained that the program was extremely slow and at the same time it's been quite confusing and a bureaucratic nightmare.
Many of the housing counselors have complained that borrowers are being charged fees upfront and have been given not only inaccurate information, but confusing information as well about the program. Sadly, the delays are long and, in many cases, some lenders still continue to foreclosure on many properties while loans are still being reviewed for a modification.
Part of the issue with the slow pace of the program is due to the fact that loan servicers have had to hire and train thousands of new employees to help maintain the large amount of loan modification requests coming in daily.
Furthermore, many of the mortgage companies involved with this program have also been slowed by thousands of calls from borrowers who are trying to take advantage of the program, and the mortgage companies have to take the time to sort through and figure out who is really facing legitimate financial hardship.
If this program doesn't speed up quickly then recent optimism about a housing market and economic recovery could fade just as fast because as more borrowers fall into foreclosure there will be more downward pressure on home prices which no one wants to happen.