Obama to Push Banks on Modification Participation

Washington, DC (AHN) – The Obama administration is expected this week to call for more transparency on banks participating in its home loan modification program.

The $75-billion program was designed to help 4 million delinquent homeowners avoid foreclosure. But recent data shows only 650,000 people have participated in the program, and only a few of those people have had their interest rates permanently lowered.

The Congressional Oversight Panel reported that as of Sept. 1, only 1.26 percent of adjustments were made permanent after the three-month trial period.

Under the program, participants must submit detailed paperwork to their banks to prove they can make their new payments. If they qualify for the new interest rate, the rate will remain for five years. It will then go back to what it was before the modification was approved.