Relief Program to Avoid Repo Homes Listings Slow to Get Off

The loan modification program has been touted as one way to help distressed homeowners avoid repo homes listings. Launched by the Obama Administration last March, the program has yet to prove its mettle in helping homeowners protect their properties from foreclosure.

Housing advocates in New York who worked with troubled homeowners who are in some kind of foreclosure proceedings or in foreclosure, said that the mortgage modification program has the potential to help thousands of troubled borrowers but was slow in achieving its goal. They claimed that many homeowners who applied for the program have yet to know whether they qualified or not.

And most homeowners who were lucky enough to avail of the program were supported by housing counselors approved by the Department of Housing and Urban Development (HUD). Those who tried to apply on their own are more likely still waiting for an answer whether they can avoid repo home listings or not.

According to housing counselors, they have a better understanding of the modification program?s guidelines than people who answer telephones for lending institutions. Because of this, they know how to deal with the case and how to work out a solution.

The public-private agency Center for New York City Neighborhoods helps distressed homeowners connect with HUD-certified counselors at nearly 70 neighborhood organizations. So far, it has handled about 400 applications for the Making Home Affordable program of the Obama Administraion.

However, only 100 of those who applied have their mortgages modified to allow them to avoid repo homes listings. The remaining applicants are still waiting for a response from lenders.

According to housing counselors, many lenders have yet to train their staff to process loan modification applications. Some of the participating lenders are CitiMortage, Bank of America, Wells Fargo and Co. and Chase.

New York City?s Department of Housing Preservation and Development commissioner Rafael Cestero said that the potential of the loan modification program is enormous. However, he pointed out that the program has been moving too slow because of the complicated process.

Under the program, some of the costs for banks and lenders that agree to modify loans will be offset.

According to Federal Reserve economists, an estimated half a million people in New York City meet the basic criteria for qualifying in the loan modification program to avoid repo homes listings.

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