Loan modifications still failing in South Florida

Publisher comments:

When people finally realize that loan modifications do not work, and is a carrot held in front of their noses to get as much money as possible from them, we will see an escalation in foreclosures worse than today. - Charl

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The loan mod picture is still very busy, but borrowers in South Florida continue to drop out of the Obama administration’s Making Home Affordable program.

South Florida’s metro areas had more loan modifications than any other cities in the nation in June – which is the same as in May. Statewide, Florida’s number of troubled loans getting new terms was second only to California, also unchanged.

But what’s new: Fewer South Florida borrowers had a permanent loan modification than in May.

Nationwide, the number of borrowers getting permanent loan mods is higher than the previous month. But over the long haul, the Associated Press points out, 530,000 borrowers have dropped out of the program since it began in March 2009 with 1.3 million homeowners.

The Making Home Affordable permanent modifications “are on pace and sustainable for the homeowner, as more than 50,000 trial agreements graduated to permanent in June and default rates remain low,” the Treasury’s statement says.

According to the Treasury’s report released today:

The Miami-Fort-Lauderdale-Pompano-Beach metro area had 35,621 trial and permanent loan modifications underway in June, down from almost 38,500 in May.

Orlando-Kissimmee had 15,130, down from more than 16,000 in May.

Add those two metro areas together and they account for 6.7 percent of all loan modification activity nationwide. That proportion is greater than Los Angeles, with 6.5 percent, New York, with 6 percent and Chicago, with 5.1 percent of all loan modifications nationwide under the Obama administration’s program.

The two also accounted for more than half of all loan modifications in Florida.

Only California was busier when it came to trouble mortgage modifications. In California, there were 168,155 loan modifications underway last month, compared to 92,754 in Florida.

Among lenders, Bank of America has produced the largest number of permanent loan modifications, 72,232 nationwide. JP Morgan Chase reported 54,722 loan modifications.

Nationwide, the Treasury said there were 389,198 permanent modifications were reported in June, up from 340,459 in May.

Why aren't more people getting a permanent loan modification in South Florida? I asked that question in a recent column and you can read the answers I found here.

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