Mortgage modification Banks: Who Are The Movers And The Slackers

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Mortgage modification and mortgage refinance are at the top of Obama’s administration priorities in domestic finance. Washington wants Banks to do their bit for the economy and provide reasonable loan modifications for the hardest hit families and is willing to pay them for the favor.
However banks don’t seem to be moving fast enough. The programs are in place but not enough people are benefiting from them. Home owners desperate for help are calling their mortgage providers and are being stonewalled by “overwhelmed” lenders that can’t seem to cope with the volume of customers in need of help.
This situation has angered many because it is these same banks that don’t seem to be pulling their weight that were very happy to accept tax money in the bailout provided during the recent financial crisis.

There has been a lot of ink spilled on the issue of why banks seem to be dragging their feet on the issue of mortgages modification when it would seem that loan modifications are a win-win situation.

Some have suggested that only a specific group of troubled borrowers are actually profitable for banks when providing loan and mortgage modifications. The Obama Mortgage Plan administrators have obviously looked into the matter and published a list of the movers and slackers (they didn’t actually call it that) as part of a press release from the Treasury Department.

So what are the results?

Among the big boys the results in loan modification have been rather uneven.

JPMorgan Chase and GMAC are at the top of the class having started modifications on 20% of the eligible mortgages since the program started in March. The slackers among the top dogs of banking are Wells Fargo and the Bank of America with pathetic percentages of 6% and 4%. Obviously the instant picture these statistics show is oversimplified but it does seem clear that more can be done by big banks to pull their weight in the current crisis with the same “gusto” with which they accepted government handouts when their “house” was at risk of foreclosing.

To be fare JPMorgan Chase has since paid back his loans, but the same can’t be said for the rest. Other banks have fared even worse as is the case with Wachovia that only has a measly 2% of eligible mortgage modifications in processing.

So what can the government to promote loan modification by banks that seem to be dragging their heels? That may be one of the big questions that the Obama administration has yet to answer in order to dig out millions of families out of foreclosure.