According to data from the Office of the Comptroller of the Currency and the Office of Thrift Supervision, mortgage servicers made 185,156 loan modifications during the first quarter of the year, up 55 percent from the prior quarter.  This said, it leaves one to wonder about President Obama’s Making Home Affordable program that was supposed to assist millions of homeowners with their mortgages.  Why is is that so few modifications have been completed when so many are facing foreclosure?

It could be said that many homeowner’s whose property values have diminished to “underwater” status are simply letting their homes go.  The principal balance reductions that were talked about are simply just not happening.  Homeowner’s are then faced with the idea of paying more for their homes than they are worth.  Many homeowner’s are discouraged, and walk away.

The loan modification process is a slow and tedious process with most lenders.  The requests for more and more documentation, coupled with the disorganization on the lender’s behalf is tiresome.  Many homeowner’s then find themselves ineligible for assistance, and back to square on, oftentimes further behind than they started.  It’s a long and lonely path towards foreclosure, leaving one feeling helpless and ill dissolutioned.

To add fuel to the fire, many homeowner’s who have recevied a loan modification, have since defaulted again, discouraging lenders from providing assistance.  Loan modifications that were simply bandaids, and not truly beneficial to the borrower, are only a temporary document on an otherwise bad loan.  Once you default, you’re back to square one with the high interest rate jumping back into play and giving little hope to homeowner’s of recovery.