Editor's note: This is the last part of a series documenting the struggles of homeowners seeking a mortgage-rate modification. Part 1 reviewed how homeowners have been stranded, and part 2 exposed the opportunists taking advantage of the broken system.
"We've had people who met guidelines through and through," says Charles Favor, a mortgage modification specialist with HLP Center. "They fall right into the category of every criteria that's out there and the banks are just not helping people. They string them along through the loss-mitigation department and the attorneys don't even know they've foreclosed upon the house." Additionally, the number of people assisted by banks pales in comparison to the number who defaulted or walked away from their homes. While it's difficult to gauge the precise number of homeowners who fall into the category of "troubled," somewhere between 3% and 5% of U.S. households are delinquent on mortgage payments, according to quarterly reports from major banks, Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB). That implies 3.4 million to 5.2 million households are now at risk of default or foreclosure, on top of the millions who have already faced the same fate. Big banks realize that the mortgage malaise won't stop spreading throughout their loan books until barrier walls are erected. They've started providing better workout solutions than those offered by the federal government, because banks have more flexibility to tailor modifications to individual borrowers' needs. The question now is whether progress has come too late. .pollD {font-family: Arial; color: #FFFFFF; font-size: 14px; font-weight: bold;} .pollQ {font-family: Arial; color: #660000; font-size: 14px; font-weight: bold; font-style: italic;} .pollO {font-family: Arial; color: #6a6a6a; font-size: 12px;} .btn {border-style: outset; border-width: 1px;} If you've had difficulty getting a mortgage rate modification, what was the main sticking point? function submitSurveyRadio(form) { var answerId = ""; if (form.questionAnswer_41059[0].checked) { answerId = form.questionAnswer_41059[0].value; } if (form.questionAnswer_41059[1].checked) { answerId = form.questionAnswer_41059[1].value; } if (form.questionAnswer_41059[2].checked) { answerId = form.questionAnswer_41059[2].value; } if (form.questionAnswer_41059[3].checked) { answerId = form.questionAnswer_41059[3].value; } if (answerId == "") { alert("Please select an answer for this question."); return false; } else { var url = "http://apps.thestreet.com/survey/templates/tscGenericPopupPoll.do?surveyId=41057&questionType_41059=0&qid=41059&questionCount=1&lastQuestionCount=1&productId=-999999999&questionAnswer_41059=" + answerId + "&questionIdsOnPage=" + form.questionIdsOnPage.value; var submitWin = window.open(url,'previewPopUp','width=543,height=350,scrollbars=yes,left=0,top=0'); submitWin.focus(); } } function submitSurveyList(form) { if (form.questionAnswer_41059.selectedIndex == "" || form.questionAnswer_41059.selectedIndex == null) { alert("Please select an answer for this question."); return false; } else { var url = "http://apps.thestreet.com/survey/templates/tscGenericPopupPoll.do?surveyId=41057&questionType_41059=0&qid=41059&questionCount=1&lastQuestionCount=1&productId=-999999999&questionAnswer_41059=" + form.questionAnswer_41059.value + "&questionIdsOnPage=" + form.questionIdsOnPage.value; var submitWin = window.open(url,'previewPopUp','width=543,height=350,scrollbars=yes,left=0,top=0'); submitWin.focus(); } } Paperwork confusionBank was unhelpful or slow in processing materialIncome was too high to qualify for the federal program Underwater loan made things tough with servicer and/or government Add Comment Tweet 1 2 3 4 Last » Next › var OutbrainPermaLink='http://www.thestreet.com/story/10835772/mortgage-mayhem-banks-doing-too-little-too-late.html'; var OB_Template = "thestreetcom"; var OB_demoMode = false; var OBITm = "1276003897985"; var OB_langJS ='http://widgets.outbrain.com/lang_en.js'; if ( typeof(OB_Script)!='undefined' ) OutbrainStart(); else { var OB_Script = true; var str = ''; document.write(str); } adsonar_placementId=1341527;adsonar_pid=879768;adsonar_ps=-1;adsonar_zw=600;adsonar_zh=280;adsonar_jv='ads.adsonar.com'; Featured Photo Galleries var galljs = document.createElement('script'); galljs.src = 'http://js.thestreet-static.com/files/tsc/v2008/js/_1282260120200/min/pages/gallery.js'; var head = document.getElementsByTagName('head')[0]; head.appendChild(galljs); Go to Slideshow Archive Business News From The Web HP, Dell Report Forbes.com: Business News Hotel Occupancy Rate: Almost back to 2008 levels Calculated Risk European Stocks Drop as Carmakers Offset Dana Petroleum Rally BusinessWeek Online Google vs. Facebook on Places The Wall Street Journal. 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