Bank of America this week reported that it quadrupled the number of modified mortgages for its customers in the past month alone.
The number of mortgages modified through the federal government's Home Affordable Modification Program jumped to 12,700 from 3,200 a month earlier. Another 13,700 modifications are pending. The program was designed to lower mortgage payments to help Americans keep their homes.
Some analysts tell Collections & Credit Risk that many borrowers fall behind again after receiving a loan modification, including with a mortgage, and that there is doubt about the effectiveness of concessions, Economic Downturn Leads To New Collection Strategies, Feb. 17.
A temporary reduction in the minimum monthly payment for a borrower who is trying to secure a mortgage modification, for example, may help the borrower stay current for a time, but without an improvement in the overall employment picture, any given borrower’s financial situation is unlikely to change.