Foreclosure Wave Feared as Mortgage Aid Lags Behind Goal

[debbierlus]

WASHINGTON - Just over 31,000 homeowners have received permanent loan modifications since March under the Obama administration’s mortgage relief plan, spotlighting some of the program’s failures.

Among big lenders, Bank of America Corp. had the worst results. The nation’s largest lender had completed 98 modifications for the 160,000 borrowers who had signed up by the end of November. GMAC Mortgage had the most of any lender, with just 7,100.

The weak results mean the Obama administration is not going to hit its long-term target of helping 3 to 4 million borrowers with modified loans, said Ted Gayer, an economist at the Brookings Institution.

The more borrowers the program can’t reach, the more foreclosed homes will spill onto the market, pulling down home prices. Almost 14 percent of homeowners with a mortgage are either behind or in foreclosure.

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