The Office of the Comptroller of the Currency and the Office of Thrift Supervision want to uncover the truth about voluntary loan modifications during 2008.
The offices will collect mortgage performance data from the largest national banks and thrifts and will review loan modifications which:
- increased borrowers' monthly principal and interest payments
- brought no change to homeowners' payments
- reduced the payment by 10 percent or less
- reduced the payment by 10 percent or more
Their findings will be released this month in "OCC/OTS Mortgage Metrics. It's a relief to know that these numbers will finally be examined closely to reveal how voluntary mortgage modifications have truly helped or not helped homeowners avoid foreclosure in the long-term. One of the problems we have noticed is that many homeowners facing foreclosure receive inappropriate mortgage modifications that do not help them avoid foreclosure. This is why we believe that giving bankruptcy courts the power to modify toxic mortgages will force lenders to deal fairly with homeowners facing foreclosure.