Foreclosures will continue to rise

No mortgage mods for many of the jobless
  
By Tami Luhby, senior
writer September 23, 2010: 12:11 PM ET

NEW YORK (CNNMoney.com) -- Unemployed homeowners cannot count jobless benefits as income when applying for mortgage modifications if they have loans backed by Fannie Mae. That could greatly limit their ability to get a long-term reduction in their monthly payments.
Because the jobless benefits can't be considered permanent income, the lender will instead evaluate troubled borrowers for forbearance plans of up to six months. The new guidelines, released Tuesday, will take effect Nov 1.  "We don't want to set up borrowers to fail, said Amy Bonitatibus, Fannie Mae spokeswoman. CLICK HERE for Full Article

Program to Modify Loans Loses Steam

Wall Street Journal Online discusses struggling loan modification program

By NICK TIMIRAOS

The Obama administration's loan-modification program appears to be running out of eligible borrowers who can qualify for restructured loans.
The number of homeowners who began government-sponsored loan-modifications in July grew by the slowest rate since the program began nearly 18 months ago and was dwarfed by the number of borrowers whose modifications were canceled.
Half of the 1.3 million modifications that have been extended to borrowers have been canceled since the program began, and around one-third, or around 422,000 borrowers, have received permanent loan modifications.
So far, the Home Affordable Modification Program, or HAMP, has helped hold back the shadow inventory of more than seven million loans that are delinquent or in some stage of foreclosure, which has helped home prices to stabilize over the past year.
In July, nearly 17,000 new trial modifications were started. More than five times as many borrowers saw their reduced-payment programs canceled, either because they failed to make payments, didn't provide necessary financial documents, or didn't meet qualification guidelines Click Here for Full Article