Treasury secretary Timothy Geithner is pressing mortgage servicers to expand their capacity and improve their loan modification efforts so the President's efforts to help struggling homeowners and stabilize the housing market will be successful.
In a letter to 25 servicers, the secretary notes that the industry has made a good start in extending loan modification offers to borrowers and in the number of trial modifications underway.
"However, much more progress is needed," he says. "There appears to be substantial variation among servicers in performance and borrower experience, as well as inconsistent results in converting trial modification offers into actual trial modifications."
The secretary also put servicers on notice that Treasury is planning to issue monthly reports starting August 4th that will show each servicer's performance, including the number of completed modifications and the long-term success of those modifications.
In addition, Freddie Mac's role as auditor will be expanded to take a "second look" at borrowers that have been denied modifications to make sure they have not been overlooked or "inadvertently denied a modification," the letter says.
Treasury secretary Geithner and HUD secretary Shaun Donovan plan to meet with servicers on July 28 to go over implementation issues and solicit suggestions for improving the President's Home Affordable Modification Program.