The Obama administration's Making Home Affordable loan modification program will not show real results until later this summer, according to a key regulator.
Federal Housing Finance Agency director James Lockhart told a Congressional panel the impact of the MHA program will be delayed as the servicers register for the program and contractually agree to the program's terms and conditions.
"Second, borrowers are required to submit the required documentation, be approved for a modification, and successfully perform under a three-month trial modification before the loans can be formally modified. Therefore, FHFA expects to see the results of current activities ramp up in late summer," Mr. Lockhart testified.
Separately, Herbert Allison, President Obama's nominee to be Treasury assistant secretary and run the Troubled Asset Relief Program, told the Senate Banking Committee that 14 servicers are already active in the MHA program and they have sent modification offers to 100,000 homeowners. TARP is providing funds for incentive payments and to cover some of the modification costs.
"There is a great deal of pressure on everyone" to get this program going, Mr. Allison said at his confirmation hearing. But he stressed it going to take time to ramp up. Mr. Allison recently served as president and chief executive of Fannie Mae.