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Rise in homeowners receiving mortgage modifications

In an effort to try and help homeowners avoid foreclosure, the government created the Home Affordable Modification Program. And while the actually number of people helped has not hit anywhere near the targeted goal of 3 to 4 million, the number of homeowners who qualified for a permanent mortgage modification did increase by nearly 16,000 between July and August.

The increase in the number of permanent mortgage modifications was released by the U.S. Treasury Department just last week. Since 2009 when the program started, close to 691,000 homeowners have received a modification.

And while an increase in help being given to homeowners is always a positive, many say that more mortgage relief tactics are still needed, and criticize the federal government's program.

When looking at some of the problems with the program, sources point to the fact that to help homeowners it required changes to the lending industry, which was already struggling and troubled. This combined with the sheer size and scale of the housing crisis only made it even harder for lenders to be able to keep up.

However, even though the number is still nowhere near the initial goal of 3 to 4 million, keep in mind that while there is the government's Home Affordable Modification Program; individual institutions may also have their own modification process. For some homeowners, it may be better to actually look into both types of programs.

Overall, it's also important to remember that the mortgage modification process can be quite complex and confusing, and requires a lot of paperwork, like a hardship letter and an itemized list of monthly expenses.

If you are a homeowner who is interested in learning more about the modification process -- or needs help compiling necessary documentation -- contact a professional to make sure that all of your facts are there, and to make sure that a modification is truly the best solution for you to avoid foreclosure.

Source: The Wall Street Journal, "Numbers Up, But Mortgage-Relief Effort Still Falters," Alan Zibel, Oct. 6, 2011

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