Servicers Limit Participants in Loan Program
The Government Accountability Office on Thursday criticized the Obama Administration’s estimate that as many as 4 million people will be helped by the Treasury Department’s loan modification program.
The GAO says servicers representing 85 percent of eligible loans have signed up and only 50 percent of eligible borrowers are participating. As a result, many borrowers who believe they are eligible are complaining that they are unable to take advantage of the program.
The GAO recommended that the Treasury Department develop better procedures to ensure that loan servicers are both capable of carrying out the program and adhering to its rules.
The program allows eligible borrowers who are in default or at imminent risk to lower their monthly payments to no more than 31 percent of their pre-tax income by modifying their loans.
Source: CNNMoney.com, Tami Luhby
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