The banking industry, however, uses a broader definition of loan modification that includes merely allowing late payments or lowering payments for a fixed period only.
Wells Fargo led the banking sector's voluntary Hope Now loan-modification program, launched in tandem with the Bush administration. Tuesday's Treasury report, however, showed Wells Fargo in an unfavorable light, noting that while the bank serviced 329,085 mortgages that were 60 days late, it extended offers to only 38,673 homeowners, or about 12 percent of those eligible, and started trial modifications with another 20,219 loans, about 6 percent of those who were eligible.
Moreover, the Hope Now numbers are misleading, as they include everything from forgiving late payments to rescheduling payments. In fact, Hope Now members put only 96,000 modifications into force in June. That's about 3.5 percent of the 2.7 million borrowers nationwide who're thought to be at least 60 days late on mortgage payments.
In a statement, Wells Fargo said that it had modified more than 240,000 mortgages in the first seven months of this year.
"More than 90 of every 100 Wells Fargo customers have remained current on their mortgage payments," the company said. "And, according to March 31, 2009, Inside Mortgage Finance data, Wells Fargo continues to have the lowest delinquency rate of the top four lenders in the nation. The modifications, which include changes in loan terms, interest rates and principal, were completed with the goal of creating sustainable mortgage payments for consumers facing financial difficulties."
CitiMortgage, part of troubled Citibank, which received $45 billion in taxpayer life-support, did a bit better, according to the Treasury report. CitiMortgage extended offers of modifications to 21 percent of eligible homeowners and provided trial modifications for 15 percent, the report says. JP Morgan Chase, which has emerged as the nation's strongest bank, extended offers to nearly one in three eligible homeowners and started trial modifications for one in five.
In a statement, the Financial Services Roundtable, which represents most of the nation's biggest financial institutions, offered a different set of numbers. It said the 26 members of its housing council had reported 310,000 workouts to homeowners in June alone and 1.5 million workouts in the first half of this year.
As many as 2.5 million homes may go into foreclosure this year, the result of a three-year crisis in housing that's seen prices tumble nationwide, and especially in states where prices soared in the first half of the decade: Florida, California, Arizona and Nevada.
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