The housing market is unstable at the moment due to home values dropping significantly in the last 2 months. There have only been 28,000 homeowners who have received permanent loan modifications for the month of September. There are over 4.4 million borrowers who are 90 days or more delinquent with their mortgage and have not gone into foreclosure. There have been a total of $500,000.00 borrowers who have received loan modifications by the Treasury Program. However, there were a total of $700,000.000 borrowers who tried for a loan modification and were denied a loan modification. As of September, 2010, there were $35,000.00 homeowners who applied for a loan modification and were placed into a Forbearance program where they have to make Trial payments prior to be considered for a permanent loan modification.
A senior Economist named Paul Willen expressed that banks are more in favor of foreclosures because they view loan modifications as being costly and unsuccessful. His alternative solution to this problem was that the lenders should be responsible for the cost of the loan modifications, and that it should be mandatory for banks to approve loan modification for borrowers who are in distressed financial situations. His other solution was that "tax payers" be the ones who pay for the loan modifications . Therefore, it would reduce the amount of homeowners who have to begin the foreclosure process.
