A group of state attorneys general and banking regulators put together to address the mortgage foreclosure crisis issued their second report today. Iowa Attorney General Tom Miller, one of the leaders of the "State Foreclosure Prevention Working Group," says they’ve made some progress.
Miller says loan mitigation efforts are up, and most significantly, the number of loan modifications are up. Miller says in most of the loans there has to be some modification of the interest rate, or the duration of the loan term.
While there is progress, Miller says they’ve yet to make a major dent in the problem. He says the bad news is they started behind in the process in October, with only three of ten loans that were in 60 days or more in default in the loan modification process. Miller says that number remains the same now, about 24 or 25 percent.
Miller says while efforts to mitigate troubled loans have increased, the number of loans that need work have increased proportionately. "We’re still way behind, and a lot has to be done, even given the efforts that have been made between now and back in October," he says. Miller says the effort to mitigate loans and keep homes from being foreclosed have to increase.
"I think that what needs to be done is increasing staff level at the servicing companies, increased willingness to agree to modify terms, continued outreach to reach borrowers by the companies, by the non-profit groups, by our two organizations, bank regulators), and then finally more systematic modifications, automatic modifications," Miller explains.
Miller says developing a more systematic approach would streamline the process in modifying loans and help speed up the process. To see the groups entire report, visit the Iowa Attorney General’s website .