So far, two months after the program went into effect, about 55,000 homeowners have been extended loan modification offers, according to a senior administration official. At the same time, foreclosures continue apace. RealtyTrac reported Wednesday that foreclosure filings reached 342,000 last month, up 32 percent from April 2008. Moody’s has estimated that more than 2.1 million homeowners will lose their homes this year.

Because of the size and complexity of the modification program, the administration has only recently assembled most of the pieces. In late April, officials fleshed out their plan to modify or forgive second mortgages — one of the big stumbling blocks in modifying primary mortgages — and provided more details on the Hope for Homeowners program, for borrowers who owe more than their homes are worth. Congress is close to acting on legislation to protect mortgage servicers from potential lawsuits from investors, while also expanding the Federal Housing Administration’s ability to modify loans.

Read more from the Times

The first piece of evidence supporting their claim is that in their sample, among comparable mortgages, loan modifications appear to be equally common among loans held “in portfolio” and loans that are securitized. When banks hold loans in portfolio then property rights reside squarely with the bank and there can be no contracting difficulties. If bondholder suits were really restricting the modification of securitized loans, then there should be fewer modifications of such loans, but the rate of modification is roughly the same.

Notices of Default, the first stage in foreclosure, fell by 18% in April from March. There were 42,675 Notice of Default (NOD) filings last month. NOD’s are filed when a borrower has missed several payments. If some kind of agreement is not reached between the borrower and lender over the default, the home is then put up for auction, typically for the amount of the outstanding mortgage. 

Read more from LA LAND

The injunction — which mortgage experts said appeared to be the nation’s first court-ordered stop for an entire state — prevents judges in South Carolina from finalizing foreclosure sales on properties guaranteed by Freddie Mac, Fannie Mae or any other mortgage company that has signed on to a federal assistance program.

RealtyTrac Inc., a foreclosure listing firm, says the ruling could affect 5,000 South Carolina homes facing foreclosure.

Read more from the AP

Not necessarily.

Some homeowners are finding that when they sell their homes for less than the outstanding mortgages — a so-called short sale — their mortgage companies are going after them for some or all of the difference. Mortgage companies are also sometimes taking legal action to recover unpaid amounts after a foreclosure is completed.

In a growing number of cases, holders of mortgages or home-equity loans are requiring borrowers in short sales to sign a promissory note, which is a written promise to pay back a loan or debt. Real-estate agents and attorneys say they have seen an increase in requests for promissory notes as mortgage companies look to short sales as an alternative to foreclosure.

Read more from WSJ

Legislation to give bankruptcy judges the power to reduce home mortgage debt–by “cramming down” the principal–doesn’t appear to have enough votes and will be stripped out of a broader housing bill in the Senate.

The cram-down effort is a major plank of President Barack Obama’s housing rescue, which also offers financial incentives to mortgage servicers to modify loans and allows some homeowners with little to no equity to refinance.

The cram-down measure already passed the House of Representatives as part of the housing rescue. But it faced heavy opposition from the banking industry, and there were signals last week that Senate leaders might discard the measure from the housing bill.

Read more from the WSJ

The Association of Community Organizations for Reform Now, or ACORN, continues to stage protest rallies in front of the company’s West Palm Beach headquarters, demanding foreclosure freezes and a hold on evictions while more liberal loan modification are worked out.

But Ocwen claims it runs one of the most efficient and innovative loan servicing companies in the country and got in on the front end of the foreclosure problem before it ballooned into a crisis that tipped the economy into recession.

So far, Ocwen claims to have saved some 90,000 homes from foreclosure and boasts one of the lowest redefault rates of any servicer in the country, meaning that after a modification, more of the loans it manages stay current. It also claims to be able to finish the loan modification process in about 21 days.

Read more from the Miami Herald

The program, unveiled last month, allows at-risk borrowers to reduce their monthly mortgage payments in an effort to keep them from losing their homes. It creates a $75 billion loan modification program that would allow “responsible homeowners” to refinance to interest rates as low as 2 percent.

“We were well positioned for a vigorous launch of this new government program. Since the outset of the mortgage crisis, we have increased key staffing by over 65 percent,” Ocwen Chairman William C. Erbey said in a news release. “Our modification processes required very little tweaking to comply with program guidelines.”

For a loan modification, lenders would have to reduce the mortgage payments to no more than 38 percent of the borrower’s income. The Treasury Department would share the cost for lenders to cut that debt-to-income ratio to 31 percent.

Loans could be extended to up to 40 years.

Read more from the Bizjournals