The Obama administration has held a series of meetings in Washington with mortgage providers to encourage them to accelerate the pace of their loan re-structuring programmes which is a key part of the government's plan to boost the property markets.
It believes that if more property owners can be helped then the pace of re-possession will slow and property prices will stablise. It is estimated that three to four million property owners could be helped.
But so far it is not happy with the reaction from loan providers. 'If lenders and loan servicers don't pick up the pace of modifications dramatically, Congress is poised to force them to do so,' said a government spokesman.
Officials are angry that the biggest 25 loan providers, including Bank of America, Wells Fargo and Citigroup, are not keeping to their promises to increase the pace of their loan restructurings under the administration's Home Affordable Modification Program.
The original goal of having at least 500,000 trial modifications underway by the beginning of November is way behind schedule. So far only about 200,000 modifications have actually been put into place.
Some parts of the industry confirmed that things will speed up. A joint statement from the Mortgage Bankers Association, the Financial Services Roundtable and the Housing Policy Council said their members are 'committed to helping at-risk borrowers with workout solutions to help avoid foreclosures.'
But not everyone is convinced. Some Politians want the government to force them into keeping their promises. Illinois Democratic Senator Dick Durbin said a voluntary system is not working and he wants bankruptcy court judges to be given the power to impose involuntary modifications on lenders, including slashing principal balances of delinquent borrowers.
