The Obama administration and the US Treasury dept are vowing to pressure the mortgage industry to administer more loan modifications as permanently modified mortgages have not kept up with the number of troubled households owning homes. While 14% of homeowners with a mortgage are facing foreclosure, only about 2% of homes applying for modifications have been approved.

The mortgage loan modifications were supposed to reduce the mortgage interest rate thus providing a lower payment for three months. At the same time borrowers were to provide financial documents to include an explanation of hardship. Banking officials are responding that many homes placed in a temporary plan failed to make timely payments for the temporary period or simply failed to provide paperwork. Lights of a recovering real estate market could be dimmed if the foreclosure crisis isn’t contained before another wave of adjustable rate mortgages reset in the new year.