FED PUTS PRESSURE ON MORTGAGE INDUSTRY

Fed Puts Pressure on Mortgage Industry

WASHINGTON (Associated Press) – Treasury Department officials yesterday announced plans to increase pressure on the 71 mortgage companies participating in the government's $75 billion loan modification program.

They will start this week by sending three-person "SWAT teams" to monitor the eight largest companies' work and requesting twice-daily reports on their progress. Next week, they will publish a list of the mortgage companies that are lagging.

The mortgage companies have had a hard time getting borrowers to complete the paperwork necessary to participate in the program. Nearly 60 percent of the 375,000 borrowers who qualify to have their loan modifications completed by year-end have either submitted incomplete paperwork or none at all.

The program, announced by President Obama last February, allows homeowners to have their mortgage interest rate reduced to as low as 2 percent for five years.