Trial mortgage-loan modifications fell in July

Lenders have permanently modified the mortgages of 18,409 metropolitan Phoenix homeowners through the federal government's program to help people avoid foreclosure. That's the tally so far for the Making Home Affordable Program, launched in spring 2009.

Permanent loan modifications in metro Phoenix have climbed 2,000 to 3,000 for each of the past few months. Foreclosures in the region have climbed at least 4,000 a month so far this year.

What changed in July was that the number of trial mortgage modifications fell significantly. At the end of July, there were 9,735 trial modifications under way in the region, down from 17,000 at the end of May. To get permanent modifications, most homeowners must do a trial payment period.

For too many struggling borrowers, trial loan modifications came too late. For other homeowners, the trial period lasted too long. And others who were initially approved and making trial loan payments are now finding out they aren't eligible for permanent modifications.

The most common causes of trial loan-modification cancellations are insufficient documentation, missed payments and mortgage payments that are already less than 31 percent of a homeowner's income, the federal government reports.

• Foreclosure pets: A group of metro Phoenix real-estate agents has formed the Lost Our Home Pet Foundation to rescue pets abandoned because of foreclosure or eviction.

"We know that in order for us to help the vast numbers of pets in need, we also need to help pet owners by providing a variety of immediate, convenient and available services," said Jodi Polanski, founder of Lost Our Home, which operates a pet-food bank for people who no longer can afford to feed their animals.

The non-profit also has a temporary-placement foster program for people who want their pets back after they find a new home and rescue services specifically for pets abandoned in foreclosure homes.

Lost Our Home is trying to raise money to operate a no-kill shelter for pets left homeless because of foreclosure. The group is trying to win a Pepsi Refresh Project grant.

by Catherine Reagor The Arizona Republic Aug. 25, 2010 12:00 AM



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Trial mortgage-loan modifications fell in July