Loan Modifications....Are they working?

According to: Associated Press, Alan Zibel (12/10/2009)

Only about 4 percent of the home owners who signed up for loan modifications-fewer than 31,000-had received them by the end of November, according to figures released Thursday by the U.S. Treasury Department.

Of the largest lenders, Bank of America Corp. had the worst results. It completed a total of 98 modifications. With 7,100, GMAC Mortgage completed the most.

Lenders have blamed their lack of success in part on the failure of borrowers to complete the paperwork necessary for the process.

The government says it will expedite its efforts to push through as many modifications as possible.

I have heard from a few people that their loans have been approved for modification, BUT the loan payment is more than the existing loan payment. In one case, $700 more than the homeowners current payment.

My theory is that the lenders are doing what the government asked them to do - give loan modifications....just not a loan mod a homeowner would want. Hence a win-win for the lender.