Last week, there was a tumble in the stock market regarding news where housing delinquencies and foreclosures had risen again within the very first quarter.

However, the office of the comptroller has also stated that among this gloom, there also happens to be promising information regarding loan modifications. It just so happens that they have risen by more than fifty percent that quarter. This growth had come on the lowest base, naturally; however, this move encouraged the office of the comptroller.

While the program of the administration to make homes affordable has gained traction, as well as helped offset the overall impact of such a hard cycle in the economy, progress should keep coming within future reports.

A glimpse into the mortgage information of the second quarter, however, seems to indicate that this progress that is being hoped for could take much longer to come out. This has raised questions regarding whether banks and policymakers are actually moving intelligently or quickly enough with this problem on foreclosure.

Foreclosures are still a great financial ill within today’s economy. The administration of former president Bush significantly overlooked foreclosures that affected regular homeowners, concentrated instead on the prop-ups of the elite, as well as financial institutions that were troubled and had taxpayer funds.

The administration of current president Obama has stated its wish to fight the issue of foreclosure down into the ground through the encouragement of loan modifications on mortgage. However, its efforts only received a bit of traction.

Loan modifications tend to happen when lenders agree to alter the terms of mortgages of troubled borrowers. The most obvious approach would be to lessen the interest rate of the loan. Cutting down the number of the owed principal, which is an option which could help borrowers much more, tends to be rare since this would mean that homeowners pay less back to their bank as time goes by.

However, lenders along with their representatives do not like modifying loans via principal reductions or cuts in interest rates since, naturally, it would reduce the income that they get from their borrowers. There is no surprise here, then, that modifications on loans have become a trickle amidst this current flood of foreclosure.

Here is where the government comes in along with their announced program in March in encouraging modifications. It provides incentives to servicers of loans to alter terms of mortgage, offering a thousand dollars for every modified loan. The program concentrates on making these payments much more affordable via lower rates of interest; however, late fees and delinquent amounts are usually tacked onto mortgage balances. The program in making homes affordable does not force lenders into reducing the balances of mortgage.

Servicers have signed onto this program in the month of April. The early months of the program have not been covered by the first-quarter report of the O.C.C. However, other figures related to modifications that have been conducted from April to June do exist. Plus, they are showing declines within modifications instead of increases as the government had hoped.