If you do not qualify for a loan modification than you can rent your home at market price, which can be no more than 31 percent of gross income for a family.

An incredible 18.8 millions homes were empty in the third quarter as banks seized properties from homeowners unable to make mortgage payments.

Under the Fannie Mae program, “You’re going to give owners a period of time to get their lives back together,’’ said Daniel Alpert, of Westwood Capital LLC, a New York investment bank.

This seems like a great idea. It gives homeowners additional time figure out if they can turn the corner and make their payments. The neighborhoods homes will not drop in value as a result of an empty home and the lender is not losing anything.

Mortgage payments are now being lowered faster than homes are being sold in foreclosure proceedings, according to Geithner, and roughly 40 percent of the 1.2 million homeowners deemed eligible have been helped.

“That’s an important shift,” Mr. Geithner went on. “Half a million families are participating in loan modifications that are substantially decreasing their housing costs.”

The general consensus is that while loan modifications save some homes, it will not end the foreclosure crises.

The same can be said for short sales and other options that will help many, but only a fraction of those in need.

The First Legal Group, which also operated as Nationwide Home Relief Law Group, is among those being investigated.

The company is said to have possible takent $750,000 from 200 homewoners in Connecticut and promised to lower mortgage payments but basically did no actual work.  Additionally, they were operating as an unlicensed law practice.

The other Florida loan modification lawyer firm being investigated is Housing Assistance Law Center, of Deerfield Beach.

The allegations of illegal activities basically consist of them telling clients lawyers would handle their work when they did not, collecting money in advance and not refunding money when the mortgage modifications did not go through.

Legitimate real estate lawyers do exist, of course and can help great with foreclosure related activities.

Many of these people took conservative, reasonable loans form conservative, reasonable lenders. Job loss can accept much of the blame, because without steady income payments that once seemed easy are now impossible. The reality is that until the unemployment rate improves foreclosure rates are not going to get any better.  A short sale or loan modification can help some people avoid foreclosure but the harsh truth is that without a job it is all delaying the reality of foreclosure.

In the next three years they are now estimating 3-5 millions homeowners could be assisted in total. The goal; avoid foreclosure!

This tell me a few things. First, some borrowers may be expecting too much. Second, Some of these firms were ill-prepared for the onslaught that was about to ensue.  Finally, it seems borrowers and lenders alike are finding this whole process just is not worth it.

Oh, but it is!?

It is certainly worth it for anyone who can avoid foreclosure. So an excercise in patients, especially for the agency chosen to assist in the process, is very much needed. Erroneous complaints by borrowers and faulty practices by a few are driving some of the best in the business to say ‘no thank you’.

Jason Vitulano is the owner of the four companies that solicited hundreds of distressed homeowners nationwide using ‘robo-calls’ that featured President Barack Obama’s voice.

The companies promised to work with lenders to reduce debt and prevent foreclosure but of course they did not actually plan on helping. The Florida Attorney General’s office received around 30 complaints in all.

Each violation warrants a $15,000 penalty.

As of August 15, 2009 distressed homeowners that have FHA loans may be able to refinance in order to avoid foreclosure.

The FHA mortgage modification program will work differently than the current loan modification program and will allow lenders to set aside up to 30 percent of the principal balance until the house is sold or the property is refinanced.

Lenders get a carrot too, as the FHA program will receive an incentive fee up to $1,250 and can get back $250 in costs.

Well over 200,000 borrowers in al lhave been aided in some form within the foreclosure resestent plan, which is expected to help 4 million people in all.  The Obama administration is hoping to more than double the current loan modification tallies by November of 2009.  Overall, 15 percent of borrowers have been offered a rate adjustment of some kind. Still, the fact remains that many of the banks and smaller companies expected to provide assistance are understaffed.

To be eligible, you have to be 60 days past due in foreclosure or bankruptcy that started before 2009.

The fact is that many loan modifications are hard to do and the whole process takes time. Paperwork is never easy or fast and this mortgage modification culture breeds lots of paperwork. Provisions are coninually being implemented to speed up the process but more needs to be done.

While some signs point towards stabalization in the mortgage market, I can’t help but believe it’s too early to truly tell.  However long it takes to get out of the mess, it will certainly exceed the amount of time it took to get into it.

The good part of it is the fact that there is not applications fees, no fixed monthly payments or out of pocket costs.

If you don’t process $5,000 or more then you can likely qualify for $2,500 loans.