But to qualify for the permanent modifications, borrowers have to document economic hardship, demonstrate a certain debt-to-income ratio and prove that they live in the home -- a threshold that many homeowners have not been able to meet.
Even after modification, 64percentt of the median permanent modification borrower's income goes to servicing debts, including mortgage, automobile, and credit card payments (this number was 80percentt before modification).
Planned communities tend to be, at best, dormitory neighbourhoods and shopping malls, and at worst, empty, economically dysfunctional accumulations of capital; permanent hotels for borrowers with ever larger mortgages.
They are given temporary modifications, which are supposed to become permanent after the borrowers make three payments on time and complete necessary paperwork, including proof of income and a hardship letter.
For most of two decades, Fannie and Freddie got rich taking fees up front to guarantee and securitize mortgages, and took relatively few defaults until the Great Recession, when the roof caved in and defaults skyrocketed in the perfect storm of weak borrower credit, poorly structured loans, and terrible permanent job losses for borrowers that caused them to lose their incomes and default.
Treasury data shows that the median savings for borrowers receiving permanent modifications is $512 a month.
Borrowers with permanent modifications save a median of $500 a month, the government says.
Only 28,000 defaulting borrowers received permanent loan modifications in September, the Treasury Department said.
Median debt payment in April for borrowers with permanent modifications was 64 percent of their gross income, up from 61 percent in March.
The pressure is on private lenders to offer struggling borrowers more permanent relief.
