Bucking the mortgage modification trends

Mortgage modifications are supposed to be a win-win situation. Homeowners lower their monthly payments and get to keep their homes. Mortgage lenders, minimize loss by allowing the homeowner to hold onto their property than they would if the property went into foreclosure. The community benefits because instead of an empty property, they have neighbors. According to a new report from the Boston Federal Reserve Bank, lenders aren’t buying it. At least one bank, First Federal Bank of California, is.

Just released figures for May 2009 indicate that First Federal Bank of California, a subsidiary of FirstFed Financial Corp., has modified nearly $1 billion worth of home mortgages enabling more than 2,000 California families to avoid foreclosure. Perhaps more significantly 81 percent of homeowners whose mortgage have been modified by the bank are current on their monthly payments.