Homeowners with loan mods now face rate increases

``Beginning this year, those whose loan terms were modified so that the interest rate dropped to as low as 2% will have to deal with higher rates that could, in some cases, drive the monthly payment as much as $1,724 higher. Why? Because "permanent" interest rate reductions under the government's Home Affordable Modification Program were anything but. Whether participants realize it or not, rate reductions last for only five years... And the number crunchers at Black Knight Financial Services point out that more than 40% of the 2 million borrowers who benefited from modified loan rates still owe more than their houses are worth. ''