Although there are no national numbers on how many people are being scammed – many people are too embarrassed to report they got taken – there are probably hundreds of thousands of victims, Ms. Fitzgerald says.
The problem will get worse this year, she anticipates, because so many adjustable-rate mortgages (ARMs) are coming up for renewal – especially in California, Florida, Arizona, and Nevada. Particularly problematic could be option ARMs, in which the homeowner decides how much money he or she can afford to pay each month.
“Your ability to pick the amount you can afford to pay is definitely becoming much harder, and the monthly payments on the vast majority of these mortgages are going up,” Fitzgerald says.
At the same time, the number of loan modifications made by the companies servicing mortgage payments remains relatively small but growing.
As of the end of January, 116,000 permanent loan modifications had made since last February, when the Obama administration unveiled its Making Home Affordable Program, according to the US Treasury on Wednesday. The Obama program provides incentives to lenders to modify mortgages.
The 116,000 figure is double the number in December. In addition, 76,000 homeowners have been offered permanent loan modifications but have not signed the paperwork yet.
However, many more mortgage problems persist. As of September 2009, the Mortgage Bankers Association reported, 5.8 million mortgages were at least 60 days delinquent. This includes homes that have entered the foreclosure process.