Most lenders have loan modification programs in place.  Customers in trouble should be ecstatic.  Foreclosures should be on the decline — right?

Doug Jones, a San Jose mortgage broker, said on a California Money Report radio cast that most banks already have loan modification programs, but without much success.  “I think that most people who try to modify really put their head against the wall –  they’re not getting a lot of success… There’s a lot of paperwork, there’s a lot of lost papers, a lot of time delay.  I see people call up the lender and the lender says I can’t talk to you until you’re 90 day’s past due,” said Jones.

According to Jones, lenders are overwhelmed and although they have the programs in place they don’t have the systems to support those programs.  Worse, the rules are changing every week.  Like bread lines in the 30’s, customers are queued up in long somber lines waiting for help.

Having a program in place to modify loans doesn’t mean loans are getting modified.  Lender announcements and the best intentioned promises to consumer borrowers and the government seemingly mean very little.   In the end, without the right systems in place, the lines will continue.