(San Diego, CA) President Obama’s Home Affordable Modification Program, which is designed to help homeowners modify the interest rate of their loan to make it more affordable, is suffering.

 The core issues concerning the program’s effectiveness are hotly debated. Many see it as a half-baked proposal that only forestalls the inevitable for distressed homeowners—losing the home to foreclosure—as the rate of unemployment shows no sign of decreasing.

Others believe that principle deferment is a way to fix the mortgage crisis, with the option to renegotiate the terms on the loan at a later date once market conditions improve for a less damaging compromise between lenders and borrowers. Joe D’Amato, President of Loan Modification Education 101 agrees. However, he attributes much of the frustration about loan modifications to homeowner participation and gathering the necessary documentation. “The only way to help the mortgage crisis and keep people in their homes is to modify using principle deferment, but communication failures and a strict reliance on processing paper is the bank’s Achilles heel.” About 99% of loan modifications fail due to lack of homeowner participation and follow-up.

Loan Modification Education 101 has developed web-based software to specifically address these two major problems. “Some of the unique aspects of the tool are its organizational tracking features that allow the homeowner to drive the loan modification process independently,” said D’Amato. According to industry publication Mortgage Insider, 71% [of applicants] to JP Morgan Chase who make trial mod payments, 51% don’t submit all the needed paperwork or submit documents that are incomplete. The software does this crucial groundwork for the servicer and lets the homeowner focus on compiling and organizing the right information for the servicer to use thereby facilitating the process. The software is replete with downloadable government forms that are constantly updated, a direct link to a property valuation website that automatically populates comparable sales, templates for creating a hardship letter and other crucial organizational financial worksheets that help the homeowner qualify for a loan modification.

President Joe D’Amato explained, “We understand this is not panacea for the mortgage crisis, but according to our belief the first steps a home owner must take to save their home is through loan modification. Short sales and other alternatives should be considered only if the borrower sees no hope at stabilizing finances or recuperating lost income.”