The last week of July was full of news reports of how miserable the results of the U.S. Make Home Affordable Plan have been. I'd like to explain all of that.

There are actually three different pieces of U. S. Congressional action that deal with the mortgage economic mess:

• July 30, 2008 “Hope For Homeowners” was passed by the US Congress.

• March 4, 2009 the US Treasury issued Uniform Guidance for President Obama's “Making Home Affordable” plan which is the administration's stimulus strategy to get the housing market corrected.

• May 20, 2009 President Obama signed the “Helping Families Save Their Homes Act,” and the “Fraud Enforcement and Recovery Act” (FERA).

There are four ways to attempt a mortgage modification:

1. The homeowner can attempt it themselves. Statistically, the success rate is 20% for a homeowner attempting their own loan modification. They typically take 8-9 months. 40% of homeowner negotiated loan modifications have resulted in higher monthly payments. 80% of homeowner loan modifications have gone back into default. The first modification offer from the lender is not necessarily the best for the homeowner. It's usually the best for the lender. Many are being rescinded because the lender has determined they're not in their best interest. (Half of the loan modifications we negotiate are from homeowners who previously attempted their own modification.)

2. The federal government has touted their free HUD-approved counselors. As of April 16, both CNN.com and PBS TV reported that the US government had processed one (count 'em, one) single mortgage loan modification. The first week of August, PBS again ran interviews with a few of these counselors describing how hard it was to get modifications accomplished. They're subject to the same runaround as individual homeowners and investors. To make it worse, lenders are issuing three-month trial modifications and rescinding even successful modifications for no apparent reason, other than the lender decided they didn't like the initial terms. This will become an increasingly popular news item in the coming months. It's going to get worse.

3. There are investors specializing in loan modifications. Published results indicate that investors with the right intentions, know what they're doing, and work hard at it may be 50-60% successful at completing loan modifications.

This is the group that has gotten so much bad press since last March, however. Almost every one of the legal prosecutions of nefarious loan modification companies have come from this group. Any news that refers to the Federal Trade Commission or the Better Business Bureau, or even a state's Attorney General come from this group. There are many well-meaning retail modifiers out there; but the few that are idiots or crooks get way too much attention because of their ineptness.

4. Attorney groups are generally 90% successful at completing loan modifications. There are two kinds of attorney groups:

Attorneys licensed in any single state are supervised by that state's Attorney General. The attorneys indicted by the California Attorney General are in this group.

US attorneys licensed in multiple states are monitored and supervised by the US Dept. of Justice. These are generally 95% successful. Please note that not one single attorney from this group is in trouble with the USDoJ. They wouldn't dare. They are incredibly proud of their 95% success rate. They would not welcome a visit from a USDoJ representative.

It's important to note that the Better Business Bureau or the Federal Trade Commission have no jurisdiction over any attorney.

(Next week: How this information benefits the individual property owner, and more details conveniently omitted from cursory media reporting.)

Chris Dix writes and publishes his blog on Mortgage Modifications at www.Mortgage-Mod-Monster.com. He also publishes www.Mortgage-Monster.com/grand-junction, a website that covers economic and employment as well as mortgage opportunities on Colorado's Western Slope. Locally, he can be reached at 242-2600.