The Obama administration plans to ride herd on mortgage modifications

Now that it's finally obvious to the Obama administration that the banks are dragging their feet on loan modifications, the White House is appointing officials to monitor the actions of the largest mortgage servicing companies on a daily basis. The administration also announced that it's requiring mortgage companies to develop and report plans to increase the number of completed modifications, and that it wouldn't make incentive payments to mortgage servicers that don't convert trial modifications into permanent ones.

Even though more than 650,000 borrowers have applied under Obama's Homes Affordable Modification Program and obtained trial modifications, few have actually received completed, permanent modifications. No one knows how many modifications have been completed because the administration refuses to release any data until December. But some mortgage executives expect only about 25% to 35% of those who apply to get them.