The U.S. Treasury report shows that Colorado, at the end of October, ranked No. 20th in the nation for the number of homeowners participating.

California is No. 1, with 134,609 people in the  Making Home Affordable Program . Other states with a large number of participants include: Florida, 62,614; Arizona, 34,424;  Illinois, 33,514; New York, 28,773; Michigan, 22,031; and Nevada, 17,566. At the other end of the spectrum,  North Dakota only has 17o modifications in the works.

Nationally, about 650,000 homeowners are in the trial program, but only a small percentage of them have had their loans modified permanently, which is something the Obama Administration wants to remedy.

“That is really interesting,” said Ryan McMaken, spokesman for the Colorado Division of Housing, when contacted with the Colorado data by InsideRealEstateNews.com.

“My initial reaction is that states with higher unemployment, which have seen a greater decline in home values, the loan modification programs are more necessary,” McMaken said. “Homeowners in Colorado clearly have more options than people in many other states. In Colorado, there are still a lot of people willing to buy homes and a lot of investors willing to pay for them.”

He said it is possible that fewer modifications are being done in Colorado, “but they are sticking better,” than in other states.

Still, loan modifications are not for everyone, especially with the recent wave of distressed homeowners who have lost their jobs, he said.

“If  you have no income, and you cannot repay your loans at any rate, you might have to do a short sale,” McMaken said. “And as a note of caution, housing counselors will tell you that not all loan-modification programs are created equal.  Counselors have told some homeowners not to accept the loan-modification program offered.  Some loan mods are inappropriate for some individuals, while other loan-mods are very appropriate. You have to look at them on an individual basis. Can you imagine the psychological damage to someone who can’t make their payments, even after jumping through all the hoops to get their loan modified.”

Peter Garvin, of Borrowers First Choice, a division of Cherry Creek Mortgage, said given Colorado’s foreclosure rate, he would have expected the number of people to be in loan modification programs to be higher.

“I think we’re No. 9 in the foreclosure rate, according to the last numbers I recall, so I guess my take is given our foreclosure rate, you would think we would be some place around No. 9 for loan modifications,” Garvin said.

“I don’t know what the answer,” why more homeowners in Colorado aren’t enrolled in loan-modification program, he said.

However,  it can often take  as long as nine months for a homeowner to get enrolled into a program, he said.  “So maybe we have a boat-load of modifications that have not been showing up yet,” Garvin said.

Although there have been criticisms by some political and industry leaders that the program is not helping enough Americans, Treasury Assistant Sec. Michael S.  Barr today said the program is working.

“Struggling homeowners in every state now benefit from reduced monthly mortgage payments and have an opportunity to stay in their homes,” Barr said.  “The program is having a pronounced impact in areas particularly hard hit by the housing crisis. We’re reaching borrowers at a larger scale than any other modification program to date, but there is still much more work to be done.”

Article by: John Rebchook   www.InsideRealEstatenews.com