On the House: To modify mortgage: Persist!

Theodore Frimet of Croydon describes himself as an "unemployed clerk trying to save his home."

After several months of working on his own with his lender to modify his mortgage, he even has had "a vision of success."

It's not that Frimet hasn't hit potholes in what, for just about everyone, is a long road toward modification. He believes, however, that delays are not totally the fault of the servicers. Instead, he says, "it is [the U.S.] Treasury that has underestimated the volume of work required by lenders to process Treasury guidelines."

Experts and consumers seem to agree that efforts to reduce foreclosures by refinancing loans or modifying mortgage terms to a debt-to-income ratio of 31 percent are not working as well as they might.

At a recent Philadelphia hearing to gauge the effectiveness of the government's Home Affordable Modification Program (HAMP), even officials from Treasury, Fannie Mae and Freddie Mac who oversee it gave the program a "C" average.

John Dodds of the Philadelphia Unemployment Project agrees, saying the "program has deficiencies that make it ineffective for large numbers of the unemployed, as well as structural problems that were alluded to in the testimony" at the hearing.

Here's what Frimet has discovered about the process:

Lenders first tell you that things will take 30 to 45 days, but when pressed they'll acknowledge it's more like 90.

Servicers' support staff aren't calculating debt-to-income ratios properly.

Treasury has provided guidelines only, which Frimet doesn't believe are binding on any servicer.

He thinks many borrowers create "self-imposed" delays because they don't know what they are doing. Many don't have a clue about budgeting, or even how they got into trouble.

"Perhaps many applicants lack the skills to produce required financial data, and to communicate effectively" when information is incorrect, Frimet says.

For example, a homeowners' association fee was incorrectly added to his application. The matter was cleared up quickly.

Confusion over debt-to-income ratio - HAMP's goal is to get the mortgage payment down to not less than 31 percent of the borrower's monthly gross income - is more problematic, he says.

"My lender did not apply all of my mortgage loans into the debt-to-income calculation," Frimet says, adding that "they were not responsible for any mortgage other than [theirs]." So he had to keep repeating "that to calculate a DTI, you combine all mortgage debt, and compare it to all income."

"In all fairness to my mortgage lender, I was able [on a few occasions] to speak to other service processors that were more well-versed in Treasury's guidelines and were open to rational reasoning," he says.

Frimet presumes that many rejected applications stem from incorrectly calculated debt-to-income ratios.

His advice to homeowners: Don't give up.

"They need to call their lender again, and challenge the lender dogma," he says.