Renewed efforts by the federal government to simplify loan modifications in hopes of keeping homeowners in default from ending up in foreclosure have a good chance of succeeding, said Ballard Spahr partner Richard J. Andreano, Jr.

Mr. Andreano, a mortgage banking regulation specialist, said that any loan modification could be considered a success because interest rates are lower than when borrowers got the loan.

"Even if borrowers don't take that second step to provide documentation and get a better deal, at least (the government) has achieved some level of relief for the borrower while reducing risk for Fannie and Freddie," Mr. Andreano said. "It's a decision that half a loaf is better than no loaf."

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Mortgage Banking