The new year probably will bring little relief to hundreds of thousands of Floridians struggling to keep their homes, as experts anticipate the mortgage modification bottleneck will continue in 2010. Banks and loan services still are dragging their feet on approvals, despite the U.S. Treasury Department, the Obama administration and the Florida Attorney General pressuring them to speed up the process.

The one bright spot: New state laws should drive out many of the shady foreclosure rescue operations that took millions of dollars in advance to renegotiate mortgages but did little or nothing for their clients, consumer advocates say. Other than that, Alex Fernandez, director of homeownership preservation for Neighborhood Housing Services of South Florida, doesn't see much chance of change in the new year for the majority of homeowners desperate for lower mortgage payments. Nothing in federal law requires banks to modify a loan for a principal residence or even to discuss it with borrowers.

Fernandez's only hope is that the government will do some more "arm-twisting" to try to break the logjam next year. The need for loan modifications or some sort of mortgage help is acute in Florida, which leads the nation with 440,000 foreclosures – about one out of every eight homeowners with a mortgage. Claudia LeCompte's story is typical of what borrowers and foreclosure counselors say are the obstacles borrowers face when seeking a loan modification. After watching revenues fall at her yacht detailing company, LeCompte tried to get her mortgage interest rate cut from 6.7 percent to 2 percent until her company and the economy could recover. What she got was a year's worth of frustration. "I sent in all the papers three times," she said, including one 52-page set of documents. First she was told she qualified, then refused, then simply told to send it all in again.

After 12 months and an inquiry from the Sun Sentinel, her loan servicer, a company called HomeEq, offered LeCompte a loan modification earlier this month. Thousands of complaints filed with state regulators this year about loan modification operations, which proliferated as the difficult economy continued, prompted new laws and tighter scrutiny. As of Jan. 1, anyone doing modifications must be licensed as a mortgage broker and fees can be charged only if negotiations yield a benefit for the borrower. The state has received 4,672 new broker applications since July 1.

The state Attorney General has 17 lawsuits against of foreclosure rescue companies, including four in South Florida. And the Florida Bar, concerned about foreclosure specialists partnering with lawyers as a way to circumvent laws about upfront fees, opened 195 investigations involving loan modifications this year. Some attorneys may be tied to multiple investigations. Susan Spurgeon, a Tampa real estate attorney who has given professional seminars on modification, said the bar crackdown seems to have reduced the number of questionable practices. Fraud complaints filed with the Attorney General's Office against foreclosure rescue firms also have been dropping, from a monthly high of 1,045 in April to 251 last month.

But Spurgeon doesn't think stricter enforcement will help property owners get modified mortgages, or even answers, from legitmate lenders and loan servicers. The Attorney General's office received 578 complaints against banks regarding mortgage modifications from Nov. 9 through mid-December, with almost half of them against Bank of America. Banks say they've hired staff, set up processes for handling a flood of troubled borrowers, but consumers are not filling out the paperwork. JPMorgan Chase and Bank of America, two of Florida's largest lenders, say they make dozens of phone calls, send letters and even knock on borrowers' doors to get documents. But both banks say few borrowers respond.

The Obama Administration's Making Home Affordable program was launched in February, with a goal to help 3 million to 4 million homeowners stave off foreclosure. But a Treasury Department report released this month showed less than 35,000 South Floridians had received modifications under the program, less than 5 percent of those who qualified – far below the national average of 24 percent.