The report by the California Reinvestment Coalition says almost half of those applying for loan modifications under the federal program are denied immediately.
An overwhelming majority of housing counselors surveyed believe the program is not working with applicants always, or almost always, stuck in extended trial modifications. And many of the counselors surveyed believe minorities receive worse outcomes than whites.
But the California Bankers Association criticized the study for being too focused on the federal program; it says banks have helped many with their own programs.
It also says banks are limited in their ability to help those whose income can't keep up with monthly payments.