There are several reports today that report the federal government is satisfied with the 13% rate of mortgage modifications under the Making Home Affordable plan, A six-month-old, $75 billion White House-backed program to help homeowners on the verge of foreclosure.
Currently, even attorneys are powerless to remedy this situation because the banks have learned they can sandbag anyone trying to negotiate a mortgage modification or short sale. The one notable exception is the REST Report. We have no complaints about it’s success. It uses the bank’s own software to calculate Net Present Value, so there’s no place for the mortgage servicer to run. Game over.
Loan servicers have extended more than 571,000 loan-modification offers while about 360,000 homeowners have begun the process of modification, according to Dave Stevens, assistant secretary at the Housing and Urban Development department.
“At the current pace, the program is well on its way to meet the goal of modifying mortgage loans for more than a half million deserving homeowners by Nov. 1,” Stevens added. This we now know was laughably overstated.
Yet the chairwoman of the housing subcommittee for the House Financial Services Committee, Maxine Waters, D-Calif., said that the program is still struggling, pointing out that only 15% of the eligible 2.7 million homeowners have received help. She noted that Credit Suisse expects 8.1 million homes to go into foreclosure over the next four years.
The lawmaker also said that there were concerns about servicers continuing foreclosure proceedings, even as modification processes are under way. “Some servicers here today reported enrollment of only 4% of eligible borrowers.” This can be stopped, but it involves due diligence by the homeowner.
Rep. Spencer Bachus, R-Ala., the ranking Republican member of the House Financial Services Committee, said he believed the White House approach was flawed from the start. We now know that the exact flaw was in specific definition of establishing ‘imminent default’. The mortgage servicers have criminally twisted the establishment of this requirement.
Michael Barr, assistant secretary for financial institutions at the Treasury Department, said that the progress in implementing the programs have been substantial, and that government officials will not stop at 500,000 modifications once it meets that goal.
Nevertheless, he added that more needed to be done. “Servicer performance is uneven, geographic unevenness as well. Servicers need to reach out to find the eligible borrowers.”
This is not going to happen. There is no inherent motivation for a lender to modify any mortgage. Congress passed the three laws, but mortgage modification is now a do-it-yourself project in 2011.
Barr said regulators are taking steps to have mortgage servicers expand the number of borrowers that can be eligible for the loan-modification program. He said the Treasury is pressing loan servicers to hire more staff, expand call-center capacities and generally devote more resources to the program.
The Home Affordable Modification Program is using as much as $75 billion, in part, from the Troubled Asset Relief Program to incentivize loan servicers to make loan modifications for troubled homeowners.
Another program, The Home Affordable Refinance Program, seeks to expand access to refinancing opportunities for families whose homes have lost value and whose mortgage payments can be reduced at market interest rates. This has also proven to be laughable. It was written by the banks. ‘Nuff said.
For those readers that prefer YouTube videos, try this: How to Get A Beneficial Mortgage Modification Now
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Originally posted 2009-09-10 20:47:44. Republished by Blog Post Promoter
