It took two and a half years, but finally, New York has taken steps to hold banks and mortgage servicers accountable for their negotiating mortgage modifications in good faith. Lenders and servicers have avoided distressed mortgage owners since the mortgage meltdown at the end of the Bush presidency. Just in the last few months, a few bank administrators have even been caught admitting to this obvious lack of good faith. (Please see the first video on this blog home page.)
It is patently impossible to blame the ninety-nine percent failure of mortgage modification negotiations and trial modifications on distressed homeowners failure to submit supporting documents for their mortgage modification. We all knew it.
New York regulators have crafted new laws to give the state authority to punish mortgage servicers. This is something the federal Treasury Department, in administering the Home Affordable Mortgage Plan, or HAMP, has failed to do. It is clear from statements from Press Secretary Robert Gibbs and Treasury Secretary Geithner that the federal government has no intention to put any more pressure on banks to negotiate mortgage modifications in good faith.
The new rules set clear standards for how servicers must handle homeowners seeking a modification. It appears that these regualtors will even be searching for an example to pushand publicize.
The delays that hundreds of thousands of homeowners have encountered in the administration’s mortgage modification program have highlighted the poor performance by many mortgage servicers amd banks, particularly the largest 86. Struggling homeowners seeking a modification frequently wait months, even years, for an answer.
The New York laws, which go into effect Oct. 1, lay out how servicers must handle homeowners in danger of foreclosure. Within 10 days of a homeowner’s applying for a modification, the servicer is required to acknowledge the request and specify what additional information is needed. Within 30 days of receiving all of the required information, the servicer is required to render its decision and respond with either a written offer or a denial in writing.
Those rules are precisely the same as those for the administration’s modification program. These timelines resemble timelines for the Home Affordable Foreclosure Assistance law that the banks helped write that took effect last April.
The linked article refers to threats of witholding of incentive payments. What needs to be pointed out is the laughable incentives. They are so low as to be insignificant.
It appears that banks and servicers will be accountable for lost submitted documents. In another section, they prohibit servicers from continuing foreclosure proceedings if the homeowner is being evaluated for a modification. We’ve long known that the forelosure department of a lender is not held accountable to communicate with the Loss Mitigation Dept. right across the hall. Foreclosures occurring during the mortgage modification process have been a persistent problem.
The regulations are an important step in bringing transparency and accountability to an industry that has long avoided regulation despite a history of abusive practices.
The Consumer Financial Protection Bureau, newly created by the Financial Reform bill, will have jurisdiction over servicers and could set similar rules. It’s well recognized that rollout of this bill will take two years. The banks are strongly fighting the appointment of Elizabeth Warren, who did more than anyone else in Washington to put teeth into the bill.
We know that it will be up to the individual distressed homeowner to pursue their own mortgage modification for the foreseeable future. The REST Report evaluates a mortgage modification application on the same software platform the banks use to evaluate mortgage modifications. I provide the REST Report. Call me.
Hopefully other states will get the message and go after the real culprits here.
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The internet being what it is, certain search terms need to be empahasized so that you can find the best information. The REST Report is best classified as loan modification software, or mortgage modification software. It’s claim to fame is that you use it to calculate Net Present Value exactly the way the banks do, using the same software. It is best used as a do it yourself loan modification or do it yourself mortgage modification. For some reason, loan modification 2010 and mortgage relief 2010 are popular search terms.
This YouTube video says it all. Go here:
target="_blank">How to Get A Beneficial Loan Modification Now
easier for others to find.
Read it here
and here
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