mortgage relief only help 31,000
Posted by admin on December 10th, 2009
The type of reporting from CBS is shocking (see below). I know media is stressed now and staff are dwindling in some arenas, but the following story is completely one sided; NO effort went into presenting a balanced view of the current mortgage crises. To give the lenders’ side without talking with anyone who has been dealing with them for one-two YEARS, is untenable.
CBS News
Washington, December 10, 2009
Obama Administration’s Touted Loan Modification Program Seen as a Bust; Banks Blame Borrowers for Lack of Paperwork
(AP) Just over 31,000 homeowners have received permanent loan modifications under the Obama administration’s mortgage relief plan, a big setback for the government’s embattled effort to stem the foreclosure crisis.
Lenders blame the low success rate – only about 4 percent of the nearly 760,000 who have signed up – on borrowers who don’t return the necessary paperwork to complete the process.
Editor’s Note: Absolutely NOTHING will make me believe this article. I am 363 days into “negotiations” with my lender. Just this morning they called to say that more documents are due and that the last documents they received were in July 2009. I started laughing . . . somewhat hysterically, I might add . . . and referred to my “Lender Timeline,” which I started in December 23, 2008 when they first told me they didn’t have the required paperwork. At no time have I talked with the same person more than once. Papers were submitted repeatedly; the lender lost it. They lost it again when it was submitted through NACA, then on April 28 and April 30 (saying I had not sent proof of income). Lost on June 18. Resubmitted everything on July 27. Lost again as follows:
- October 10, I was told a new Wells Fargo rep had my paperwork; they had everything they need.
- October 21 call re missing documents: Responded only to be told “oh, we have everything we need.” The bank rep offered that their records were “confusing,” and updated the file. They were also submitted on October 23 through NACA.
Calls came the following days requesting missing documents. I returned each call only to be told “I don’t know why we called. We have everything we need:”
- October 22
- October 29
- December 8
- December 9
- December 10 (2 calls)
This is insane! And they DARE put this on the home owner!
The Treasury Department, which released the figures Thursday, said it will step up pressure on the industry to improve. The administration’s focus is to “get as many of those eligible homeowners as possible into permanent modifications,” said Phyllis Caldwell, chief of Treasury’s homeownership preservation office.
When the poor progress was clear last summer, the Treasury Department set a goal of enrolling up 500,000 borrowers by Nov. 1. With the clock ticking, many lenders started giving homeowners verbal approval and a temporary modification.
“They were going to do anything to hit that number,” said Marietta Rodriguez, national director of homeownership programs at NeighborWorks America.
Editor’s Note: Obviously they DID try anything to hit that number; The temporary modification offer I received in September was actually $4532 — $15 less than my original loan payment. One of their own executives said “this is ridiculous” and took it back to the bargaining table.
. . . Eligible borrowers who are behind or at risk of default can have their mortgage interest rate reduced to as low as 2 percent for five years. They are given temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete the required paperwork, including proof of income and a financial hardship letter.
Without the needed documents, however, borrowers are ejected from the program.
Mike Brauneis, director of regulatory risk consulting at consulting firm Protiviti Inc. predicts that only 20 percent of borrowers who were verbally approved for modifications will ultimately sign up.
“Either people qualify verbally and never send their paperwork in, or they send it in and the numbers are different,” he said.
The following is from a member of a Marin County, California group (Marin Family Action that is fighting to keep their homes against tremendous odds, sloppy record keeping and simple unwillingness by lenders to truly help anyone:“Define help. ‘Lip service’ does not count. Talking to a different person every time only shows contact was made but NO resolution of progress was made! I would like to see success stories of actual cases of homes saved, city by city, lender by lender, terms, etc. How many of the lenders that refuse to modify the loans with the present owners but then sell to a new buyer at a much lower net price? Who benefits then? The goal is to NOT make homes affordable to NEW buyers but SHOULD BE TO KEEP people in their homes, communities by providing new income sources to them.”
Some borrowers lied about their incomes when they originally took out their loans, and still aren’t able to show proof. During the housing boom, the lending industry didn’t require borrowers to prove their income, and those loans are highly concentrated in the states hardest-hit by the housing bust.
More than half of loans made in California and Nevada from 2004 to 2007, for example, required little or no documentation, according to research firm First American CoreLogic. Nationally about 4.3 million of those loans were made during the boom years.
“You definitely have a group that shouldn’t be in the loan in the first place” said Terry Moore, managing director of consulting firm Accenture’s North America banking practice.
So WHY were people given loans that they should “not have in the first place?” It was practice in California to have the borrower sign blank forms while the mortgage company shopped the loan; they filled in the figures and the borrower never saw them.)
But a watchdog report this week said the government effort “appears capable of preventing only a fraction of foreclosures” and said that only $2.3 million out of a potential $75 billion government commitment had been spent.
Tags: CBS, half truths, lender loses paperwork, lost documents, lost paperwork, mortgage lenders lying, poor journalism, reporter resources, resources for reporters
