Foreclosure Prevention News

Banks Asked to Ramp Up Loan Help

2009-07-29T05:16:00.003-05:00

U.S. Wants 500,000 Mortgage Modifications by Nov. 1; Firms Ask for Clarity
July 29, 2009 - by Renae Merle - Washington Post Staff Writer

Senior administration officials pressed executives from the nation's largest banks Tuesday to speed help to distressed borrowers after a frustrating start to the government's foreclosure-prevention effort and set a goal of more than doubling the number of homeowners receiving aid by November.

After a series of meetings with top banking executives, Treasury Department officials said they want lenders to modify 500,0000 mortgages by Nov. 1. Since the program, known as Making Home Affordable, began in March, it has recorded about 200,000 loan modifications. Read more ...

Related articles
Treasury Says Servicers Commit To Increased Loan Mod, July 28, 2009, Forbes
Mortgage Servicers Pledge to Accelerate Modifications, July 28, 2009, Bloomberg
Servicers Attend Meeting of the Minds in Washington, July 28, 2009, Housingwire
Administration pushes servicers to modify more mortgages, July 29, 2008, Seattle Post Intelligencer

Unintended consequence of mortgage modifications: falling credit scores

2009-07-28T16:21:00.001-05:00

July 26, 2009 - by Alexis Leondis - Bloomberg News

NEW YORK — Victor Stern thought his money troubles were over when he got approval to modify his home loan.

Then his credit score dropped 121 points.

Stern, a business development director at an information technology company in Charlotte, N.C., said he was shocked to see his credit score drop to 619 from 740 after entering the trial period for a loan adjustment under President Barack Obama's Home Affordable Modification Program. A salary reduction caused him to seek a change in the terms of his loan before he missed any payments.

Mortgage lenders, including banks such as Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp., report loan modifications to credit bureaus. The adjustments can lower credit scores because of the way the FICO formula, the most widely used by U.S. lenders, works. Read more ...

Foreclosures Are Often In Lenders' Best Interest

2009-07-28T06:47:00.001-05:00

July 28, 2009, by Renae Merle, Washington Post Staff Writer

Government initiatives to stem the country's mounting foreclosures are hampered because banks and other lenders in many cases have more financial incentive to let borrowers lose their homes than to work out settlements, some economists have concluded.

Policymakers often say it's a good deal for lenders to cut borrowers a break on mortgage payments to keep them in their homes. But, according to researchers and industry experts, foreclosing can be more profitable. Read more ...

U.S. Effort to Modify Mortgages Falters

2009-07-28T03:15:00.002-05:00

July 28, 2009 - By Ruth Simon - The Wall Street Journal

An Obama administration effort to reduce home foreclosures by lowering the mortgage payments of struggling borrowers before they fall behind is failing to help as many people as expected.

Among the problems: Some homeowners are being told they must be behind on their payments to receive help, which runs counter to the aim of the program. In other cases, delays are so long that borrowers who are current on their payments when they ask for a loan modification are delinquent by the time they receive one. There is also confusion about who qualifies.

Administration officials have summoned executives of 25 mortgage-servicing companies to Washington on Tuesday to discuss efforts to help borrowers, both delinquent and at risk. Among the items on the table: what steps the companies should take to increase and speed up modifications. Read more ...

New GAO report: Home Affordable program needs to be more transparent, accountable

2009-07-24T11:45:00.001-05:00

The U.S Government Accountability Office released a report yesterday calling on the Treasury to make the administration’s Home Affordable Modification Program (HAMP) more transparent and accountable. The 68-page report is the sixth in a series of reports issued by the GAO analyzing the effectiveness of the Troubled Asset Relief Program (TARP). The report includes the following recommendations:

consider methods for monitoring compliance with and the effectiveness of its counseling requirement;
reevaluate the basis and design for Home Price Decline Protection (HPDP) program;
regularly update assumptions and projections underlying the estimated number of borrowers likely to be helped by HAMP;
staff vacant positions within the Homeownership Preservation Office (HPO), and evaluate its staffing levels and competencies;
finalize a comprehensive system of internal control over HAMP; and
systematically assess servicer’s capacity to meet HAMP’s requirements during program admission.

The full report is available here.

Obama turns up heat on mortgage servicers

2009-07-18T07:16:00.004-05:00

Administration will tell financial institutions they must do more to help borrowers. 'We think we can do even more,' official says.

July 16, 2009 - by Tami Luhby CNNMoney.com

NEW YORK -- As complaints mount about President Obama's foreclosure prevention program, the administration is ratcheting up the pressure on mortgage servicers.
Financial executives will meet with Treasury Department and administration housing officials on July 28 to discuss how the loan modification and refinancing plan has been implemented. The administration plans to grill servicers that have done few modifications or have had many complaints.

Officials also want financial institutions to hire more people and train them better, expand their call centers, and send more mailings to eligible borrowers, according to a letter sent to servicers last week. The government also said servicers need to establish a way for borrowers to contest their treatment or denial. more ...

Senate Banking Committee Focuses On HAMP

2009-07-18T07:07:00.004-05:00

July 17, 2009 - by John Clapp - Mortgage Orb

As a precursor to the July 28 meeting scheduled between Treasury officials and servicers participating in the government's Home Affordable Modification Program (HAMP), the Senate Banking Committee held a hearing Thursday morning in an effort to help lawmakers gauge HAMP’s progress - or lack thereof - since its introduction in February.

The hearing - which included testimonies from the Treasury, as well as Wells Fargo and Bank of America servicing execs - highlighted the program’s administrative obstacles and shortcomings. In recent weeks, lawmakers have increasingly expressed concern that HAMP, originally projected to save up to 4 million homes, is both underperforming and being implemented too slowly.

“We've got to get this out sooner, quicker, faster, more expeditiously,” said Sen. Mark Warner, D-Va. more ...

Bankers, Lawmakers Assail Pace of Obama’s Mortgage Programs

2009-07-18T07:00:00.004-05:00

July 16, 2009 - By Dawn Kopecki and Jody Shenn - Bloomberg

The Obama administration may be “just going through the motions” in dealing with the deficiencies of U.S. anti-foreclosure programs, leaving a record number of struggling homeowners with few options for relief, Senate Banking Committee Chairman Christopher Dodd said.

“I’ve had a lot of frustrations in trying to come up with plans that work,” Dodd, a Connecticut Democrat, said during a break in a hearing on the programs today in Washington. “I’m concerned that we’re just going through the motions. I don’t get the sense of urgency.”
A Bank of America Corp. executive told Dodd’s committee that the administration stokes “confusion and delay” among lenders when it announces anti-foreclosure plans before completing the program details, while Senator Richard Shelby of Alabama complained that the programs have fallen short of goals.

“Existing modification programs have not been very effective,” Shelby, the ranking Republican on the Senate Banking Committee, said. “Sustainable policies must be based on economic realities and facts, not wishful thinking.” more ...

Mortgage-Bond Holders Seek Borrower Debt Reductions

2009-07-18T06:57:00.006-05:00

July 16, 2009 - By Jody Shenn - Bloomberg

Mortgage-bond investors want more homeowners to be given aid that reduces the size of their debt below the value of their property, a Fortress Investment Group executive told Congress.

Banks controlling loan-modification decisions as servicers have blocked such relief because other types of changes to mortgage terms don’t require the banks to suffer losses on their holdings of home-equity loans, Curtis Glovier, a managing director at the New York-based asset manager said in prepared testimony to the Senate Banking Committee in Washington today.

“Investors are willing to do our part by making a significant sacrifice in reducing mortgage principal,” he said, speaking on behalf of the Mortgage Investors Coalition, a group formed in April that represents 11 firms with $200 billion of assets under management. more ...

Administration Weighs More Foreclosure Aid

2009-07-18T06:45:00.003-05:00

Homes Could Be Rented Under Proposal

July 17, 2009 - By Renae Merle - Washington Post Staff Writer

A top Treasury Department official told a Senate panel yesterday that the government is considering a proposal to allow homeowners to stay in their home as renters after a foreclosure. If enacted, the plan would attempt to address the glut of vacant properties in neighborhoods across the country, helping drag down home values. It would be yet another acknowledgment by the Obama administration that some borrowers cannot be saved from foreclosure despite government and industry efforts. more ...

From Treasury to Banks, an Ultimatum on Mortgage Relief

2009-07-11T07:49:00.003-05:00

A recent article by Joe Nocera of the New York Times attempts why so many loan servicers are having difficulty getting up to speed with the Obama administration's Making Home Affordable program:

“Servicers are just not equipped to do this,” said William Kelvie, the chief executive of Overture Technologies, a company that sells underwriting software. If you want to understand why loan modifications have been so slow in coming, that’s a pretty good place to start.

For most of its history, the mortgage servicing industry — which is dominated by big banks like Bank of America, Wells Fargo, and JPMorgan Chase — did relatively simple tasks: it collected mortgage payments, paid taxes on the properties and so on. Yes, it dealt with borrowers who were in arrears — which usually amounted to no more than 2 or 3 percent of their portfolio at any one time — but mainly it either prodded people to get current on their payments or initiated foreclosure proceedings.

Modifying loans — thousands upon thousands of loans, amounting to as much as 25 percent of a servicer’s portfolio — is a much more complex task. For some servicers, the sheer numbers can “overwhelm the system,” said Larry B. Litton Jr., the chief executive of Litton Loan Servicing, which is owned by Goldman Sachs and which has long specialized in loan modifications. That is at least part of the reason why borrowers are having so much trouble getting their servicers to take their calls: many servicers can’t cope with the volume.

More important, loan modification requires a lot of work. They can’t be done in a blanket, one-size-fits-all fashion. Rather, loan modification is a one-on-one process that requires servicers to do something that should have been done in the first place: actually underwrite the loan.

The full article is available here

White House Prods Banks

2009-07-10T07:03:00.002-05:00

Letter Tells Chiefs To Start Backing Mortgage Relief

July 10, 2009, by Renae Merle, Washington Post Staff Writer

The Obama administration yesterday scolded the heads of the country's largest banks, urging them to move faster and do more to help millions of distressed homeowners under a federal foreclosure prevention program.

In a two-page letter, Treasury Secretary Timothy F. Geithner and Shaun Donovan, secretary of the Department of Housing and Urban Development, acknowledge that the government program, known as Making Home Affordable, has yet to gain traction since being launched in March.

"We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share," the letter said. more ...

CNNMoney.com interviews executive director of Hope Now

2009-07-09T23:49:00.000-05:00

CNNMoney.com interviews Faith Schwartz, Executive Director of Hope Now, a coalition of servicers, community groups and mortgage investors working to stem foreclosures.

Freddie Mac turns to YouTube

2009-07-09T05:38:00.003-05:00

New Video Shows Which Documents Can Help Reduce Repeat Calls To Servicers

McLean, VA – Freddie Mac today posted a new video on YouTube.com that shows late-paying borrowers how gathering a few financial documents before calling a mortgage servicer can cut the time needed to determine their eligibility and process their application for a loan modification under President Obama's Making Home Affordable program or Freddie Mac's other workout initiatives.

Available in English and Spanish versions, the new Freddie Mac video, “Stop Foreclosure: Documents Your Lender Needs to Help You,” can be seen at Freddie Mac’s channel on YouTube at http://www.youtube.com/FreddieMacWeb.

The two-minute video shows step-by-step which documents borrowers should have on hand when they call their servicer to discuss loan modifications. These documents can cut the time a servicer will need to understand the borrower's situation, determine his or her eligibility for a workout, and process the application.

"America's servicers are handling an extraordinary volume of calls from distressed borrowers seeking an Home Affordable Modification under the President's program," said Ingrid Beckles, senior vice president of default asset management at Freddie Mac. "By taking a few moments to gather these documents borrowers can help their servicer understand their financial situation and reduce the need for repeat calls."

Can I Qualify for a Loan Modificaiton Without A Job?

2009-07-08T07:51:00.000-05:00

As a follow-up to NPR's story about homeowners struggling to navigate their way through the Making Home Affordable program, a listener wrote to NPR asking whether people whose only income is unemployment benefits are still eligible to be considered for a loan modification under the program. There seems to be some confusion among lenders and housing counselors on this point. Chana Joffe-Wolt, an NPR reporter, ran it by the Treasury Department's point person for the program, who said, yes. Here's the full answer:

As of now, unemployment must continue for nine months to be counted, but we are consistently reviewing requirements. People on unemployment are eligible, and people on unemployment have gotten loan modifications.

There are a number of different parameters for eligibility (can be found on MHA website), so I can't comment on why this couple in particular is having difficulty. The administration is committed to keeping families in their homes and we are exploring ways to reach as many in need of assistance as possible.

This is consistent with the program guidelines issued by Fannie Mae, the entity designated by Treasury as the Financial Agent for the program. Under the heading "Verifying Borrower Income and Occupancy Status," the guidelines provide:

If the borrower receives public assistance or collects unemployment:

Acceptable documentation includes letters, exhibits or a benefits statement from the provider that states the amount, frequency, and duration of the benefit. The servicer must determine that the income will continue for at least nine months.

Wisconsin-based information management company offers new loan servicing software designed around Making Home Affordable

2009-07-08T07:32:00.000-05:00

BROOKFIELD, Wis. - (Business Wire) Fiserv, Inc. (NASDAQ:FISV), the leading global provider of financial services technology solutions, announced today its Loan Servicing Platform, with extensive loan modification and loss mitigation features, is fully compatible with new guidelines from the U.S. Treasury Department on home loan modifications. In fact, from its inception the Fiserv platform was the first loan servicing system that was fully capable of supporting the Making Home Affordable Modification program.

As part of the Obama administration’s initiative, the U.S. Department of the Treasury created the Home Affordable Modification Program (HMP) as part of the Making Home Affordable program. Government Sponsored Enterprises (GSEs), Fannie Mae and Freddie Mac, were named as the administrators of the HMP. Designed to help as many as three to four million distressed homeowners avoid foreclosure by modifying loans and monthly mortgage payments to an affordable level, the program provides clear and consistent guidelines that the mortgage industry must follow.
The Loan Servicing Platform is an example of Fiserv’s processing services core competency and utilizes integrated default management tools that allow servicers to track and study the loans being modified. With this knowledge, servicers can formulate best-option workout scenarios based on operational business rules while meeting HMP guidelines.

Read full press release

An editorial and two responses to Gretchen Morgenson’s column

2009-07-07T07:00:00.000-05:00

An editorial in this past Sunday's New York Times urges the Obama administration to do more to address the foreclosure crisis. Also, here are links to two interesting responses to Gretchen Morgenson’s column asking why there have been so few modifications:

Why So Few Mortgage Modifications? by Zubin Jelveh, The New Republic
Making Home Affordable Is … Not by Tim Fernholz, The American Prospect

So Many Foreclosures, So Little Logic

2009-07-05T07:54:00.009-05:00

An article in today's New York Times reports that foreclosures are picking up speed. That's not a surprise. But what is surprising is that many lenders are apparently neglecting less expensive alternatives to foreclosure, alternatives such as loan modificaitons. When it seems to make greater economic sense to keep borrowers in their homes paying a reduced amount, than it does to toss them out and wind up loosing tens of thousands of dollars more, why aren't lenders selecting the less expensive alternative?

The article reports on a recent study of 3.5 million subprime loans in securitization pools overseen by Wells Fargo. The analysis showed that, among recent foreclosures from that pool, the average loss was 64.7 percent of the original loan balance; a staggering $144,000 loss on the average $223,000 mortgage.

This is much higher than the roughly $60,000 loss per foreclosure that others have estimated (see previous post). One explanation for the difference might be the recent study's focus solely on subprime loans. Another explanation could be the rapid decline in home values since the earlier estimates were calculated, a decline which means greater losses when homes are foreclosed.

Regardless of whether the loss per foreclosure is $60,000 or $144,000, the basic premise is that lenders have a lot of room to restructure loans and reduce borrowers' monthly mortgage payments -- and still end up in a better economic position than they would at the end of a long and costly foreclosure process. Why aren't more loans being modified?

The full artcile is available here.

A typical foreclosure costs the lender $60,000

2009-07-04T08:06:00.003-05:00

A policy paper released last year by the Mortgage Bankers Association, an industry trade group, provides a useful summary of the significant costs borne by participants in the foreclosure process--with a focus on the lenders. While costs for individual loans vary widely, the paper cites research estimating that foreclosing a loan costs the lender nearly $60,000, on average. Other research estimates the cost to the lender somewhere between 30 and 60 percent of the outstanding loan balance.

Further reading:

Mortgage Bankers Association, Lenders’ Cost of Foreclosure, a policy paper prepared for the Congressional Education Series Briefing (May 28, 2008).

Darryl E. Getter, Understanding Mortgage Foreclosure: Recent Events, the Process, and Costs, Congressional Research Service Report for Congress (November 5, 2007).

Desiree Hatcher, Foreclosure Alternatives: A Case for Preserving Homeownership, Profitwise News and Views, published by the Federal Reserve Bank of Chicago (February 2006)

Karen M. Pence, Foreclosing on Opportunity: State Laws and Mortgage Credit, Board of Governors of the Federal Reserve System (May 13, 2003)

Amy Crews Cutts and Richard K. Green, Innovative Servicing Technology: Smart Enough to Keep People in Their Houses?, Freddie Mac Working Paper #04-03 (July 2004).

Obama Administration Expands Home Refinancing Program

2009-07-01T16:13:00.000-05:00

July 1, 2009 - By Renae Merle - Washington Post Staff Writer

The Obama administration announced today an expansion of a key part of its foreclosure prevention program to allow more homeowners who owe more than their home is worth to refinance into lower-cost mortgages.

The effort is an acknowledgment by the administration that falling home prices limited the impact of its housing program, Making Home Affordable. Under the program, homeowners could refinance if their mortgage did not exceed the value of their home by more than 105 percent. Now, the administration is expanding the program to homeowners who are up to 125 percent underwater on their loan. more ...

Paper Avalanche Buries Plan to Stem Foreclosures

2009-07-01T09:46:00.000-05:00

June 28, 2009 - by PETER S. GOODMAN – New York Times

LOS ANGELES — Somewhere on earth, there must be a more difficult task than this: persuading American mortgage companies to lower payments for homeowners who can no longer afford their loans. But as Karina Montenegro struggles to accomplish this feat for a troubled borrower, she strains to imagine a more futile pursuit.

Ms. Montenegro, an intern at a local company that seeks loan modifications, dials Washington Mutual to check on the status of an application for a homeowner whose income has plummeted. She endures a Muzak-scored purgatory while on hold. Syrupy-voiced customer service representatives chide her for landing in the wrong department. She learns that the documents her company sent in have simply vanished — for the third time since November. more ...

Reports by the Office of the Comptroller of the Currency and the Office of Thrift Supervision presented mixed signals of improvement and distress

2009-06-30T14:52:00.000-05:00

* U.S. loan modifications up 55 pct in Q1 from Q4
* Seriously delinquent mortgages up 9 pct in Q1 from Q4
* Foreclosures in process up 22 pct in Q1 from Q4

WASHINGTON, June 30 (Reuters) - The pace of home loan modifications shot up during the first quarter, but so did mortgage payment delinquencies and foreclosures, U.S. bank regulators said on Tuesday. The quarterly report on mortgage metrics showed that the quality of modifications improved, with more than half of them resulting in lower monthly principal and interest payments.

But the report released by the Office of the Comptroller of the Currency and the Office of Thrift Supervision presented mixed signals of improvement and distress as rising unemployment and other economic pressures weighed on borrowers.

"While I'm very concerned about the rise in delinquent mortgages and foreclosure actions, the shift in emphasis by servicers to more sustainable, payment-reducing modifications is a positive step that should show significant benefits in the coming months," Comptroller of the Currency John Dugan said in a statement.

As the Obama administration's Making Home Affordable loan modification plan gains traction, he said, regulators will continue to see progress in future reports. more ...

Housing Secretary Shaun Donovan Address Chicago Conference on State and Local Housing Policy

2009-06-30T14:48:00.000-05:00

June 30, 2009

Secretary Donovan delivered a speech at the Solutions for Working Families: 2009 Learning Conference on State and Local Housing Policy in Chicago. Following is an excerpt. The full text is available from the Chicago Sun-Times here.

And our work continues with the President's Making Home Affordable plan. Nearly a million homeowners have received information about the plan and participating services have extended offers on nearly a quarter-million trial modifications so far. Over the next few months, we expect these numbers to grow significantly, and we already have some early signs that the overall housing market is recovering.

But as we work to help our economy recover and put a halt to foreclosures, we are also laying the foundation for sustainable growth.

We have made the highest amount of competitive funds available in HUD's history through the Recovery Act - encouraging state and local governments to develop new and innovative ways to improve public housing, rebuild communities, and increase energy efficiency.

One of the most important competitive investments in the Recovery Act is the additional $2 billion we've invested in the Neighborhood Stabilization Program to help communities purchase and convert foreclosed and abandoned properties into new affordable housing, land banks, or other options that preserve neighborhoods.

These competitive funds will not only turn foreclosed properties into homes again, but also ensure that communities go about the rehabilitation and purchase process in a smart, collaborative, and, above all, sustainable way.

Chase modifies 138,000 mortgages

2009-06-30T14:40:00.000-05:00

June 30, 2009 - Business First of Louisville

Chase bank has approved 138,000 trial mortgage modifications since the federal government implemented the Making Home Affordable program on April 6.

The figure includes 87,100 modifications through the Making Home Affordable program and another 50,900 through its own mortgage-modification program. more ...

Protesters demand mortgage help from loan firms

2009-06-30T14:37:00.001-05:00

June 30, 2009 - by Kathy Matheson - Associated Press Writer

PHILADELPHIA—Several key mortgage companies that benefited from federal bailout funds have yet to sign onto the Obama administration's plan to help more homeowners avoid foreclosure.

The community group ACORN held 15 protests around the country Tuesday to draw attention to the slow progress of the administration's plan, which was launched four months ago. Demonstrators called for the companies, including Litton Loan Servicing, HomEq and OneWest, to sign onto the Obama administration $75 billion initiative called "Making Home Affordable." more ...

Advocates say housing aid doesn't go far enough

2009-06-30T06:47:00.006-05:00

Minnesota Public Radio reports that homeowners are having difficulty receiving timely loan modificaitons, even under the Obama administration's Making Home Affordable program. The report, which aired on All Things Considered, quotes a University of Minnesota law professor who advocates for a more robust and systematic implementation of loan modifications for struggling homeowners:

"Here is what needs to happen," he says, "we need to stop talking about this and we need the government to come in with a clear set of mandates, clearly enforced with transparent rules. If we have that, we are going to have real loan modifications happen in a systemic way."

Cox says modifying or refinancing more loans is critical now, because keeping foreclosures from flooding the market and continuing to drive down home prices is the only way to stabilize the economy.

The full report is available here.

Two earlier Pubic Radio reports also profiled homeowners who were having difficulty obtaining loan modifications:

Homeowners Find Mortgage Program Not So Easy
All Things Considered, June 9, 2009

Homeowners Find Loan Modification Slow Going
Morning Edition, May 7, 2009

And here is a link to the initial report from Public Radio covering the launch of the Making Home Affordable program in March:

Obama Announces Home Affordability Program
Morning Edition, March 5, 2009

Community banks involved in relatively few foreclosures

2009-06-29T07:28:00.001-05:00

An investigative report by the Green Bay Press-Gazette shows that, of all foreclosures filed in Brown County, community banks are involved in only a handful. The paper’s research found that Wells Fargo was involved with 69 of 498 foreclosure filings in 2008 (13.9%), the highest of any single financial institution. The financial institution with the next highest number was Deutsche Bank with 38 filings (7.6%). US Bank was third on the list, with 33 filings (6.6%). The report makes no mention of the volume of loans made or serviced by national banks as compared to community banks.

The full report is available here.

The findings are similar to those in a report commissioned by Community Bankers of Wisconsin, an industry trade group, released in August of last year. The Community Bankers’ report found that, of the top dozen financial institutions commencing foreclosure actions in Wisconsin--accounting for 67% of all actions filed--all were headquartered outside the state. During the first half of 2008, the top five were Wells Fargo, US Bank, Deutsche Bank, Countrywide Home Loans and JP Morgan Chase Bank.

The full release is available here.

Marion: Former judge and PSC official now working to ease foreclosure mess

2009-06-28T23:46:00.000-05:00

June 19, 2009 - by Brian E. Clark - For WisBusiness.com

Ed Marion, former state Public Service Commission general counsel and administrative law judge, lauds Iowa County Judge (and former Madison mayor) Bill Dyke for instituting a mediation program in his county.

“Judge Dyke is the first and I believe the only Wisconsin judge who has instituted a mandatory form of foreclosure mediation program that requires people who are faced with foreclosure and lenders to sit down with an attorney mediator and try to mediate a resolution,” he says.

Marion, who's helping with the effort, says the first foreclosure mediations started in June. He notes Milwaukee and Dane County judges are considering similar programs. more ...

9% of all Wisconsin borrowers are in trouble

2009-06-28T14:50:00.000-05:00

A quarterly report issued by the Mortgage Bankers Association earlier this year revealed that nearly 9% of Wisconsin borrowers are in trouble: 5.75% of residential mortgage loans in the state were delinquent (at least 30 days past due) as of March 31 and an additional 3.11% were in foreclosure. Nationwide figures showed a record number of borrowers in distress: the delinquency rate was 8.22% and the foreclosure rate was 3.85%, a total of more than 12%. The situation is not likely to improve until unemployment stops rising, the report concludes. With unemployment not expected to peak until mid 2010, the performance of mortgages is unlikely to improve much until after that.

Press release from Mortgage Bankers Association
Milwaukee Journal Sentinel Report

Can Obama keep up with home prices?

2009-06-28T06:40:00.000-05:00

June 27, 2009 - by Carla Fried - CNNMoney.com

Good news or bad news? The National Association of Realtors reported Tuesday that 33% of May existing-home sales were distressed (read: foreclosures and short sales) and the median sales price is now $173,000.

If you’re employed by the glass-half-full NAR, you need to spin that as good news, and the eternal optimists did not disappoint. The trade association pointed out that the share of sales that were distressed has declined from the 45% rate in April. more ...

Obama Administration to Launch National Outreach Campaign

2009-06-26T10:32:00.000-05:00

MIAMI – The Obama Administration today kicks off a nationwide campaign to promote the Making Home Affordable Program, a plan to stabilize our housing market and help millions of Americans reduce their monthly mortgage payments to more affordable levels. The campaign starts today in Miami and then travels to nine additional housing markets that have been hit hard by foreclosure, with the goal of empowering local partners to connect homeowners with much needed relief under the Administration's housing program.

The campaign will engage local housing counseling agencies, community organizations, elected officials and other trusted advisors in the target markets to build public awareness of Making Home Affordable, educate at-risk borrowers about options available, prepare borrowers to work more efficiently with their servicers and drive them to take action. more ...

Lender acknowledges difficulty in getting MHA program up and running

2009-06-25T10:56:00.009-05:00

An article appearing in the Tulsa World today reports that, so far, not many Oklahomans have advantage of the Making Home Affordable program. One lender intereviewed for the story notes "[t]he details are a little confusing, and getting our processors used to looking at it this way was a trick, too," which may help explain the slow start to the program. more ...

Obama asks Treasury Secretary Geithner to evalute the Making Home Affordable to determine what's working, what's not

2009-06-25T07:04:00.002-05:00

During a round-table with a handful of reporters in the West Wing, President Obama said he asked Treasury Secretary Timothy Geithner, just days ago, for a top-to-bottom evaluation of the administration’s homeowner relief program, Making Home Affordable, to determine “what’s working and what’s not, and whether there’s more that we can do.” more ...

Antonio Reilly quoted in CNNMoney.com article reporting on NSP

2009-06-24T08:08:00.000-05:00

NEW YORK (CNNMoney.com) -- Home prices are at their most affordable in many years, which has opened up homeownership to many who had been locked out during the housing boom. And now, the federal government -- and many states - are launching plans to hook up buyers of repossessed properties with very attractive terms. The feds made nearly $6 billion available for the Neighborhood Stabilization Program, which intends to combat blight by reducing the number of foreclosed homes on the market. more ...

It's Time We Talked: Mandatory Mediation in the Foreclosure Process

2009-06-24T07:40:00.001-05:00

A new report released by the Center for American Progress suggests that it's time for the federal government to take a more direct role in providing opportunities for mediation. more ...

Foreclosure Prevention: New Program Shows Big Jump

2009-06-22T20:41:00.000-05:00

June 22, 2009 -- by Stephen Gandel -- Time

The government finally seems to be making progress in its efforts to stem the foreclosure crisis. Housing and Urban Development (HUD) officials say lenders extended loan-modification offers to 40,000 borrowers who were struggling to pay their mortgage in the second week of June. That is nearly triple the weekly average of about 15,000 workouts that loan servicers had extended in the prior 10 weeks since the government's latest foreclosure-prevention plan was announced.

"Foreclosures were becoming a self-reinforcing problem for the housing market," said HUD head Shawn Donovan, speaking to journalists last week at the National Association of Real Estate Editors' annual conference. "Already we are seeing signs that the housing market is better off than when President Obama took office."

more ...

Helping Homeowners Stay Put

2009-06-21T13:17:00.000-05:00

At work: Patricia Hull, housing counselor
Jun 21, 2009 -- By Nancy Jones-Bonbrest -- The Baltimore Sun

BALTIMORE--Patricia Hull, a former real estate agent, has changed the focus of her counseling from guiding people into homeownership to showing them how to keep their homes.

... It typically takes 60 to 90 days to get an answer from lenders as to whether they are agreeable to refinancing or modifying a loan or lowering a mortgage payment. During this time, Hull recommends that clients call their lenders weekly or every other week to check in.

Hull said the housing atmosphere has changed from seeing primarily clients with unfavorable loans to those who need assistance because of economic hardship. The federal Making Home Affordable program has helped open up options to homeowners, Hull said. This includes greater access to lenders and a consistency in how lenders work with customers.

more ...

7 Lenders Get Immunity from State Foreclosure Prevention Act

2009-06-20T14:03:00.000-05:00

June 20, 2009 -- By Jim Wasserman -- Sacramento Bee

SACRAMENTO--Bank of America Home Loans, CitiMortgage and Carrington Mortgage Services are among the first seven lenders and loan servicers granted immunity from the state's foreclosure prevention act launched this week in California. The new law makes lenders prove to the state that they have a comprehensive loan-modification program that helps borrowers stay in their homes. Those that can't prove it to the state's satisfaction must wait an extra 90 days before foreclosing on borrowers.

... Bank of America Home Loans spokesman Rick Simon said Friday the Charlotte bank's adherence to federal Making Home Affordable guidelines provided it the exemption from 90-day delays in foreclosing in California.

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Column: Government homeowner efforts almost too little, too late

2009-06-20T13:57:00.000-05:00

June 20, 2009 -- By Wayne A. Capurro, Special to the RGJ -- Reno-Gazette Journal

RENO--As Notice of Default filings climb to unprecedented levels throughout our community, through the Western region, Florida and other parts of our country, the Federal Government is, once again, on it’s way to the rescue. Through the Obama Administration’s “Making Home Affordable Program”, they claim they will save as many as nine million homeowners from foreclosure. Considering the crime that brought about the need for such a plan has the government’s fingerprints all over it, it’s the least they can do.

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Federal Housing Administration to play expanded role

2009-06-19T21:03:00.000-05:00

June 19, 2009 -- By Alan J. Heavens -- Inquirer Real Estate Writer

WASHINGTON--With some early signs that the housing market is stabilizing, HUD Secretary Shaun Donovan said yesterday that President Obama's continuing efforts to "fix a financial system that's broken" meant that the Federal Housing Administration would play an increasingly larger role in mortgages.

"While we prefer to have the private market be more involved, we have asked . . . to expand our authority to provide $400 billion more for the FHA insurance program," Donovan said at a conference of real estate reporters and editors here

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Homeowners report confusing, frustrating loan modification process

2009-06-19T21:01:00.000-05:00

Homeowners report confusing, frustrating loan modification process

To battle foreclosures, the Obama administration launched programs with hopeful names such as Making Home Affordable, but as many homeowners seeking assistance are learning, such programs have added more confusion than help.

Many people look at the criteria for refinancing, loan modifications and assistance, then approach their lenders because it appears they qualify for help. But many find that, for one reason or another, they aren’t getting assistance.

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Foreclosures grind on as lenders fail to modify loans

2009-06-19T19:02:00.000-05:00

June 19, 2009 -- Stephanie Armour -- USA TODAY

The Obama administration's $75 billion program to reduce foreclosures has been beset by backlogs and delays, leading many overstretched homeowners to complain about unreturned phone calls and inaccurate information from lenders, while others say they were denied help for reasons that weren't clear.

Details of the plan were unveiled in early March. The goal is to prevent up to 4 million foreclosures by having banks modify loans into more affordable monthly payments.

Since its debut, the plan has led to offers of more than 190,000 mortgage modifications with lower monthly payments, according to the Treasury Department. During that time, lenders either have started or advanced foreclosure proceedings against more than 1 million homes, according to RealtyTrac. About 20% of those were foreclosed upon and repossessed. The Center for Responsible Lending says 2.4 million Americans are at risk of foreclosure in 2009, and 8.1 million could be over the next four years.

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Obama’s Mortgage Refinancing Program May Be Expanded

2009-06-19T19:00:00.000-05:00

June 19, 2009 -- By Dawn Kopecki and Jody Shenn -- Bloomberg

Fannie Mae and Freddie Mac may get permission to begin refinancing mortgages with loan-to-value ratios above 105 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.

“We’re actively considering how to structure a program that makes sense over 105 percent,” Federal Housing Finance Agency Director James Lockhart said yesterday. He said a ratio of 125 percent “is a number” that’s on the table, though “not necessarily the number we’re going to end up with.”

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Fannie and Freddie May Refi Deeper-underwater Mortgages

2009-06-19T14:33:00.000-05:00

June 19, 2009 -- Seattle Post-Intelligencer

The government may soon let mortgage giants Fannie Mae and Freddie Mac refinance mortgages whose balances are higher than 105 percent of a home's value, according to a Bloomberg report.

"We're actively considering how to structure a program that makes sense over 105 percent," Federal Housing Finance Agency Director James Lockhart said, according to Bloomberg. The story quoted him saying a limit of 125 percent was under consideration, but "not necessarily the number we're going to end up with."

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Local Bank, Sheriff's Office Work To Cut Down Foreclosures

2009-06-19T14:24:00.000-05:00

June 19, 2009 -- WFMZ

MONTGOMERY COUNTY, PA--It's a partnership that could give a lot of homeowners some peace of mind: Chase Bank and several county sheriffs are working together to cut down on foreclosures. As WFMZ's Stephanie Esposito reports, those sheriffs are now delivering good news, instead of delinquency notices.

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Fannie, Freddie in Limbo as Geithner Seeks More Time

2009-06-18T14:42:00.000-05:00

June 18, 2009 -- By Dawn Kopecki -- Bloomberg

Fannie Mae and Freddie Mac will remain in limbo as the U.S. Treasury secretary said the government doesn’t have time now to deal with the future of the two mortgage-finance companies it seized in September.

“We did not believe that we could at this time -- in this time frame -- lay out a sensible set of reforms to guide, to determine what their future role should be,” Treasury Secretary Timothy Geithner told the Senate Banking Committee in Washington today. “We’re going to begin a process of looking at broader options for what their future should be.”

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HUD Offers $58 Million for Housing Counseling

2009-06-16T20:31:00.000-05:00

Funding to help hundreds of thousands of homeowners, homebuyers and renters find and sustain housing

WASHINGTON--The U.S. Department of Housing and Urban Development today announced that more than $58 million is available for a broad range of housing counseling programs to help families find and preserve housing. The funding is an increase of $11 million, or 23 percent, over last year. These grants will be awarded competitively to hundreds of HUD-approved counseling agencies and State Housing Finance Agencies that offer a variety of services including how to purchase or rent a home, how to avoid foreclosure, how to improve credit scores, and how to qualify for a reverse mortgage.

"Now, more than ever, it is crucial that American families make informed decisions about their housing choices," said HUD Secretary Shaun Donovan. "These counseling agencies are also vital to the success of the President's Making Home Affordable Plan which is helping families avoid foreclosure and remain in their homes."

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Chase Opens Homeownership Centers in Chicago

2009-04-09T14:12:00.000-05:00

Advisors will work face-to-face to help keep families in their homes
April 9, 2009 -- Business Wire

CHICAGO--Today, Chase opens the first of its homeownership centers in Chicago to helpfamilies struggling with their mortgage payments. Chase has a total of 24centers across the United States to help borrowers who have a home loan servicedby Chase, Washington Mutual or EMC - all now part of JPMorgan Chase.

The Chase Homeownership Center, located at 1836 N. Broadway in Melrose Park,will be open from 10 a.m. to 7 p.m. Monday through Thursday, 9 a.m. to 6 p.m.Friday, and 9 a.m. to 1 p.m. Saturday. Chase will open a second Homeownership Center on the south side of Chicago in the coming weeks. Customers who wouldlike to receive more information, or who do not live near a center, can call1-866-550-5705.

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