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loan modification: Government Can Create Modification Programs That Work - 04/26/11 05:06 PM
While HAMP, the administration’s foreclosure prevention program, has been a dismal failure, efforts in Pennsylvania demonstrate that government can create modification programs that work.  And while the Pennsylvania program is dramatically more effective, it’s also much less costly to taxpayers and less of a hassle for lenders to administer. 
 
What the Pennsylvania program demonstrates is that such programs don’t have to be complicated—in fact, the more complex such programs are, the less likely they are to achieve success.  Yes, government can create modification programs that work; they just have to think more creatively and less bureaucratically. 
 
The … (10 comments)

loan modification: Foreclosures Are Coming, Millions of Them - 01/26/11 10:19 PM
 
In an interview today on Fox Business, Neil Barofsky, the special inspector general to the Troubled Assets Relief Program said that foreclosures are coming, millions of them.  The TARP “watchdog” indicated that the government’s foreclosure relief program, HAMP isn’t working; and it now seems obvious to most that it was never expected to work.  Citing uncooperative lenders and servicers, and an unwillingness from Treasury to pressure compliance, Barofsky once again pointed out how the Administration’s promises to help millions of homeowners avoid foreclosure have been a dismal failure.  With the potential for as many as 13 million foreclosures during this … (23 comments)

loan modification: Why Shouldn’t Banks Try Robo-Modification? - 11/02/10 03:09 PM
 
The recent foreclosure scandal, exposing the methods by which lenders attempted to speed up the foreclosure process, has spawned the question: Why shouldn’t banks try robo-modification?  If they were truly interested in modifying loans for those who qualified, and if their staffs were overloaded, it seems logical that they should have assigned some robe-signers to process the applications.  Banks seemed to have had no reservations for approving foreclosures when documentation was missing, and were reported to have forged documents when necessary.  If they were suffering staff shortages, why not apply the same loose standards to the modification process?
 
Of … (41 comments)

loan modification: Are We Ready to Solve the Housing Crisis? - 10/31/10 09:58 PM
With three years of struggle under our belts, are we ready to solve the housing crisis? Are we ready to accept a strategy that could help stabilize housing and begin to get the economy rolling again? Now that housing has become mired in yet another calamity (the the foreclosure scandal), are politicians, economists, pundits, and homeowners ready to take the medicine necessary to get our country back on track? While I’d like to think so, I’ve yet to see any positive action being taken.
 
The U.S. has thrown billions into the failed mortgage modification program, HAMP, the results of which … (80 comments)

loan modification: Monday Morning Quarterbacking and Incompetence: The Government is Expert - 10/26/10 05:23 PM
 
Monday Morning Quarterbacking and Incompetence: The Government is Expert
 
Once again we find that politicians and bureaucrats have failed us.  Speaking at a housing conference in Arlington, Sheila Bair, Chairman of the FDIC, said that banking regulators should have realized that the streamlining and cost cutting done by banks in processing foreclosures must have come at a cost, but those measures were never examined.   According to Bair, “. . . those types of questions were not asked.”
 
Speaking at the same conference, Ben Bernanke, the financial wizard who totally missed the looming collapse of the housing market, said, … (21 comments)

loan modification: HAMP: August Progress Report - 09/22/10 10:25 PM
The government has released the HAMP August Progress Report covering activity through August 31st and the results fall far below both expectations and commitment. To date there have been 448,937 permanent modifications approved, with 663, 538 trial modifications cancelled.
 
And while those receiving a permanent modification have benefitted, there are a couple of potentially troubling facts:
● The median back-end debt-to-income ratio after modification is 63%, a 14.5% improvement for those borrowers, but still far too high to be sustainable.
● The number of trials reported since the July report is 26,628, an indication that the program is winding … (12 comments)

loan modification: Foreclosures Are More Than A Financial Problem - 09/04/10 10:43 AM
Since 2006 Americans have seen the number of foreclosures rise, and the economic damage has been overwhelming, but foreclosures are not just a financial problem. Recognizing the severity of the crisis, the government has put forth several initiatives, some providing aid to banks, their balance sheets deluged with billions in foreclosure inventory, and other plans attempted to help struggling homeowners remain in their homes. However, little has been to actually alleviate the problem, and foreclosures continue at a record pace.
 
Not only did the government’s efforts fail to provide relief, they served to anger many who felt wronged by such … (15 comments)

loan modification: Can’t Make Your Mortgage Payment? Fannie May Says, “Know Your Options” - 08/22/10 05:04 PM
A new Fannie Mae website, KnowYourOptions.com, provides help and answers questions for homeowners struggling to make their mortgage payments. With all the confusion surrounding foreclosure, mortgage modification, and short sales, the site can help keep homeowners away from the “vulture” businesses that spring up to take advantage of unsuspecting homeowners.
 
The recession and housing crisis have caused millions of homeowners to lose their homes through foreclosure, and many of those foreclosures could have been avoided. While the government may have done a poor job of offering solutions to those struggling to keep their homes, Fannie Mae’s new website, KnowYourOptions.com, changes … (2 comments)

loan modification: HAMP Has Seen New Trial Modifications Drop 90 percent Since September - 07/20/10 08:55 PM
The Home Affordable Modification Program, HAMP, has seen new trial modifications drop 90 percent since September, an indication that the beleaguered foreclosure rescue program is reaching the limits of its usefulness. Often criticized for not saving the promised millions from foreclosure, HAMP’s latest report indicates significant declines in the number of new homeowners accepted into the program and a dramatic increase in the number of trial modifications that have been rejected.
 
In reality, it’s always been impossible for the administration to keep 7 to 9 million families from losing their homes; and the emotions and finances of millions of homeowners … (18 comments)

loan modification: Strategic Defaults Will Eventually Crush HAMP - 07/07/10 09:51 PM
Strategic defaults will eventually crush HAMP, the administration’s homeowner rescue plan, as a new study reveals that the average participant is underwater by more than 50 percent. An article in the Huffington Post provides details of a June 24 report released by the Government Accountability Office.
 
With more underwater homeowners aware that It Will Take Years For Home Prices To Return to previous values, strategic defaults will continue to rise. Studies have shown that as home values reach 50 percent or more in negative equity, such as many of those participating in HAMP, the owners are much more likely to … (51 comments)

loan modification: Forget Modification And Move Ahead With Foreclosure - 06/28/10 08:39 AM
Since its inception, the Home Affordable Modification Program has been criticized as too little, too late; and the criticisms have come from all sides of the political spectrum. Put simply, HAMP doesn’t work, never could have, and should be abandoned. It’s time to forget modification and move ahead with foreclosure. Foreclosures will happen anyway; only the pain will be extended over a much longer period, like the current oil slick threatening the entire Gulf coast. Unless we can create a magical formula that will provide jobs and restore the assets of struggling homeowners, avoiding millions more foreclosures and a double dip … (16 comments)

loan modification: Requesting A Loan Modification May Be Financial Suicide - 05/23/10 08:13 PM
As U.S. consumers try to dig their way out of the worst recession in decades, many have sought help from their lender; but requesting a loan modification may be financial suicide. Unfortunately, many struggling homeowners often find the “cure” to be worse than the illness. An article in the SF Chronicle points out how a loan modification not only lowers credit scores, but often leaves the borrower owing thousands in fees and penalties if the modification is denied.
 
When a homeowner is accepted for a trial modification, their payment is lowered below the original contract amount, and their lender will … (12 comments)

loan modification: The Great Loan Modification Hoax - 05/04/10 05:21 PM
In February of 2009 President Obama made a speech in which he promised to help between 7 and 9 million families avoid foreclosure, a promise that if kept might truly have helped stabilize the U.S. housing market. Unfortunately, the promise upon which millions of homeowners have placed their hopes and committed their savings, seems to have been little more than political rhetoric.
 
To address the housing crisis, the President outlined announced the Homeowner Affordability and Stability Plan, a program which although not described as such, would require billions of dollars, would be impossible to administer, and that, in the end, … (86 comments)

loan modification: TARP Watchdog Exposes HAMP Failure As Yet Another Homeowner Rescue Effort Is Announced - 03/26/10 03:16 PM
Little more than a year ago President Obama announced the Home Affordability and Stability Plan in a commitment to save 7 – 9 million homeowners from foreclosure. Under the program, several initiatives were established to accomplish his goal. One of them, The Home Affordable Modification Program or HAMP, begun in March 2009 with initial funding of $75 billion, was intended to help those homeowners in default or at imminent risk of default, by modifying their existing mortgages. Such modifications might involve a lowering of the owner’s mortgage interest rate, extending the terms of their loan, or both.
 
Now, one year … (16 comments)

loan modification: HAMP Unlikely To Save The Promised Millions From Foreclosure - 03/12/10 07:15 PM
A Recent article on Calculated Risk seems to point out that the government’s much touted HAMP loan modification plan will fall far short of meeting its goal of saving millions from foreclosure. The article references an update on the government Making Home Affordable website that lists the following points:
 
● There have been 170,000 permanent modifications granted to homeowners.
● An additional 91,800 permanent modifications have been approved by servicers and are pending borrower acceptance.
● More than 1.3 million homeowners have received offers for trial modification.
● Only 32% of the trial modifications begun at least 3 months ago … (12 comments)

loan modification: Yet Another Revamp Of HAMP - 01/22/10 09:46 AM
In yet another revamp of HAMP, the administration’s program to help homeowners avoid foreclosure, Treasury is weighing some new options. An article in today’s NY Times reports on some of the methods under consideration.
 
One of the stumbling blocks that many seeking foreclosure relief regularly report is the problem of supplying documents to their lender; lenders claim homeowners fail to respond to requests for documents, and borrowers claim their lender is losing the documents. Additionally, some at Treasury seems to fear that many of the “liar loans,” those made without full documentation, may have been made fraudulently. In an effort … (2 comments)

loan modification: Treasury Department Has Just Realized That Loan Modifications Aren't Working - 12/10/09 10:35 AM
While millions of homeowners continue to face foreclosure, the Treasury Department has just realized that loan modifications aren't working. I suppose that someone must be the last to “see the light,” but must that someone always be government?
 
Almost a year into the program and with a couple of million more homes lost to foreclosure, the wizards in Washington are now looking at “improving” their loan modification program. The point they seem to have missed is that we had a Housing Bubble, where home prices were driven up far beyond their value.
 
Offers to adjust interest rates or to … (13 comments)

loan modification: Foreclosure Victims Have No Hope And Their Only Change Is Their Address - 12/03/09 09:23 AM
When the current administration came into power it promised “Hope and Change,” and struggling homeowners, devastated by the rising unemployment and the collapse of the housing market, eagerly awaited the changes that would save them from foreclosure. The previous administration’s Hope for Homeowners had proved more hopeless than hopeful, and the promised relief had never materialized.
 
But January had ushered in a new attitude, and new team that would look out for Main Street, not Wall Street; and hopes ran high. February’s announcement that 7 – 9 million homeowners would be saved from foreclosure let struggling homeowners know that help … (18 comments)

loan modification: Loan Modifications Are Not Working And The Government Doesn’t Get It - 11/30/09 03:08 PM
The Treasury Department has announced yet another effort in its attempt to modify the mortgages of those facing foreclosure. Hoping to convert many of the trial modifications to permanent status, the Government plans to apply pressure to lenders that have been slow to respond. Requiring lenders to report the status of their modification efforts, the Treasury Department intends to make public those lenders who fail to show progress.
 
Wow! This is big news. Now the government is going to point out the “bad guys,” as if we didn’t already know. If that’s the teeth in this “new” incentive, those expecting … (15 comments)

loan modification: Why Can't We Stop The Flood Of Foreclosures? - 08/17/09 07:07 AM
Why can’t we stop the flood of foreclosures? We keep hearing about the failure of the government’s efforts to modify mortgages, and many—this writer included—have questioned the actual intent of such programs. And while the President has talked of saving 9 million homes from foreclosure, the results to date are trivial.
 
What’s the reason that loan modifications aren’t working? Why are lenders seemingly unwilling to lower the outstanding loan balances in an amount sufficient to allow owners to remain in their homes. The numbers show that lenders will generally lose much more from foreclosure than modification—studies have demonstrated that foreclosures … (14 comments)

 

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