The real irony of this story is the same banks that took more than 200 billion dollars of tax payer stimulus money are not delivering on the loan modification promise. What is the hold up? Why aren’t troubled homeowners getting the help they need?
Below is a transcript from the White House website. This speech was given by President Obama on May 20, 2009 before signing the Helping Families Save Their Homes Act:
Let me talk a little bit about the housing bill. The Helping Families Save Their Homes Act advances the goals of our existing housing plan by providing assistance to responsible homeowners and preventing avoidable foreclosures. Last summer, Congress passed the HOPE for Homeowners Act to help families who found themselves "underwater" as a result of declining home values -- families who owed more on their mortgages than their homes are worth. But too many administrative and technical hurdles made it very difficult to navigate, and most borrowers didn't even bother to try.
This bill removes those hurdles, getting folks into sustainable and affordable mortgages, and more importantly, keeping them in their homes. And it expands the reach of our existing housing plan for homeowners with FHA or USDA rural housing loans, providing them with new opportunities to modify or refinance their mortgages to more affordable levels.
A year ago when this plan was unveiled the White House said it would help between 3 and 4 million Americans. As of today, less than 170,000 loan modification have been completed. Compare that to the 6.5 million Americans who are currently late on their mortgage (Courtesy of the Mortgage Bankers Assoc). Something is definitely wrong.
ABC reporter, David Muir, interviewed, under promise of anonymity, a high ranking bank official from one of the nation’s largest banks. When Muir asked the banker, a vice president, what his chain of command instructs him to say when customers ask about mortgage help?
The banker said, “Give them a 1-800 number.”
Muir asked, “And what happens when these customers call the 1-800 number?”
The banker responded, “They get the complete run around.”
Click Here to See the Story and Interview
A local Baltimore couple was interviewed for this piece and they share a similar story. They asked not to be identified in this article. The couple began the modification process in November of 2009. They provided their bank with all of the required paperwork prior to the bank set deadline. The bank instructed the home owners to pay a temporary adjusted mortgage payment while their request was being processed. It is now March and no decision has been made. In fact, they recently received a letter stating that the original financial documents they provided where 90 days old. New documents must be gathered and sent. Really?
Like the banker said, the runaround.
Just what Maryland needs, a failed modification leading to another foreclosure.
For information on loan modifications, go to www.makinghomeaffordable.gov
Comments
I am furious over this industry...I have very close friends who went through something similar and I thought (erroneously) that they just weren'tseeking out the right department or were exaggerating somewhat. What can we do as a people? Any thoughts from readers out there OR from honest mortgage companies out there?
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