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Archive for the ‘Treasury’ Category

Firms Will Be Embarrassed

Posted by CM on November 29, 2009

Yes, you read the heading correctly.  It seems that Obama and Geithner can’t seem to get our beloved mortgage servicers to effectively modify delinquent home loans.  That is one heck of a surprise!  We all know from experience that mortgage servicers will stop at nothing to get a foreclosure processed. 

On Monday, Obama will initiate a new campaign aimed at embarrassing mortgage firms (I hope mortgage servicers are included) into creating permanent modifications that reduce monthly payments.  Unfortunately, reducing principal balances was not mentioned in the article

Those servicers who have not made enough permanent modifications will be called out and embarrassed.  Recall that Geithner’s entire idea with his monthly mortgage servicer performance reports was to embarrass those firms that haven’t made many modifications.  That hasn’t worked very well and now it seems Geithner and his team is trying another embarrassment model for the servicers.  I don’t know about you, but when all the administration can think of is different ways to embarrass mortgage servicers, I don’t hold out much hope for this new campaign. 

A guess a bit of a change to HAMP is that the puny incentives ($1000 per modification) will not be paid until the modification is permanent and monthly payments are reduced.  To date, only 2,000 out of 500,000 or 0.4% of loans have been permanent modifications1.  If that is the only plan for pushing servicers in the right direction, I fear that that will only push servicers right out of HAMP all together.    

The word inside the Treasury Dept. is that HAMP is not really working but no one seems poised to create a new plan.  I have 2 ideas, 1. Reduce Principal Amounts and 2. One Year Freeze on all Foreclosures. 

Luckily the Senate is getting restless and they are pretending like they will create a National Foreclosure Prevention Program (like Philadelphia’s) where every delinquent home owner gets to have a court-supervised mediation1. Or they want bankruptcy judges to amend mortgages1.

It all boils down to the fact that servicers have zero incentive to modify loans and have more incentives to do a trial modification while still collecting delinquent fees. 

“I don’t think [mortgage servicers] ever intended on doing permanent loan modifications1.” Margery Golant 

1. U.S. Will Push Mortgage Firms to Reduce More Loan Payments. Peter S. Goodman. NY Times. 11/29/09.


For more about the run around between mortgage servicers and their customer’s regarding modifications see Goodman’s related article:
Winning Lower Payments Takes Patience and Luck.  11/29/09


Posted in Foreclosure, Green Tree Servicing, Mortgage Servicers, New York Times, PHH Mortgage, Treasury, white house | Tagged: , , , , , , , , | 1 Comment »

Servicer Report through October 2009

Posted by CM on November 25, 2009

As always, here is your monthly Mortgage Servicer Performance Report through October 2009 from the Treasury Dept.

The pretty graphs show that housing inventory is increasing while mortgage rates, home prices and home sales are all dropping. 

PHH Mortgage is still not listed as a participant in this program.  According to some, PHH Mortgage is one of the tenth largest mortgage servicers.  Why aren’t they participating? If they are, why aren’t they visible on this report? 

See the report here

Posted in Foreclosure, Green Tree Servicing, Mortgage Servicers, PHH Mortgage, Short-sales, Treasury | Tagged: , , , , , , | Leave a Comment »

Calling the FBI

Posted by CM on November 25, 2009

1 in 4 UNDERWATER, You probably heard this yesterday, I sure heard it and read it in many places.  Roughly 23% of American Homeowners owe more than their house is worth1 and good luck refinancing, modifying or selling that bottomless pit.  “40% of borrowers who took out a loan in 2006 are underwater and 11% of borrowers who took out a loan in 2009 are underwater1.”  

This is a very sad and sorry state in our current homeownership world.  I can honestly say that I am not surprised.  My own home was underwater and impossible to sell and a foreclosure resulted from that.  We should expect to see another wave of foreclosure statistics just dedicated to those attributed to homes underwater.  What more is there to say on the subject?  How bad does this situation have to get before someone will do something? 

Treasury still doesn’t get it, Over the summer I wrote a lot of letters on a variety of subjects pertaining to our foreclosure crisis.  I finally got a generic letter in reply late last week.  You all have read the petition letters and I even posted one letter to Geithner on this blog.  You all know that I write about specifics (I hope you do!).  This letter is so generic and not even worth the paper it was printed on.  They didn’t even reply to any of my concerns.  The Treasury just doesn’t get it.  With our elected and government officials passing off generic form letters for replies to concerned citizens, will we ever get anything done to regulate mortgage servicers?  See the letter here

Calling the FBI, I have received some comments about people calling the FBI regarding their mortgage servicer, PHH Mortgage.  I say, Go For It!  So, all of you, think about your situation and if you think the FBI might be interested, well why don’t you call too!  I thought about my situation and I don’t think the FBI would care if PHH refused short sale offers for my house.  I could be wrong……

1. One in Four Borrowers is Underwater. Ruth Simon and James R. Hagerty. The Wall Street Journal. 11/24/09.


Note, As a result of The National Consumer Expo, I am excited to add a new link to this blog!  Please check out the Alabama Consumer Law Blog.  The blog contains incredibly useful articles related to our fight against mortgage servicers.  I plan to learn from the blog!

Posted in Foreclosure, Mortgage Servicers, PHH Mortgage, Treasury | Tagged: , , , , , | 5 Comments »

Between Homeowners and Banks

Posted by CM on November 18, 2009

The NY Times has an article online today about Philadelphia’s “conciliation conferences.”(1)  Basically when you are about to be foreclosed on, you and your bank meet at the courthouse and work out a solution.  The article did not say whether principal amounts are reduced or how many homeowners redefault.  The article did say that monthly payments are reduced in most cases.  Well, as we know, reducing monthly payments means nothing if your principal is increased and if there is some hidden trigger that will balloon your payments all over again.  This is just more of the same bank/mortgage servicer game playing.  Until I hear that principals have been reduced, I’m not buying what their selling. 

On a related note, The Justice Department has created a “Financial Fraud Task Force.”(2)  The Treasury Dept is involved and they are going to investigate mortgage fraud among other things.  How do we sign up? 

1. Philadelphia Gives Homeowners a Way to Stay Put. Peter Goodman. NY Times. 11/18/09.

2. Administration Widening Pursuit of Financial Fraud. AP. 11/18/09

Posted in Foreclosure, Mortgage Servicers, New York Times, PHH Mortgage, Treasury | Tagged: , , , , , , | Leave a Comment »

Modifications and Foreclosures in the News Again

Posted by CM on November 12, 2009

Ok, we have lots of news on the modification/foreclosure realm today. 

First, I came across this article yesterday about mortgage modification programs.  Alan Zibel for the AP wrote that Obama’s HAMP plan has started reaching “1 in 5 homeowners.”(1)  But, as we know, most servicers keep up with the foreclosure process while doing a modification.  Also, judging by your comments, modifications seem to result in foreclosures later.  I thought another section of this article was more important to our issues.  Zibel touched on a class action lawsuit in Minnesota filed by homeowners that said HAMP “failed to give proper notice when they were rejected [for modifications] or the right to appeal [the rejections].”(1)  The Judge rejected the suit and said, “the federal government has never made loan modifications an entitlement.”(1) 

What Judge Montgomery said basically sums up exactly what we are up against in the legal court and the court of public opinion.  When I first starting complaining about PHH Mortgage, I was told, “you agreed to pay for your house didn’t you?”  I said yes, but, shouldn’t I have some sort of consumer protections if something happens and I cannot pay for my house anymore?  The premise for my petition letters came from the above conversation.  As you see, we are facing a steep battle from people who think if we signed the loan papers, we should pay and that is it. 

Second, Foreclosures dip in October.  I didn’t even have to read the article to know exactly what they are talking about, because of HAMP, modifications are being started and foreclosures are being stalled.  That is all, foreclosures will rise again, I promise.  Anyway…Foreclosures dipped, but filings were “up 19% [from last year]” and “1 in every 385 homes received a [default] notice this month.”(2)  Wow, that is great news!  Those numbers sure do make me feel better, don’t they make you feel better?  Those numbers are crazy.  1 out of 385 is not a good statistic whatsoever.  Give me a break. 

The top ten foreclosure states in order from top to bottom are…..Nevada, California, Florida, Arizona, Idaho, Illinois, Michigan, Georgia, and Utah.(2)

Third, here is the MHA (Making Home Affordable) Mortgage Servicer Report through October 2009.  Enjoy.  What can I tell you about it?  It has 5 pages instead of 2.  There are more graphs showing downward trends with home prices and upward trends of housing inventory.  Fancy Fancy!  Other than that, PHH Mortgage is still not listed on there although it does say that servicers servicing Fannie loans are eligible to participate.  Here’s to crossing our fingers that PHH will one day participate. 

Last but not least, the best editorial I have read in a while came from the NY Times today.  More Foreclosures to Come.  Need I say more?  The editorial called for real modifications with principal loan reductions.  We have heard this before, yes, from the National Consumer Law Center.  The editorial goes on to say that, “another 2.4 million homes will be lost [to foreclosure] in 2010 and home prices will be reduced by 10%.”(3)  Recall above that I said most modifications will end in foreclosure, well the editorial said that, “most troubled borrowers will ultimately not qualify for help, and bad loans will be in foreclosure.”(3) 

The editorial continues, HAMP “has been flawed from the start and has no teeth to compel lenders to participate.”(3) 

Finally, “American Homeowners need an antiforeclosure plan that works.”(3) 

1. Housing Plan Reaches 1 in 5 Borrowers. Alan Zibel. Associated Press. 11/10/09.

2. Foreclosures Dip in October. J.W. Elphinstone. Associated Press. 11/11/09.

3. More Foreclosures to Come. NY Times Editorial. 11/12/09.

Posted in Congressional regulation, Court Filings, Foreclosure, Green Tree Servicing, Mortgage Servicers, New York Times, PHH Mortgage, Treasury | Tagged: , , , , , , , | 2 Comments »

Servicer Report through September 2009

Posted by CM on November 3, 2009

Sorry that I am late about posting this report.  It’s just me being “cynical sally” in thinking that this report really doesn’t mean much of anything at all. 

This is the Making Home Affordable Servicer Performance Report through September 2009.  PHH Mortgage is not listed on this report and has never been listen on this report.  The tiny writing at the bottom lists all the GSE (Government Sponsored Enterprise, which I believe are loans bought by Fannie or Freddie) servicers and PHH is not listed. 

I am fearful that if you are working with PHH on doing a HAMP modification that you are really not doing a HAMP modification. 

See the servicer report here

Posted in Foreclosure, Green Tree Servicing, Mortgage Servicers, PHH Mortgage, Treasury | Tagged: , , | Leave a Comment »

A Foreclosure Tsunami Part 3

Posted by CM on September 22, 2009

Excerpts from Diane E. Thompson’s written testimony to the U.S. Senate, Click here for full testimony

HAMP Recommendations

  • Mandate affordable payments
  • Limit fees charged
  • Permit principal reductions
  • Needs more transparency
  • Foreclosures should be stopped while in HAMP review
  • An ombudsmen should be available for homeowner complaints

HAMP Violations

  • HAMP prohibits a waiver of legal rights.  Servicers are still seeking waivers or admission of default, both prohibited under HAMP guidelines.
  • All homeowners who request HAMP review are entitled to one even if you are not in default.
  • HAMP forbids any upfront payments as a precondition to review or trial modifications.
  • HAMP requires that no foreclosures be initiated and no foreclosure sales be completed during a HAMP review
  • Homeowners encounter barriers when negotiated a modification.
  • Servicer staff have no clue about HAMP

Suggested HAMP Guidelines Adjustments

  • Homeowners need principal reductions, not forbearance.
  • An involuntary drop in income should qualify you for a second HAMP review.
  • Those in bankruptcy should have better access to HAMP.
  • Requirement for second liens to be modified simultaneously as the first.
  • Federal law should require that mortgage servicers provide homeowners with contact information for a real person with the information and authority to answer questions and fully resolve issues related to loss mitigation activities for the loan. 
  • Transparency should provide information about the loan and its servicing history.


1.  Preserving Homeownership: Progress Needed to Prevent Foreclosures.  Written testimony of Diane E. Thompson, National Consumer Law Center and on behalf of National Association of Consumer Advocates.  Before the United States Senate Committee on Banking, Housing, and Urban Affairs.  7/16/09.
2. National Consumer Law Center:
3. National Association of Consumer Advocates:
4. U.S. Senate Banking, Housing, and Urban Affairs Committee:
5. Making Home Affordable:

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, J.P. Morgan Chase, Lehman Brothers, Mortgage Service Providers, Mortgage Servicers, PHH Mortgage, Treasury | Tagged: , , , , , , , | Leave a Comment »

Making Home Affordable

Posted by CM on September 18, 2009

On September 9, 2009 The Treasury released the second Making Home Affordable Program Servicer Performance Report through August 2009. Click here for the report
Assistant Secretary for Financial Institutions, Michael S. Barr, provided written testimony to Congress about stabilizing the housing market.  Click here for the testimony

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, Mortgage Service Providers, Mortgage Servicers, PHH Mortgage, Treasury | Tagged: , , , | 1 Comment »

PHH has sold all their mortgages

Posted by CM on September 6, 2009

According to SEC filings dated June 2, 2009; it appears that PHH through Chesapeake Funding has sold ALL of their mortgages.  However, they have retained their servicing rights. 
PHH sold their mortgages for $1 Billion to: J.P. Morgan, Bank of America, Citigroup, Wachovia, Scotia Capital, and RBS.     

See the full SEC filing here

Posted in Foreclosure, Green Tree Servicing, J.P. Morgan Chase, Mortgage Servicers, PHH Mortgage, Treasury | Tagged: , , , , , , , , , , | Leave a Comment »

Making Money as a Mortgage Servicer

Posted by CM on September 4, 2009

By Coleen Martinez

On August 5th, 2009, the Associated Press published an article about lawsuits against mortgage servicers1.  Here are a few key quotes from that article, “Servicers earn a quarter to a half percent on the value of the loans they service.” And “servicers also make money through late fees and/or foreclosing.”  Well, this is how they make their money.    

Hypothetical example:

  • PHH Mortgage pays $1 million to Bank of America for the right to service a loan portfolio of 1,000 loans with a total balance of $100 million. 
  • The portfolio has an estimated average life of 7 years. 
  • The servicing fee on the $100 million is .25%, which generates income of $250,000 a year.
  •  It only costs PHH Mortgage $50 a year to service each loan, or $50,000 in total.
  • PHH’s net income is $200,000 a year for 7 years or $1.4 million. 
  • Therefore, after 7 years, PHH Mortgage has recouped their original investment of $1 million and made a $400,000 profit. 

Hypothetical example continued with late charges:

  • The rate of return on investment is 9.2% before late charges.
  • If a late charge of 5% of the payment is collected from just 1% of the borrowers, the rate of return on the investment goes from 9.2% to 10%.
  • If late charges can be collected from 5% of the borrowers, the rate of return exceeds 12%.   

Both examples were written close to verbatim from Maureen McGrath’s testimony to the U.S. House of Representatives.  (I added PHH Mortgage and Bank of America, Ms. McGrath’s testimony stated “firms” instead of actual companies.  I also added the $1.4 million net income and $400,000 profit so you would not have to get your calculators out!) 

 Ms. McGrath was kind enough to alert me to her testimony and send me a copy.  Click here for her full testimony.  Maureen McGrath is the founder of the National Advocacy Against Mortgage Servicing Fraud.  She testified before Congress in 2004.      

1. AP IMPACT: Government Mortgage Partners Sued for Abuses.  Daniel Wagner. AP. 8/5/09.

2. Testimony of Maureen McGrath on behalf of National Advocacy Against Mortgage Servicing Fraud.  Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.  United States House of Representatives.  Field Hearing on “Broken Dreams in the Poconos: The Response of the Secondary Markets and Implications for Federal Legislation.”  6/14/04.

Posted in Congressional regulation, Court Filings, Foreclosure, Green Tree Servicing, Mortgage Service Providers, Mortgage Servicers, PHH Mortgage, Treasury, white house | Leave a Comment »