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Posts Tagged ‘refinance’

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 

Source:
1. U.S. Will Push Mortgage Firms to Reduce More Loan Payments. Peter S. Goodman. NY Times. 11/29/09.
URL: http://www.nytimes.com/2009/11/29/business/economy/29modify.html

 

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
URL:  http://www.nytimes.com/2009/11/29/business/economy/29modifyside.html

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 »

Vulture Funds

Posted by CM on November 25, 2009

I came across this article in the NY Times on Sunday about the fate of Vulture Funds (Troubled Investments).  Here is what is going on now in Wall Street….

  1. Investors are buying discounted home loans from distressed banks.
  2. Mortgages are then refinanced through the government.
  3. Profits are made by reselling government insured loans.
  4. The newly refinanced loans are bundled into securities and sold to investors (like usual).

For those of you who like diagrams….

 graphic vulture funds2

So, evidently all of the risk for these newly refinanced loans falls on the government and then ultimately the taxpayers.  Keep in mind that “Americans are falling behind on mortgage payments in record numbers1.” 

Homeowners are involved here.  They receive a letter stating their principals have been reduced and then have to refinance to get the reduction.  The investors receive a profit when the refinances amount to more than their original $40 Million investment.   Many of the interviewees in the article expressed their concerns about this new strategy and weren’t quite clear where all of this was headed. 

From my understanding;

  • These Vulture Funds are coming from distressed banks, not necessarily from distressed loans.  Yes, the argument is that distressed banks are a victim of distressed loans, but not every single loan is in distress.
  • Principal reductions don’t seem to be targeted toward people with distressed loans or those asking for modifications.  The article didn’t make this issue clear.  It just seems that whatever loans were in the pool are the ones being refinanced.  I don’t believe investors are going around looking for homeowners to help by reducing principals.  Wall Street just doesn’t work that way.
  • This article is a clear indication that the game hasn’t changed at all.  Regulations with teeth haven’t been enacted and the rules of the game haven’t changed either.
  • All we seem to have here is either a different way to play the mortgage game or a new side game to the game that has always been played.

Come on Obama and Geithner, “Yes We Can” do something about this.

Sources:
1.  Wall Street Finds Profits by Reducing Mortgages. Louise Story. New York Times. 11/21/09.
URL: http://www.nytimes.com/2009/11/22/business/22loans.html

Posted in Foreclosure, Green Tree Servicing, Mortgage Servicers, New York Times, PHH Mortgage | 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……

Sources:
1. One in Four Borrowers is Underwater. Ruth Simon and James R. Hagerty. The Wall Street Journal. 11/24/09.
URL: http://online.wsj.com/article/SB125903489722661849.html?mod=rss_whats_news_us&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wsj%2Fxml%2Frss%2F3_7011+(WSJ.com%3A+What%27s+News+US)&utm_content=Google+Reader

 

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? 

Sources:
1. Philadelphia Gives Homeowners a Way to Stay Put. Peter Goodman. NY Times. 11/18/09.
URL: http://www.nytimes.com/2009/11/18/business/18philly.html

2. Administration Widening Pursuit of Financial Fraud. AP. 11/18/09
URL: http://hosted.ap.org/dynamic/stories/U/US_FINANCIAL_FRAUD?SITE=NCAGW&SECTION=HOME&TEMPLATE=DEFAULT

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

McClatchy Investigates Goldman Sachs

Posted by CM on November 3, 2009

My local paper ran some of these stories about McClatchy Newspaper’s investigation of Goldman Sachs.  I included a video from McClatchy about a couple who fought with Goldman Sachs to save their home.  The couple needed financial help after a natural disaster (fire) and could not get a hold of anyone at their mortgage servicer to help them.  Through bankruptcy court, they were able to figure out that Goldman Sachs owned the loan and the court “threatened to impose ‘significant sanctions'” on Goldman if they did not restructure the couple’s loan.  At the end of the clip, Ms. Fabos-Becker said, “It is outrageous that we can’t even know who our lenders are.” 

Video: Couple takes on Goldman

Read the article here

Mortgage Crisis Shows Why Financial Regulation is Needed

Please look at this site from McClatchy, it lists the percentage of mortgages in foreclosure in each state.  When you click further into the state, you can look at metro areas for their foreclosure stats.  Click here

Posted in Foreclosure, Mortgage Servicers, PHH Mortgage | Tagged: , , , , , | Leave a Comment »

10 Easy Steps to Being a Mortgage Servicer

Posted by CM on October 29, 2009

10 Easy Steps to Being a Mortgage Servicer
with a Money Back Guarantee

  1. Become a Business
  2. Open a Line of Credit
  3. Pay $1 Million for 1,000 Loans Worth $100 Million
  4. Use your line of credit to ADVANCE each payment to the investors
  5. Accept monthly payments from the borrowers
  6. Repay your advances with borrowers’ monthly payments
  7. Make Money
  8. Pretend to help customers while you delay reporting defaults
  9. When you finally have to report a default, Foreclose….FAST
  10. Lastly, above all else, play by the CRAs’ Rules so your rating remains high

For more information and details about items 1-10 on being a mortgage servicer, click here

Posted in Foreclosure, Green Tree Servicing, Mortgage Servicers, PHH Mortgage, Short-sales | Tagged: , , , , , , , , | 1 Comment »

A Foreclosure Tsunami Part 1

Posted by CM on September 22, 2009

Hi folks, I’m back from vacation!  I just finished reading Ms. Diane E. Thompson’s written testimony to the U.S. Senate regarding HAMP (Home Affordable Modification Program).  HAMP is a program started by the Obama administration as part of their Making Home Affordable programTHIS IS VERY IMPORTANT INFORMATION: 75% of ALL mortgages in the U.S. are eligible for HAMP!  That said, finding a mortgage servicer who actually participates and handles the program correctly is another story all together.  As usual, the mortgage servicers aren’t really providing the necessary relief for homeowners under HAMP as this testimony highlights and as we already know from our experiences. 

A majority of the issues in this testimony, I have either experienced or read about before.  I will assume the same can be said for you.  What is refreshing and comforting is that at least someone in the U.S. Senate knows it too.  What remains to be seen is whether or not any changes come out of this testimony. 

For the full testimony, Click Here

Here are some excerpts I thought may be of interest to you.  If you are trying to obtain a loan modification using HAMP, please read this testimony in its entirety so that you know what your rights are in this program. 

Foreclosure and Modification Statistics

  • 13 million foreclosures are estimated between the years 2008-2014.
  • Currently, 12% of mortgages are past due and 7% are delinquent.
  • 8% of loans were modified in 2007-2008
  • In most cases, modifications reduced payments but increased the principal balance.

Summary of Loan Modifications

  • In order to avoid a foreclosure tsunami, loan modifications that lower the principal amount is the only viable option.  Even participating mortgage servicers of HAMP are still unwilling to lower the principal amount. 
  • To date, mortgage servicers under HAMP are a) not providing a sufficient number of loan modifications to homeowners, b) modifications offered do not meet the guidelines of HAMP, and c) HAMP still presents serious barriers to mass loan modifications.
  • Homeowners are often not offered a loan modification prior to foreclosure sale.  Furthermore, this testimony advocates that foreclosure proceedings be stopped while in the process of modification.    
  • The Net Present Value model (a model which determines whether the investor will make more money from a modification or foreclosure) should be made available to the public.  Plus, a second independent review and a place to complain should be available when a servicer rejects a loan modification application. 
  • Second liens should be modified with the first lien. 
  • Large servicers such as PHH Mortgage are not participating. 

Sources:
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: www.consumerlaw.org
3. National Association of Consumer Advocates: www.naca.net
4. U.S. Senate Banking, Housing, and Urban Affairs Committee: http://banking.senate.gov/public
5. Making Home Affordable: www.makinghomeaffordable.gov

Posted in Congressional regulation, Foreclosure, Green Tree Servicing, Mortgage Servicers, PHH Mortgage | 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.

 

Sources:
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: www.consumerlaw.org
3. National Association of Consumer Advocates: www.naca.net
4. U.S. Senate Banking, Housing, and Urban Affairs Committee: http://banking.senate.gov/public
5. Making Home Affordable: www.makinghomeaffordable.gov

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 »