Congress has been placing pressure on the lending industry to do something about the foreclosure crisis the nation is facing.
On May 2nd Senator Chris Dodd convened a “homeownership preservation summit” and invited a selection of key mortgage industry players. What the senator proposed was a Statement of Principles that urges lender to use loan modification to help defaulted borrowers. Below are the key notes of his proposal.
Modify and Create Long Term Affordability: If the borrower cannot afford the reset payment (as described above), the services should seek to modify loans prior to reset. The objective of the modification should be to create a permanent solution for the borrower to ensure that the loan is sustainable for the life of the loan rather than for example, deferring the rate to the reset period. Such modification options should include, as appropriate, one or more of the following: Change of Terms, Reduce the Interest Rate, Reduce Principle, Reamortize the Loan, and Escrows.
Surprisingly on May 4th, just 2 days after the summit, the senator announced on his website that all organizations in attendance have now endorsed the principles. Here is a list of those lenders that are going to be pro-active in helping stop foreclosure.
- Bear Sterns
- Citigroup
- Countrywide
- Fannie mae
- Freddie Mac
- HSBC
- JP Morgan Chase
- Litton Loan Servicing
- Mortgage Bankers Association
- Wells Fargo
I will be following these lenders closely to see exactly what they plan to do to help modify loans and stop foreclosure.
{ 16 comments… read them below or add one }
Aloha Moe,
We’ve been trying to reach the Loss Mitigation Department at Option One since early September as our ARM just re-set Nov. 1. Our home value has gone way below what we owe, so we can’t get a refinance (believe me, we’ve tried everywhere). We let Option One know that we would not be able to afford the new mortgage payment after Nov. 1. Starting in early September, we sent certified mailings, faxes (including a fax of our detailed budget analysis which their website requests) and we placed numerous phone calls (all of which are routed to personnel in India). Apparently Option One’s sale to Cerebus (sp?) fell through. A mortgage broker with an “in” to Option One reached his contact and learned that they are not responding to our communications because it is like calling the fire department before there’s a fire. They simply don’t have the personnel to handle the number of loan modification requests like ours which are coming up due to ARM’s resetting. We now wish we’d understood that the loan we got into was at a “teaser” rate. Yes, we signed the paperwork so we are ultimately responsible, but you trust the “professionals” when you’re trying to determine if you can afford the home you want to buy…and we were clearly way too trusting.
Anyway, under the advice of a foreclosure attorney and numerous, numerous mortgage brokers who’ve tried to help us, we have stopped paying our mortgage and are just waiting for the foreclosure notice to arrive in the mail. It seems crazy to me that they would not want to work something out with us, because they will soon own our home and won’t be able to sell it in this depressed market. We’ve paid on time and in full every month for 2 years. I guess that no longer counts for anything in America.
I read your other posts about geting the 2 million of us together for a protest. I once organized a protest of 2,500 Native Hawaiians which caught the attention of CNN and Associated Press. If you are serious, let me know. We will be fine (my husband has a good job and will just rent). But I am concerned about the hundreds of thousands of others for whom these foreclosures are a very serious, crushing blow. My hearts go out to them. We recently watched the wildfires destroy so many homes in southern California. I kept thinking, ‘The fire of foreclosure’ is just as destructive. If only people knew….
Praying for all of us in this boat,
“alohajai”
Can anyone please help. I fell in to foreclosure with option one. it seems that they want you to be in foreclosure. I have tried to workout programs but cannot because they never get back to you. I have set up 3 repayment plans and the payment is double the current mortgage and i cannot afford it. I have given them over 50,000 in the last year. That is broken up into 3 down payments and i am still in foreclosure and owe exactly the same as i did before I gave them the money. I despretely want to save my house. I borrowed the money for the down payments from family and completely depleated my savings. my taxes and insurance were supposed to be included and weren’t. i do not believe I ever recieved one of those right to recision letters, but how do i prove it . I was transfered right after signing with another company. I just had a baby and do not want to lose my house. the next payment is due on the 20th of december and i cannot afford it and that will put me into a sale date again for the 4th time and I will not be able to come up with the huge down payment again. I just gave them 20,000 to put me on a payment plan and i still owe the same amount of money?????????? please please please help.
Hi,
I just want to weigh in on Option 1. I have been trying to work with them since March. I can’t speak with anyone who has the authority to make a decision. I always get the India office, no offense to India, but when I ask for someone in the states, or God forbid I speak with a loan modification specialist, whom we were supposedly assigned to, I am told that the California office is closed (no matter what time of day or night it is that I call. They keep giving me new sale dates (thank God) but no one seems to really know what’s going on. The only official notice that I have received was a sign pasted to my from door in July, stating a sale date. I have not seen anything else official. The latest sale date that I have was December 15, but don’t know what is really going on. Really wish I could speak with someone at Option One in the US who knows what is going on.
Just wated to share my fight with opton One Mortgage and also some facts I have learned along the way.First of all I have been at this since July.Here’s what I know.If you call the service line and get India ask for ext 66535 thats the American office they are open until 4 pm est.We were behind on our morgage one payment in July.I had the money to make a double payment to catch up,I knew that my rate was going to adjust in September and the situation would just get worse.I called the service line and spoke to a lady who told me to make one payment and call back in August to start the Loan Modification process.I did ,that was the worst mistake of my life I should have sent both,however the rep told me that there would be “no problem doing this”.When I called in August to start the modification I was told I had to enter into a “payment arrangement’ to hold the account until the application could be processed.Remember you are just applying for modification they don’t have to give it to you.In fact if they think that you can afford they arrangement payment based on your finances you may not get it.By law they can not take more than 50% of your monthly income for a payment to catch you up ,if your under or near that you might get turned down for modification.Thats what happened to us we recieved a letter stateing we were not eligeable because of the payment plan and that we could afford they new payment.I’ve only been able to reapply because of the rate adjustment in September.3 full points and additional $260.00 in my payment.Plus the $200.00 additional for the payment arragement and my escrow is short for the 4th time all together my payment taxes and insurance included has gone up $537.63 since July of 07 we are now trying for the second time to get a loan mod and are in our 2nd repayment plan.I just sent $2600.00 on Oct 30th and they want another $1760.00 by Dec 13th.Oh thats reminds me if you have an arrangement you have 10 business days including your due date to pay before it will break.You are only allowed 2. I plan on sticking to this plan and prayin that they give us the modification we so desperetly need.Remember I was only one payment behind when this all started.Now if I don’t send $1760.00 on Dec 13th my plan will break and will go in to foreclosure.Good Luck God help us all.
Option one foreclosed for only 3 months behind. I was served our papers 2 days before I was about to send them all 3 months payments plus a fourth months. I called them and got no where so went online and filled out all the stuff on there to get help. Well they finally called and want 10400 dollars over twice my back payments to reinstate the mortgage well we don’t have that much. So I was told within 14 days someone would call me to see what they could to do to work with us. I was shocked we got a call within 3 days. Maybe thats a good sign.. so far no deal but they are waiting on us to supply six months worth of paystubs that I need my employer to give me copies of as I don’t keep that far back.
We were served foreclosure papers on 11/26 and by 12/30 we had a loan mod set up and are just waiting for the papers to sign. The papers are being sent to us but I was told there would be approx. 30 delay in the papers due to the amount of loan mods they are doing right now that department is backed up. Our loan mod lowered our interest rate by 4.5% it will increase for 4 yrs and when it hits it’s highest it will still be .5 lower then what it used to be which was to adjust in Sept up 3.5%. So in the end in 4 yrs our payment will still be lower then it is today. YES I got all this in writing faxed to me signed by the LM that helped us she was wonderful and spoke clear english!! She even said she was sorry for bothering me one day when she called but realized she had answered her own question. I cried the day she called to tell me everything was approved for he loan mod.
That’s great PollyAnne, you must have been beyond relieved!
Moe should put your story over in the success forum, and maybe you can share what you did and who you spoke to so other’s can share in your success, too!
Best of luck to you.
I am in the process of trying to get a loan mod approved with a very nice women that is also helping me at option one. I just sent in all my papers today. She told me not to make any of my payments on my repayment plan while I am trying to get this approved. I am worried that if I do not get approved that I will fall back into foreclosure! I am taking her word for it. Can you pleasse give any words of advice or hope!! I pray everyday that this will get approved.
aloha Kauai, you should go on over to the homeowners forum, the link is above, to the left. Many people who are dealing with Option One can help you.
Optoin One has placed my foreclosure on hold and they have instructed me to save all my money for the down payment on the loan mod. Does anyone know what a typical down payment is for a loan mod??? Also, my principal balance is 639,000 plus they are charging me back interest of about 60,000. I have a current interest rate of about 10%. I know I am screwed. I had a baby and needed to take off work and refinaced and ameriquest said my taxes and insurance would be included and it wasn’t and I was transfered to option one the next day. I am praying for some type of miracle. I am back on track with my job and need them to work with me. Is there anyway that they would give me a lower interest rate or forgive some of the interest???? Can anyone give me some advice?????
Just wanted to let you know we are facing a problem with Option One as welland can not seem to get them to assist us with a logical solution. An initial payment of 15,000 is an outrage- if I had that the two payments wouldn’t be late!!!
Oh my! It’s really a shock to see so many people going through the same thing my husband & I are facing with Option One. We submitted all the paperwork to Option One before the foreclosure date which was on Feb 5th. No one contacted us to let us know that they received our fax and what they decided on doing. Just so happened, my husband called them, due to the fact NO-ONE ever called us to let us know that our home was sold on Feb 07. What & where do we go from here. We are firsat time home buyers and REALLY want to save our home. We even offered to pay th $7,000 fro the repayment option. We are so confrused. We just found out yesterday on our way to work, that they sold our home. If ther’s anyone out there to help, PLEASE help. I can’t eat nor sleep knowing my kids maybe homeless in the next few days. What to do???????????????????
Anthony and Lashonda Robinson,
What state do you live in and if possible can you get the name of the person who bought your home?
Good Morning,
I am currently going through what some people would call a “Living Hell” with Option One. As everyone who is having problems with their mortgage, Option One is less then negotiable when it comes to payment and modification. I was told to keep my house, I would have to send in the back payments, and once the loan resets, I still will owe the remaining balance, and still face foreclosure. In all my years I have never dealt with such incompetence and non-compassion of a human being. This company should go bankrupt, and the people who tell you that you have no alternative but lose your house should never go through what the American public is experiencing. I’m hoping that someone from “Option One has the time to read what the public feels about their company.
Thank you.
WOW, I thought I was just too anxious. trying to work with option one, i have had nothing but frustration. i started 2/25/08 with my hardship letter ( as my payment went from 1462.00 to 2022.00) i am a single grandma raising two grandchildren working foll time nights. i have never missed a payment, however i can not pay this rate. i have talked to christine maldanado in los angeles, ( when i can reach her) and her response is ” we are waiting for your tax records for the property tax” they have been waiting for over 6 weeks now. i called the tax board and they sent the tax bill over two weeks ago? today i opened a letter from option one saying i was in default. this letter was dated 6/3/08 wisting my june payment along with 332.00 late fees less my may payment, ( my june payment is just NOW due). i am NOT SURE if they are really going to help me or not? I was told my may payment is in a ” special account” and to call back tomorrow and talk to someone else, ( as christie maldanado is out of the office for a few days).
Has ANYONE got a “loan modification with option one”?
Now i a m scared, i really want to keep our little home, however i cant keep working 6 days 12 hours a night, i am too old for that…
keep in touch please….
brenda h
We are in the same position. We have been with Option One for 3yrs without a late payment. My husband has never been late on any mortgage. We begin trying to work with them before missing a payment to no avail. We are now missed one payment. We have contacted the Loan Modification department (uh!) My husband had to send a letter to the company’s president to receive a return call. They gave a date when a negotiated would call…he never called. My husban kept calling, now they have given us another date when we should receive a call from a negotiator. I have been reading horror stories on the web about them add large fees, foreclosing and selling homes without the homeowner knowing.
What is being done about this company? What can we do?