After a year of crisis, servicers are increasing the number of “high-touch” loss mitigation staffers. They can underwrite new loans for financially stretched customers and haggle with buyers of homes in foreclosure. But investors say they are still finding deficiencies due to backups of onerous work, skyrocketing costs, and a lack of incentive.
“Some servicers were not even picking up the phone saying ‘are you going to pay this month?’,” said Sadie Gurley, a managing director at Marathon Asset Management in New York.
Disillusioned, investors are looking for help, or simply taking their business elsewhere.
{ 7 comments… read them below or add one }
Hey Moe,
How about the guys who sold puts on the Equity Tranche of Sub-Prime Loans? The big winner runs a hedge fund that made $12 Billion, (that’s right,$Billion with a “B”) in one year for investors in 2007. Thanks to the now infamous “2/20″ formula that compensates most Hedge funds, (2% off the top as the investor money comes in the door and 20% of all profits from the trade before investor payout)this manager made $3.7 Billion in personal compensation for the year and to sweeten the pot, special tax treatment of 60% of his compensation (called carry profits)allowed him to pay capital gains rates of just 15% in income tax on that 60% of this $3.7 Billion in income for one year. To put this in perspective, that amount of money would pay all 80,000 teachers in New York State for three years, including benefits.
If he made $3.7 Billion and his investors made another $12 Billion, that means the investors who funded the loans, including pension funds, lost the same amount. The amount is the equivalent of 80,000 $150,000.00 homes.
I’m with you on the Walmart thing, I love my new job even though there are no medical benefits and my net pay does not cover the cost of gasoline I spend getting to work, greeting all those happy shoppers at the door gives me a reason to go on living! My family is getting used to our mobile home too. Perhaps I will get promoted to management and we can rent a doublewide in walking distance…
The new Hope Now guidelines are a feel-good measure. They are completely voluntary. Why not pass a law with service-level guarantees that require the lenders to perform to a minimum standard?
Funny how the story about Hope Now coming out literally one day after they were caught red-handed lying their a$$es off about the actual number of people they’ve actually “helped”. They were pushing 1.2 million as the number but uh oh……
Hope Now was found to have actually only “helped” out 167k people of which only 35k were mortgage mods. Hope Now immediately shot back saying that the Comptroller only reviewed 40% of their books so the number was off. Fine, if you take Hope Now’s word that those numbers reflect only 40% of what they’ve done, you now have the whopping and impressive number of “helped” up to 417k of which only 87k were mortgage mods. Wow!! By the way, how exactely did Hope Now “help” the 330k people that didn’t get mods? A pep talk maybe?
Hey Hope Now YOU WERE SUPPOSED TO HAVE “HELPED” 1.2 MILLION PEOPLE YOU NITWITS!! YOU JUST ADMITTED THAT YOU HAVE BEEN SYSTEMATICALLY LYING YOUR ASSES OFF!! No it’s not surprising that we’ve been lied to. It’s the fact that not one person is holding these criminals responsible for their lies. This organization has been widely held-up as the shining star of “hope” for millions of financially destroyed families, and nary a word is mentioned of the fraud. We’re watching our country be “equity stripped” right in front of our worn faces, and we can not even rally more than a few American citizens to help STOP this insanity. We’re doomed if we don’t fight back people.
A long time ago there were real men. The kind of men that would unsheath their sword and run through the person who would dare to destroy his family’s well-being. Where are the real men and women willing to stand up for their family and their country and stop this insanity? Where are the protests in the street? Where are the boycotts? Where is the outrage?
it seems most of these organizations are just PR campaigns…I have called to get some more information on how they are able to help and I do not get the impression they are helping many homeowners.
I get the sense most of what is going on with all these potential mods/workouts is a sort of “sit in limbo” approach until the congress passes whatever bail out program they finally agree on getting to signature.
Once the banks/servicers/investors know what their incentive is from the government, i suspect more workouts will begin to happen.
I agree it seems there is not enough noise being made to get the wheels moving in the right direction.
I had suggested a national day of default…
we organise a large scale default on our mortgages and deliver the keys back to the banks or on the steps of congress…nice thought but would lose steam since it would take 3 months to get to that point…..
Actually we could start now and be ready by November.
Well re:Hope Now.. I called Hope Now in November 2007 and was told to default so I would qualify for some advocacy for a loan modification. The same story happened in January 2008. I called in April 2008 and go a whole new senario. The represenative actually explained what Hope Now is and how they can provide support and advocacy to homeowners who want to retain their homes even if they are current. He took my updated financials and sent them to my lender.. Did they help? I don’t know. For me it was just one more “hoop” I felt was out there.
Good luck RJ..
let us know what hope now will actually now do …..
Good luck RJ –
Gator that is the spirit !!!!
read your post on Jun 18th, 2008 at 1:20 am
- I understood completely you train of thought.
I guess for now the banks & the gov’t are playing the waiting game to see who gives in first. I don’t know??? maybe the feds are in huge investigations, maybe everyone is waiting for the elections to be over in November – whatever the case we can not sit & wait – we need to fight, negotiate, whatever we can to save our livelyhoods and our homes.