This Thursday the House of Representatives is expected to vote on a bill that would provide much needed help to struggling homeowners. The bankruptcy bill that we have been talking about for well over a year on LoanWorkout.org, HR 200, would allow bankruptcy courts to modify mortgages and slash principles for underwater homeowners.
See Moe’s past bankruptcy blog posts here:
The controversial bill would also shield mortgage servicers from investor lawsuits over loan modifications.
Maxine Waters (D-Calif.), chairwoman of the Subcommittee on Housing and Community Opportunity Hearing said this in her opening statement yesterday.
“I am concerned there isn’t doing enough being done to modify loads and preventing foreclosures,” The chairwoman also expressed concern over the re-default rates. “When modifying loans servicers most ensure it is more affordable than before the modify, it makes little sense to modify a loan and still have it out of the reach of the bar.” she said.
“There are millions of families out there who are struggling and have tried to contact some of the people we have here testifying today,” she said.
A total of nine witnesses testified in from of the two House panels. The first panel the U.S. Department of Housing and Urban Development (HUD), the Office of Thrift Supervision (OTC) , the Office of the Comptroller of the Currency (OCC) and Federal Housing Finance Agency (FHA).
The OCC and the Office of Thrift Supervision regulate some of the largest mortgage servicers in the US.
Joseph H. Evers, deputy comptroller for large bank supervision at Office of the Comptroller of the Currency in a prepared statement said, “We have made much progress in the last year to develop and refine our data collection, validation, and reporting efforts, and our work in this area continues to evolve in response to supervisory needs and changing market trends.”
“We currently are working to provide additional data at a more granular level on the affordability of loan modifications as well as the types of loan modifications being implemented by the largest mortgage servicers. We continue to improve these efforts and to enhance the information we obtain, and we look forward to making the additional information available in future issues of our Report.”
The second panel included CEO’s and executives from mortgage servicers, Owen Financial Corporation, Wells Fargo Home Mortgage Servicing, Bank of America, JP Morgan Chase and Steve Hemperly and Citi.
Steve Hemperly, executive vice president of mortgage default servicing at Citigroup, which holds 7% of the total loans in the US said;
“Our report will show that distressed borrowers serviced by Citi, who received modifications, reinstatements or repayment plans outnumbered those who were foreclosed by more than six to one in the fourth quarter of 2008.”
“The number of borrowers serviced by Citi who received long term solutions, in the form of loan modifications, in the fourth quarter of 2008 increased by approximately 51% compared with the third quarter of 2008.”
Sources:
LoanWorkout.org
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