Yes, loan modifications and loan workouts are happening and it appears that most lenders and servicers have stepped up to the loss mitigation plate. Or have they?
Hope Now, led by US Treasury Secretary Henry Paulson, has just reported record loan workouts in April.
It is only common sense, that every month we are going to start to have more loan workouts, as servicers scurry to retrain their poorly trained employees on the technique of actual loss mitigation. This is no easy task, since they have to deprogram their staff on the old way of collecting over due mortgage payments, which was nothing more than debt extortion.
The problem that seems to NEVER be addressed, is that ALL these servicers and lenders do not have the capacity to perform the loan modifications, that are needed to really make a difference in this housing crisis.
They are operating at 10-25% of where they truly need to be in terms of staff and operations. And until they hire the necessary employees and management to truly assist the borrowers that are reaching our for help, then this is all just lip service and nothing more than PROPOGANDA!
I spoke with a Countrywide negotiator (who will remain anonymous) this past week. This nice young lady explained to me that she was just swamped with homeowner cases and that at the current moment, she had 852 files that were in her pipeline.
852 files!
How can any one person handle that many files, homes, people, and families? 852 potential foreclosures. 852 potential people that may lose their American Dream.
I asked the Countrywide negotiator how can she take care of all those files? She told me that there is no way she can adequately take care of all these cases, and that many will lose their homes just because she can’t get to them in time. By the time she hangs up with one person, there are already another 10 messages on her phone, 10 people waiting on hold and she has already forgot about case #335 and case #789.
In reality, #335 and #789 are people. People and families that are suffering in their homes. Hoping that they will be one of the lucky few who get help and can save their homes.
Little do these folks know that they are just a number in a foreclosure machine that is gobbling up homes and people daily, and that they will most likely be just another casualty of lip service and unaccountability.
Let me ask you all this. Where is the “hope now” for these people?
Now, its is time for propaganda 101. Courtesy of Hope Now.
Washington, D.C. (May 30, 2008) – HOPE NOW, the private sector alliance of mortgage servicers, counselors, and investors that is working to help prevent foreclosures, announced today that mortgage servicers provided loan workouts to approximately 183,000 homeowners in April 2008, the highest monthly amount since the program was begun in July 2007. Since July 2007, the industry has helped almost 1.6 million homeowners avoid foreclosure through workouts which include loan modifications and repayment plans.
“These numbers clearly demonstrate that HOPE NOW is succeeding at helping homeowners avoid foreclosure and stay in their homes,” said HOPE NOW Executive Director Faith Schwartz. “Foreclosure benefits no one: the borrower, community, lender and investor all lose,” Schwartz added. “HOPE NOW has every incentive to help troubled homeowners hold on to their homes, and the alliance will continue to do everything possible to reach and help as many as possible.”
The April report from HOPE NOW estimates that on an industry-wide basis:
• Mortgage servicers provided loan workouts for approximately 183,000 at-risk borrowers in April. This is an increase of 23,000 from the number of workouts in March 2008 and is the largest number of workouts completed in any month since HOPE NOW’s inception.
• The total number of loan workouts provided by mortgage servicers since July 2007 has risen to 1,558,854.
• Approximately 106,000 of the prime and subprime loan workouts conducted by mortgage servicers in April were repayment plans, while approximately 77,000 were loan modifications.
A summary table with all the April results can be found at
http://www.hopenow.com/upload/misc/files/AprSummaryTable.pdf
HOPE NOW also announced today that a separate survey of subprime adjustable rates mortgages determined that:
• Approximately 603,000 subprime loans were scheduled to reset between January and April 2008.
• 30,545 (5.0 percent) of these loans have already been modified. Nearly 63 percent of these modifications are for 5 years or longer.
• 273,000 (45 percent) of the subprime adjustable rate loans that were current at reset were paid in full when the homeowner refinanced the loan or sold the property.• A limited amount — 927 (0.3 percent) — of the loans that were current at their date of reset have started the foreclosure process.
HOPE NOW is an alliance between counselors, mortgage market participants, and mortgage servicers to create a unified, coordinated plan to reach and help as many homeowners as possible. For more information on HOPE NOW, and to see the full membership of the Alliance, please visit www.HOPENOW.com.
The Homeownership Preservation Foundation’s HOPE Hotline (888-995-HOPE), which is available 24 hours a day 7 days a week, receives on average more than 4,000 a day. This is far in excess of what the mortgage lending industry has ever had to field. There is no cost to borrowers for using HOPE NOW and the 1-888-995-HOPEHotline.
In addition to the HOPE Hotline, HOPE NOW is coordinating a nationwide campaign to reach at-risk borrowers. So far, HOPE NOW has sent approximately 1.2 million letters. About 20 percent of homeowners receiving the HOPE NOW coordinated letters have contacted their servicer, 10 times more than the routine 2-3 percent response rate that servicers receive when they send their own mailings.
In the past 3 months, HOPE NOW has connected 4,000 homeowners with their lender and/or a HUD-certified housing counselor at workshops in 11 different cities in California, Georgia, Illinois, Pennsylvania, Ohio, Massachusetts, Minnesota, Wisconsin, and Indiana. HOPE NOW is continually looking for additional locations to host these workshops so that more troubled borrowers can be helped.
