2009-09-09 Housing Subcommittee Testimony

[OH-WAMU]

EXCELLENT!
EXCELLENT!
EXCELLENT!
EXCELLENT!

http://www.consumerlaw.org/issues/mo...mittee0909.pdf

I have to give credit to BabyDeeJordan for posting this in one of my posts!

I have trimmed out a LOT of supporting paragraphs and tried to grab the OUTLINE in case someone doesn't want to read all 69 pages. I however, found it to be a very informative read!

WARNING, NOT FULL DOCUMENT! GO TO LINK IF YOU WANT TO READ FULL DOCUMENT!

Progress of the Making Home Affordable Program:
What Are the Outcomes for Homeowners and What are the Obstacles to Success

Written Testimony of Alys Cohen, National Consumer Law Center also on behalf of National Association of Consumer Advocates

Before the United States House of Representatives Subcommittee on Housing and Community Opportunity of the House Committee on Financial Services

September 9, 2009

I. Introduction

A. Problems with Servicers’ Implementation of HAMP Plague Homeowners
Seeking Loan Modifications.

II. Foreclosures Far Outweigh Loan Modifications.

III. Servicers’ Lack of Alignment with the Interests of Investors or Homeowners Contributes to the Failure to Do Loan Modifications.

A. Servicers Have Different Interests Than Investors.
B. Servicers’ Business Model Involves As Little Service As Possible.
C. Servicers Maximize Income in Ways that Hurt Both Homeowners and Investors.
D. Servicers Have Disincentives to Perform Principal Reductions, Even When Doing So Would Benefit the Trust
E. The Possibility of Cure Does Not Explain Servicers’ Failure to Make Loan Modifications in the Current Market.

IV. HAMP Design and Implementation Present Substantial Barriers to High Volume, High Quality Loan Modifications

A. Problems with Servicers’ Implementation of HAMP Plague Homeowners Seeking Loan Modifications.

1. Participating servicers violate existing HAMP guidelines.
2. Servicer staffing and training still lag behind what is needed.
3. Lack of transparency is resulting in summary denials and other unreasonable acts by servicers.

B. Certain HAMP Policies Must Be Changed to Provide Sustainable Modifications and Save Communities.

1. Transparency must be improved. The NPV model for qualifying homeowners must be available to the public.
2. Mechanisms for enforcement and compliance should be adopted.
A- ll foreclosure proceedings must be stopped upon the initiation of a HAMP review, not just at the point before sale.
- Homeowners should be provided with an independent review process when denied a loan modification.
- Homeowners should have access to an ombudsman to address complaints about the process.
- Denials based in part on a borrower’s credit score should be accompanied by an adverse action notice under the Fair
Credit Reporting Act.

3. The HAMP guidelines should be adjusted to provide more meaningful relief to homeowners without reducing their existing rights.
- Homeowners need principal reductions, not forbearance.
- Homeowners suffering an involuntary drop in income should be eligible for a second HAMP loan modification.
- Homeowners in bankruptcy should be provided clear access to the HAMP program.
- Mortgages should remain assumable as between spouses, children, and other persons with a homestead interest in the property.
- Fair lending principles must be ensured throughout the HAMP process.

4. Data collection and reporting should support the best HAMP outcomes
possible.

V. Congress Should Pass Legislation Mandating Loan Modification Offers to Qualified Homeowners Where The Modification Is Consistent with Net Present Value, as well as other measures.

VI. Conclusion

Thank you for the opportunity to testify before the Subcommittee today. The foreclosure crisis is continuing to swell. We are drowning in the detritus of the lending boom of the last decade. The need to act is great. It is clear that HAMP can not do the job on its own and thus additional steps that do not rely on voluntary measures by the mortgage industry are in order. Unless HAMP both increases its reach and mandates principal reductions, Congress should pass legislation to mandate loan modification offers to qualified homeowners prior to foreclosure where the modification is consistent with net present value, and also should allow bankruptcy judges to modify home loans in bankruptcy and consider further reforms to the servicing industry. We look forward to working with you to address the challenges that face our nation’s communities.




Again, thank you BabyDeeJordan!

[Social Apocalypse]

Woo Hoo! GO ALYS! GO ALYS! This lady is the BOMB. If you watch her when she testifies, she is cool, collected and direct. She is unflappable. She sits among the "big execs" and calmly calls them what they are to their face and backs up her testimony with fact, examples and solutions. She is absolutely TOP SHELF in my book.