PLEASE ONLY POST - Articles, Official Letters, Testimony, Rules and Regs. Moe - perhaps a Sticky is in order ?

[ama125]

Originally Posted by CW California

BofA will take the 75K divided by 12 months for the monthly.

Thanks CW! I feel a little better now, and sleepy! Off to bed for me.

[hope67]

Originally Posted by ama125

You must remember one thing here, the only way to get the 2nd modified is if the first has already or is going to be modified. That means, they already have chosen not to go the foreclosure route. They'll be determining whether it is worth it to take the lump settlement now, or whether they will collect more over the long term by modifying. By modifying, we're talking about 30 to 40 years worth of time for that house price to recover. This is why I seriously doubt they will extinguish anyone's 2nd unless mandated to do so.

ama125, the calculation for the 1st could be ok to modify it, but the 2nd is a whole new ball game. For example, due to a low property market value the 2nd could be totally an unsecured loan! In addition, as I mentioned earlier they will have an estimate as to the probability of the borrower defaulting again within a certain period of time.

I think they will use some kind of a calculator to determine whether to modify or extinguish the 2nd.

[luvmyhorse]

ama125 after you apply can you tell me how they use the net? I am self imployed and I have a lot of tax deductions, including my gigantic mortgage and re taxes.... I won't have enough income if they use my net. I keep searching for this information but can't find it.
will they add back in some of my deductions, like mortgage interest, so I at least have an income they will work with?

[ama125]

Originally Posted by luvmyhorse

ama125 after you apply can you tell me how they use the net? I am self imployed and I have a lot of tax deductions, including my gigantic mortgage and re taxes.... I won't have enough income if they use my net. I keep searching for this information but can't find it.
will they add back in some of my deductions, like mortgage interest, so I at least have an income they will work with?

They use gross income, not net. This is from the Treasury guidelines:

Monthly Gross Income:
The borrower’s Monthly Gross Income is the amount before any payroll deductions includes wages and salaries, overtime pay, commissions, fees, tips, bonuses, housing allowances, other compensation for personal services, Social Security payment, including Social Security received by adults on behalf of minors or by minors intended for their own support, annuities, insurance polices, retirement funds, pensions, disability or death benefits, unemployment benefits, rental income and other income.
Monthly net income can be used for preliminary screening and qualification. If used, the servicer will need to multiply net income by 1.25 to get to an estimate of Monthly Gross Income.

[ama125]

Came across this personal debt evaluator tool: Evaluate Your Debt - MSN Money

Could be useful in determining your DTI before and after modification.

[CW California]

Ama
Here is the article about the original Hope Program that Moe had orginally on the website.
HOPE for Homeowners - not dead yet - Mar. 25, 2009

[THANKS2U]

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Another avenue to pursue for voicing the UGLY TRUTHS about the corrupt executives of B of A, as well as, whistle blowing about the bottom feeding negotiating employees at Bank of America, who practice constant Fiduciary NEGLIGENCES ! In order to destroy good faith borrowers and watch us wither away off their cooked up balancing books....


U.S. Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP)

U.S. Office of the SIGTARP : Contact Us : SIGTARP Hotline


Our voices must be constanly heard, otherwise, we will be constanly ignored !!!

================================================== ================================================== ==============================================

[jet-a]

Hey Everyone,

Here is an article on H4H and what they are doing to update it:

RPT-UPDATE 1-U.S. plans third redo of key housing aid effort | Reuters

[Riley18]

Originally Posted by THANKS2U

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Another avenue to pursue for voicing the UGLY TRUTHS about the corrupt executives of B of A, as well as, whistle blowing about the bottom feeding negotiating employees at Bank of America, who practice constant Fiduciary NEGLIGENCES ! In order to destroy good faith borrowers and watch us wither away off their cooked up balancing books....


U.S. Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP)

U.S. Office of the SIGTARP : Contact Us : SIGTARP Hotline


Our voices must be constanly heard, otherwise, we will be constanly ignored !!!

================================================== ================================================== ==============================================

Thanks for the contact information. I sent an email and plan on calling them tomorrow. The more people let them know what they are going through on a personal level the better.

[pdsfoley]

OK I emailed....lets see if we get a response!!!

[CW California]

Originally Posted by jet-a

Hey Everyone,

Here is an article on H4H and what they are doing to update it:

RPT-UPDATE 1-U.S. plans third redo of key housing aid effort | Reuters

Hi Jet
Long time no see. Yea I'm pretty sure this program will never be right.

[lecia11]

August 20, 2009
Countrywide Loses Ruling in Loan Suit
By GRETCHEN MORGENSON

A federal judge in Manhattan has rejected an argument by Countrywide Financial seeking certain protections from investor lawsuits under new legislation intended to encourage modifications of home loans.

Countrywide, the big mortgage company, had argued that the legislation automatically voided its pledges to buy back loans from investors if those loans were modified for troubled borrowers.

The ruling is a win for holders of mortgage-backed securities who sued Countrywide in December after the company, now a unit of Bank of America, agreed to modify thousands of loans in a settlement with state attorneys general. The opinion, by Judge Richard J. Holwell of Federal District Court in New York, was made public on Tuesday.

The case against Countrywide is being closely watched by pension funds, insurance companies and other investors in mortgage securities who contend that loan servicing companies that agree to change the terms of mortgages are breaching contractual obligations to owners of those loans.

Investors who own mortgage securities receive interest and principal payments from borrowers over the life of the loans. When servicing companies modify those loans, investor payments are typically reduced.

“I view this as an opening salvo and a demonstration that investors do have contractual rights, even when it is politically unpopular,” said William A. Frey, one of the investors who brought the lawsuit. “This is ultimately going to be one of many legal battles over who should pay the hundreds of billions of dollars in losses on mortgages.”

Bank of America, which took over servicing of the investors’ loans when it bought Countrywide in 2008, is defending the case. It argued that the matter belonged in federal court and that any contractual obligations to repurchase modified loans were trumped by the Helping Families Save Their Homes Act of 2009. Under that law, servicing companies that agree to modify loans receive some protection from liability arising from the loan changes.

Judge Holwell ruled that the immunity granted under the legislation did not prevent Countrywide’s investors from trying to enforce their rights under the mortgage securities contracts. The investors must prove that Countrywide’s pooling and servicing agreement covering their loans does indeed require it to repurchase mortgages the bank modifies, the judge said, ruling that the case belongs in state court.

Shirley Norton, a spokeswoman for Bank of America, said it was reviewing the order and considering its options. “The court did not rule that the safe harbor is inapplicable,” Ms. Norton said, merely that it did not fall under federal jurisdiction.

Investors’ lawyers hailed the decision.

“This is a first step in a decision by a federal judge that says even after the servicers’ safe harbor was enacted and even after all the wrangling in Congress, we are still going to allow people to enforce their contract rights when it is appropriate,” said Owen L. Cyrulnik, counsel at Grais & Ellsworth in New York, which is representing investors in the suit against Countrywide.

The lawsuit was filed in December after Bank of America struck a predatory lending settlement with attorneys general in 11 states. In that deal, the bank agreed to modify thousands of mortgages written by Countrywide, providing $8.4 billion in loan aid to an estimated 400,000 Countrywide borrowers.

Under the terms of the settlement, Countrywide said it would cut principal balances on some loans and reduce interest rates on others. Rates could decline to 2.5 percent, depending upon a borrower’s ability to pay, and remain at that level for five years.

But it turned out that Bank of America owned only a small portion of the mortgages it had agreed to modify. Investors who owned the largest share of the loans had not agreed to the settlement and would bear the brunt of the reduced payments.

Two investment funds holding Countrywide mortgages sued Bank of America, contending that the regulatory deal ran afoul of promises Countrywide had made when it issued the mortgage securities.

The funds, Greenwich Financial Services Distressed Mortgage Fund and QED L.L.C., are owned by Mr. Frey, who contended that the mortgage securities contained pledges by Countrywide to repurchase from investors any loans it agreed to modify. On later mortgage securities, Countrywide changed the agreements, eliminating the language about buying back modified loans.

According to the lawsuit, which is asking for a declaration from the court to make Countrywide live up to its contracts, some 374 mortgage pools issued by Countrywide contain language pledging to buy back modified loans from investors.

The case highlights the potential for conflicts of interest in the loan servicing business. Loan servicers have a duty to investors not to do anything that jeopardizes the income stream to holders of the securities.

But servicers are often units of large banks that also make home loans. Investors in mortgage securities are increasingly concerned that the companies may put their own interests ahead of those of their servicing customers when they modify loans.

As the mortgage crisis has deepened, servicers have also come under immense pressure from the government to modify loans. The goal is to keep borrowers in their homes and curb the flood of foreclosures, but changes to loan terms can put servicers at odds with the investors they have a duty to serve.

[Horsegirl]

Originally Posted by lecia11

August 20, 2009
Countrywide Loses Ruling in Loan Suit
By GRETCHEN MORGENSON

A federal judge in Manhattan has rejected an argument by Countrywide Financial seeking certain protections from investor lawsuits under new legislation intended to encourage modifications of home loans.

Countrywide, the big mortgage company, had argued that the legislation automatically voided its pledges to buy back loans from investors if those loans were modified for troubled borrowers.

The ruling is a win for holders of mortgage-backed securities who sued Countrywide in December after the company, now a unit of Bank of America, agreed to modify thousands of loans in a settlement with state attorneys general. The opinion, by Judge Richard J. Holwell of Federal District Court in New York, was made public on Tuesday.

The case against Countrywide is being closely watched by pension funds, insurance companies and other investors in mortgage securities who contend that loan servicing companies that agree to change the terms of mortgages are breaching contractual obligations to owners of those loans.

Investors who own mortgage securities receive interest and principal payments from borrowers over the life of the loans. When servicing companies modify those loans, investor payments are typically reduced.

“I view this as an opening salvo and a demonstration that investors do have contractual rights, even when it is politically unpopular,� said William A. Frey, one of the investors who brought the lawsuit. “This is ultimately going to be one of many legal battles over who should pay the hundreds of billions of dollars in losses on mortgages.�

Bank of America, which took over servicing of the investors’ loans when it bought Countrywide in 2008, is defending the case. It argued that the matter belonged in federal court and that any contractual obligations to repurchase modified loans were trumped by the Helping Families Save Their Homes Act of 2009. Under that law, servicing companies that agree to modify loans receive some protection from liability arising from the loan changes.

Judge Holwell ruled that the immunity granted under the legislation did not prevent Countrywide’s investors from trying to enforce their rights under the mortgage securities contracts. The investors must prove that Countrywide’s pooling and servicing agreement covering their loans does indeed require it to repurchase mortgages the bank modifies, the judge said, ruling that the case belongs in state court.

Shirley Norton, a spokeswoman for Bank of America, said it was reviewing the order and considering its options. “The court did not rule that the safe harbor is inapplicable,� Ms. Norton said, merely that it did not fall under federal jurisdiction.

Investors’ lawyers hailed the decision.

“This is a first step in a decision by a federal judge that says even after the servicers’ safe harbor was enacted and even after all the wrangling in Congress, we are still going to allow people to enforce their contract rights when it is appropriate,� said Owen L. Cyrulnik, counsel at Grais & Ellsworth in New York, which is representing investors in the suit against Countrywide.

The lawsuit was filed in December after Bank of America struck a predatory lending settlement with attorneys general in 11 states. In that deal, the bank agreed to modify thousands of mortgages written by Countrywide, providing $8.4 billion in loan aid to an estimated 400,000 Countrywide borrowers.

Under the terms of the settlement, Countrywide said it would cut principal balances on some loans and reduce interest rates on others. Rates could decline to 2.5 percent, depending upon a borrower’s ability to pay, and remain at that level for five years.

But it turned out that Bank of America owned only a small portion of the mortgages it had agreed to modify. Investors who owned the largest share of the loans had not agreed to the settlement and would bear the brunt of the reduced payments.

Two investment funds holding Countrywide mortgages sued Bank of America, contending that the regulatory deal ran afoul of promises Countrywide had made when it issued the mortgage securities.

The funds, Greenwich Financial Services Distressed Mortgage Fund and QED L.L.C., are owned by Mr. Frey, who contended that the mortgage securities contained pledges by Countrywide to repurchase from investors any loans it agreed to modify. On later mortgage securities, Countrywide changed the agreements, eliminating the language about buying back modified loans.

According to the lawsuit, which is asking for a declaration from the court to make Countrywide live up to its contracts, some 374 mortgage pools issued by Countrywide contain language pledging to buy back modified loans from investors.

The case highlights the potential for conflicts of interest in the loan servicing business. Loan servicers have a duty to investors not to do anything that jeopardizes the income stream to holders of the securities.

But servicers are often units of large banks that also make home loans. Investors in mortgage securities are increasingly concerned that the companies may put their own interests ahead of those of their servicing customers when they modify loans.

As the mortgage crisis has deepened, servicers have also come under immense pressure from the government to modify loans. The goal is to keep borrowers in their homes and curb the flood of foreclosures, but changes to loan terms can put servicers at odds with the investors they have a duty to serve.

All I can say is WOW! Although I understand the investors position, we are in the middle of a serious crisis!!! This "win" just sealed the fate for more homeowners to go into foreclosure. Where is this going to end????

[AzGryffindor]

Judge: Bank Must Explain Loan Policies - Money News Story - KPHO Phoenix

Judge: Bank Must Explain Loan Policies

Judge Orders Wells Fargo Executive To Testify In Court

Peter Busch
Reporter, KPHO.com
POSTED: 10:50 pm MST August 19, 2009
UPDATED: 7:16 am MST August 20, 2009

PHOENIX -- A federal bankruptcy judge has ordered a top Wells Fargo executive to testify in court about the bank's loan modification policies.The order came in response to a Phoenix woman's complaint that Wells Fargo had ignored her modification request."I sent them everything they asked for, and then when I called to follow up they said, 'What paperwork? What modification? We don't know what you're talking about,'" said Bobbi Giguere. Giguere said she applied for a modification after she lost her job in December.

"I've got a 15-year-old boy that's depending on me to raise him, and he wants to stay here," she said.Instead, she said she received a notice of foreclosure while she thought she was still trying to work out a deal with Wells Fargo. Now Judge Randolph Haines wants a senior officer at Wells Fargo to defend the charges. Bankruptcy attorney Randy Nussbaum said it is very unusual for a judge to issue such an order."The judge is trying to send a message to Wells Fargo and other banks that they need to pay better attention to customers who want to modify their home loans," said Nussbaum. Wells Fargo responded by issuing a statement from Mary Coffin, the bank's head of home mortgage servicing."We appreciate the court giving us the opportunity to share our servicing practices, which include working with all customers facing hardships -- even if they declare bankruptcy -- until every reasonable option to prevent foreclosure has been exhausted," read the statement.

In a phone interview, Coffin said Giguere's case is very complex because her circumstances changed after she initially applied for the loan modification. However, she said the bank could have offered better customer service. "We definitely could have communicated better," said Coffin. The Wells Fargo executive was scheduled to appear in court this Thursday, but the judge gave them an additional two weeks to prepare their case.

[ugh_2009]

Regarding modification and unemployment; Found this link on the hopenow website -

Lost jobs spurring foreclosures | Wichita Business - Kansas Business | Wichita Eagle

Hope Now, a government-backed group of mortgage lenders, has established a task force to look at how to best help unemployed borrowers; one strategy involves creating new types of loan modifications. The Obama administration is also studying the issue as it considers how to make its foreclosure prevention program, known as Making Home Affordable, more effective.

Many housing experts say it will take more than the $75 billion the Obama administration has already said will be spent on foreclosure prevention. Several economists at the Federal Reserve Bank of Boston have proposed creating a government lending or grant program for unemployed borrowers, lowering their payments for up to two years while they look for work. Such a program could cost $25 billion annually and help 3 million homeowners, lowering their payments by 50 percent on average, according to the economists' proposal.

[lecia11]

Frustration rising over mortgage relief
Government's latest effort to stem rising tide is mired in problems
By John W. Schoen
Senior producer
updated 10:40 a.m. PT, Thurs., Aug 20, 2009

After months of dead ends, rejections and runarounds from bank representatives, Dan Binder is still in loan modification limbo.

When Binder lost his job as a media researcher, he and his wife left their southern California home in July 2008 and relocated to North Carolina where he found a new job in the media business.

Since then, he’s never missed a payment on the three-bedroom home in Riverside County, Calif., he said, though it's lost about half its value since he bought it in 2005 for $418,000. When his wife lost her job after the move, he called his lender, Wells Fargo, to see if the bank could rewrite the loan to lower the monthly payments.

Since then, he said, he’s gotten conflicting responses from multiple bank representatives, one of whom said he was days away from a new loan that was subsequently rejected.

At one point, after assurances that he submitted all the appropriate paperwork, he was told a form was missing. When he provided it, he was told the remaining paperwork was more than 30 days old and he would have to update and resubmit each document. At another point, he said, he was told his file showed a sizable credit card debt he didn’t owe.

After his latest rejection he asked for an explanation.

“They said the notes from the investors (holding the mortgage) said, ‘You spend too much on food,’ � he said.

If all this sounds familiar, it's because homeowners around the country have been jumping through similar hoops with the same fruitless results.

Nearly two years after the federal government’s first program to slow the relentless rise in the pace of home foreclosures, the latest attempt, known as Making Home Affordable, is turning out to be another painful disappointment for millions of Americans at risk of losing their homes.

Dozens of e-mails from msnbc.com readers report months of futile effort to modify their loans. The list of problems includes misdirected calls, lost paperwork and conflicting advice from multiple representatives for the same lender.

A Wells Fargo spokeswoman said the company can't comment on individual customer's loans due to privacy restrictions. But she said the company is "working with all of its customers who experience hardships and need assistance with their mortgage payments up the point of actual foreclosure sale.�

“As the government guidelines have changed and as we have gotten more options to help people, there has been some communication confusion that we are working to absolutely get on top of and correct for customers,� she said.

HUD-approved housing counselors — the frontline professionals trying to help borrowers modify mortgages — have expressed frustrations with a variety of roadblocks, bureaucratic snafus and ongoing confusion about the program.

“Even if (the homeowner) gets hold of somebody, that person might not necessarily understand the complexity of (the program),� said Helene Raynaud, an executive at the National Foundation for Credit Counseling, an umbrella group that certifies and sets standards for housing counselors. “Counselors end up talking to different people as well, which makes it very difficult. Depending on who they talk to, and the level of seniority and the level of training and the different servicers (they deal with), they get completely different outcomes."

Downward spiral
Despite recent signs of a bottom in the housing market, the pace of foreclosures shows no signs of slowing.

More than 13 percent of homeowners with a mortgage are either behind on their payments or in foreclosure, the Mortgage Bankers Association said Thursday. As of June, more than 4 percent of all borrowers were in foreclosure and about 9 percent had missed at least one payment. A separate report found that more than 272,000 borrowers were at some stage of foreclosure in July, up 8 percent from June and 55 percent from July 2007, according to RealtyTrac, which maintains a national database of foreclosure filings.

The continuing rise in foreclosures delays any meaningful recovery in the U.S. economy, in part because housing typically leads the economy out of recession. Although there have been recent signs of life in home construction and housing sales, they have been weak and from extremely depressed levels. Every new foreclosed home increases the unsold inventory on the market and cuts into demand for new construction.

Foreclosed homes sold in distressed sales or auctions also push nearby home prices lower. Unless the pace of foreclosures can be slowed or stopped, millions more homeowners who are current on their loans will be forced "under water" — owing more than their house is worth. Those homeowners become new candidates for default. One recent research report from Deutsche Bank estimates that roughly half of all U.S. homeowners will be under water by 2011.

Falling home prices also destroy billions of dollars of consumer wealth as homeowners watch their home equity evaporate. That loss of consumer spending power creates another major headwind to any economic recovery.

The collapse of home prices in high foreclosure neighborhoods also slows economic activity by forcing owners to make tough choices when they sell their house. Readers in high-foreclosure areas report that they're unable to relocate for a new job, buy a bigger house for an expanding family or downsize for a planned retirement because they can’t afford to sell their home at a loss.

When Carol Hardee’s daughter Laura died last year, she faced an uphill battle selling the daughter's Atlanta home, which was purchased in 2000 for $150,000. In February Hardee got an offer for $140,000. But with so many foreclosed properties in the neighborhood, the appraisal came back at just $75,000, and the deal fell through.

“There was a house just around the corner from her — it was like a three- or four- bedroom house — that sold for $25,000,� she said.

Hardee said she was unable to work out a loan modification with her lender, and the house eventually sold at a foreclosure auction for $100,000, which still left her with some equity to settle her daughter’s estate.

“I had no choice,� she said. “I had to sell the house. There were bills to pay with it.�

Frustration with mortgage relief efforts also has led desperate homeowners to fall victim to a variety of foreclosure "rescue" scams. Since April, the Federal Trade Commission has brought 14 cases over these schemes, while 23 state attorneys general and other agencies have taken action against 178 companies. Last year, reported incidents of all forms of mortgage fraud hit an all-time high — up 26 percent from 2007, according to the Mortgage Asset Research Institute.

Making Home Affordable is supposed to offer troubled borrowers two possible solutions. The Home Affordable Modification Program (HAMP) is designed to lower payments on existing loans by cutting the interest rate and stretching out the term. The Home Affordable Refinance Program (HARP) gives borrowers who are current on their payments but “under water� a chance to refinance into a new loan for the same amount, with lower payments.

The program pays incentives of several thousand dollars for each modified loan to mortgage servicers, which often are not the same as the lenders who hold the mortgage.

Lenders and servicers report their own frustrations with the MHA program, which was unveiled by the Obama administration in March with no advance notice to allow these companies to gear up and train workers. As recently as last month, key components of the program were still not in place, and some of the initial guidelines limit the program’s "potential to help homeowners," according to a July report from the Government Accountability Office, the investigative arm of Congress. The report also found that "a number of HAMP programs remain largely undefined."

Though many servicers had already increased staff to work on troubled loans, they've been overwhelmed by the volume of applications for affordable loans.

“The number of calls coming in is staggering,� said a representative from one of the 10 largest servicers, who asked not to be identified because she was not authorized to speak publicly. “You’re talking about call after call after call after call after call of people in bad economic circumstances needing attention for their loan.�

Servicers say they also have been frustrated by the tepid response to their efforts to reach out to homeowners at risk of default. The servicer representative who asked not to be identified said her company sent out one round of 45,000 packages to homeowners believed to be at risk; only 15 percent of them responded.

Staffing is also an issue at the Treasury’s Homeownership Preservation Office, which was set up in November to address the sharp rise in foreclosures. As of mid-July, the office still had no permanent executive in charge, according to the GAO. Eleven positions had been filled with permanent employees and three with temporary workers borrowed from other agencies while 17 positions remained vacant, the GAO said.

The Making Home Affordable program was proposed by the Obama administration and enacted by Congress after two previous government-sponsored efforts, the Hope Now Alliance and the Hope for Homeowners program, failed to make a significant dent in the foreclosure rate. Hope Now, launched in October 2007, has modified several hundred thousand mortgages, although the “redefault� rate from this first round of modifications ran as high as 50 percent.

The Hope for Homeowners program, launched in July 2008, was expected to reach 400,000 distressed mortgage holders. At first the program was hampered by cumbersome terms and red tape, and only one homeowner got help. Terms were loosened in November without any meaningful impact. This month, the government announced it is rewriting the program again.

The unchecked rise in foreclosures also is destroying the value of assets backed by mortgages that are held by banks and private investors. So far, most investors have refused to take that loss upfront and reduce the loan amounts for homeowners who owe more than their house is worth. Though most major lenders and servicers have signed on to the MHA program, the decision to make a loan more affordable or forgive some of the principal amount is entirely voluntary.

“(Investors) have already suffered this loss: They’ve suffered it on paper,� said John Taylor, president of the National Community Reinvestment Coalition. “They’re waiting for this loss to begin to dissipate as the housing market recovers. What it’s doing, though, is continuing to exacerbate the foreclosure problems and drag down the economy.�

That deep recession has amplified the pace of foreclosures. When the mortgage market began melting down in late 2006, many of those in default were subprime borrowers and others who were sold adjustable loans that “reset� to unaffordable payments. Now, with 7 million jobs destroyed by the housing-led recession, lost paychecks have become a much thornier problem for groups working to slow the pace of foreclosures.

“The (MHA) program is still not fitted to people who have experienced a severe reduction in income,� said Raynaud of the National Foundation for Credit Counseling,

That has cast doubt on just how many homeowners may ultimately get help. The White House has estimated that as many as 40 percent of the more than 10 million homeowners who are likely at risk of default and foreclosure could be helped. But the GAO, in its July report, found that estimate “problematic.�

The servicer representative who asked not to be identified estimated that only 20 percent of the loans serviced by her company were good candidates for modification or refinance. Under current guidelines, borrowers must show they can devote 31 percent of their income to the new monthly mortgage payment. Some servicers say that’s too high, and have suggested to the Treasury that the threshold be lowered to 25 percent to qualify more homeowners.

For whatever reason, voluntary efforts to modify loans have proceeded at a snail's pace. As of the end of July, only 9 percent of an eligible 2.7 million borrowers had seen their mortgages modified under the new program, according to the latest Treasury data. Bank of America, for example, one of the largest holders of home mortgages, had modified only 4 percent of eligible borrowers as of last month. Some lenders had not modified a single loan.

That has raised question about the need for tougher measures to determine how aggressively servicers are working to modify loans.

“What was the lever to mandate and hold them accountable?� said Taylor. “I just don’t see that. It keeps returning to what is the fundamental flaw in (former Treasury Secretary Henry) Paulson’s plan and now in (Treasury Secretary Timothy) Geithner’s: that it’s voluntary by nature.�

In its July report, the GAO agreed.

“No comprehensive processes have yet been established to assure that all borrowers at risk of default in participating servicers’ (mortgage) portfolios are reached,� the report said.

The government's "carrot" approach to stopping foreclosures — offering $50 billion in incentives to servicers to modify loans — was adopted after the financial services industry successfully fought back a powerful "stick" that would have granted bankruptcy judges authority to modify the terms of a mortgage loan from the bench. Judges can do that with any other form of consumer debt in a bankruptcy proceeding but not mortgages.

Congress proposed the so-called “cramdown� provision several times in the past two years, including separate bills introduced in the House and Senate in January. But for now, there are no proposals to revive the bankruptcy provision or adopt other measures to force lenders to modify mortgages.

“At some point we have to realize is that the voluntary efforts haven’t worked,� said Kathleen Keest, a senior policy counsel at the Center for Responsible Lending. “It’s time to make it mandatory, but that can’t happen without Congress acting.�

© 2009 msnbc.com Reprints

URL: Frustration rising over mortgage relief - Reinventing America- msnbc.com

[hope67]

This is a good site to get a list of homes sold in your area, they will instantly email you a list of homes sold in your area and it's free, it will include the address, the number of rooms, square footage, distance from your house and the prices. I have used this site for years. I usually select the reason for inquiring "I'm simply curious about my home value"

www.housevaluehunt.com

[SillyWorld]

Mortgage Delinquencies Hit New Record

WASHINGTON (Aug. 20) - With the recession throwing thousands of people out of work daily, more than 13 percent of American homeowners with a mortgage have fallen behind on their payments or are in foreclosure.
The record-high numbers released Thursday by the Mortgage Bankers Association are being driven by borrowers with traditional fixed-rate mortgages, rather than the shady subprime loans with adjustable rates that kicked off the mortgage crisis. As of June, more than 4 percent of all borrowers were in foreclosure, while about 9 percent had missed at least one payment.
And the layoffs keep coming. Lockheed Martin Corp. said this week it's handing out about 800 pink slips in its space systems division, and audio conferencing company Polycom Inc. said it will cut about 80 positions.
New jobless claims rose last week to a seasonally adjusted 576,000, the Labor Department said Thursday. While the recession, measured by the nation's total economic output, is likely over, most economists expect layoffs and foreclosures to keep rising for many months as companies remain in cost-cutting mode.


"Their confidence has been shattered," said Brian Bethune, chief U.S. financial economist at IHS Global Insight. "They are going to be very conservative. They don't want to be blind-sided by a false dawn economy."
Nee Salam, 56, lost his engineering job at an automotive electronics supplier south of Atlanta more than a year ago.
At the time, he said, "I was thinking the job market was going to change right away." But it hasn't.
Since then, he's been working as a consultant, earning less than half his old salary of $115,000. His wife has been cleaning houses to keep the family afloat.
But after draining their savings and retirement accounts, the couple have missed four payments on their $636,000 mortgage. Their request for a loan modification from OneWest Bank (formerly failed IndyMac Bank) was denied because the couple's income was too low. A OneWest representative declined comment.
As banks unload foreclosed properties at deep discounts, they are attracting homebuyers back into the market. On Friday, the National Association of Realtors will release July home sales data, and economists expect it to show the fourth-straight monthly sales increase.
While there have been signs that prices are stabilizing, some economists say that's a temporary respite. "We don't think we've seen a bottom yet in home prices because of the foreclosure problem," said Michelle Meyer, an economist with Barclays Capital.
The worst of the trouble is still concentrated in California, Nevada, Arizona and Florida, which accounted for 44 percent of new foreclosures in the country. Nearly 12 percent of all loans in Florida were in foreclosure, the highest in the country, followed by Nevada at 9 percent.
Loan delinquencies among borrowers with prime, fixed-rate mortgages grew from the first quarter to the second in all 50 states, with the biggest jumps in Wisconsin, Illinois, Utah and West Virginia.
President Barack Obama has pledged to fight the problem, but its foreclosure prevention program, known as "Making Home Affordable," is off to a disappointing start. As of July, only about 10 percent of eligible borrowers had signed up.
When homeowners don't have much income left, there's little that can be done to help. Cindy Kennedy, 44, ran a successful cleaning business in Allentown, Pa., for seven years. But she lost most of her customers once the recession hit.
Kennedy paid more than $1,700 to a California company that promised to help modify her mortgage. But the company stopped returning her calls in June, and she suspects she has been scammed.
She and her longtime companion stopped paying on their $840-a-month mortgage in February and their house has gone into foreclosure. They attended a mediation conference in county court Wednesday with their lender but are not optimistic about saving their home.
Now making $120 a week as a part-time supermarket cashier, Kennedy says she commiserates with her co-workers, some of whom are also facing foreclosure.
"We talk about it and laugh," she said. "It's not really a funny situation, but sometimes you have to laugh to keep your sanity, so you don't make yourself nuts."
—
AP Economics Writer Christopher S. Rugaber contributed to this report from Washington. Associated Press Writer Michael Rubinkam contributed reporting from Allentown, Pa.

[jinksy]

Homeowners tell how banks failed to modify mortgages
Borrowers still have little chance of getting payments lowered.





By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — Nearly three years into the deepest U.S. housing slump in generations, lenders are modifying only a small number of problem mortgages, and rising foreclosures are restraining the economy's recovery.
The Obama administration has stepped up pressure on lenders and their mortgage servicers, who act as bill collectors on behalf of investors who own mortgage bonds. The administration on Aug. 4 unveiled the first of what will be monthly "name and shame" exercises, publishing data on the loan-modification efforts of about three dozen companies.

The administration thinks that about 2.7 million U.S. homeowners are at least two months behind on their mortgage payments, roughly equal to the population of Kansas. Yet only 9 percent of eligible borrowers had been offered trial loan modifications through June.

McClatchy's Washington Bureau received calls and e-mails from borrowers across the nation in response to a recent story about the "name and shame" effort. In subsequent interviews with them, a common theme emerged: Virtually all say they were encouraged, directly or indirectly, by their lenders to fall behind on their mortgage payments in order to qualify for loan modifications. Then the modifications never came, however.

These borrowers burned through retirement savings, destroyed their credit ratings and suffered mental and financial hardship. Here are some of their stories:

'I FEEL LIKE ALICE IN WONDERLAND'
A work-from-home psychotherapist and Realtor, Helen Rudinsky, who's now 53, bought property in the nation's capital in June 2004. At the height of the housing boom, she took out an interest-only loan, offered for pricier homes and marketed as virtually risk-free because of climbing home values.

A few years later, she gave birth to a boy who was diagnosed with autism. She's temporarily moved to Bend, Ore., seeking easier access to expensive testing and therapy for her child.

Rudinsky contacted Wells Fargo last October about mortgage options because her payment of $2,500 a month was set to leap by $1,000 this August. She said that a Wells Fargo employee advised her that only loans that fell behind on payments were reviewed for modification.

Rudinsky had never missed a payment, had a credit score of 770 — anything higher than 600 is considered good — and put down $130,000 when she bought her home, clear evidence that she was a reliable customer. She took the employee's response as a suggestion to miss payments, and as a solution to her problem.
"I got behind, and then it spiraled out of control," she said.

Assigned a loan negotiator, Rudinsky called many times a week but got nowhere. She followed a checklist to ensure that all necessary documents were with the lender, but it was never enough, she said.

"Every time I call them, they either say they need more documents or that I am fine and I should hear from them," Rudinsky said. "I've talked to over 50 Wells Fargo people around the country, and I am starting to wonder if I will ever get anywhere."

In May, she was told that she was approved for a program with interest payments potentially as low as 2 percent, she said. More documents, more back and forth, and Rudinsky said she was assured that things were on track and that the foreclosure process was on hold. To her shock, nearly 10 months after her initial call to Wells Fargo for help, her home suddenly headed for auction. Her frantic calls and e-mails were ignored.

The sale was scheduled for 10:15 a.m. Aug. 4. Rudinsky raided her retirement funds to pay $30,795 in a last-ditch move that saved her home minutes before the auction. Days later, Wells Fargo called again, demanding that she make good on her loan or lose her home, she said.

"I don't know what to do anymore. I feel like Alice in Wonderland, because whatever you do, it isn't enough," Rudinsky said. "It's so absurd. It feels like a Third World country. I can't believe this is happening here in the United States."

Wells Fargo had modified just 6 percent of its eligible loans through June. Kevin Waetke, a spokesman for Wells Fargo, declined to comment on the specifics of Rudinsky's case but denied that the company encouraged mortgage delinquency.

"I can assure you that Wells Fargo has comprehensive training in place, we have this guidance readily available and we advise customer service representatives to tell them to make their payments," Waetke said.

'I CAN'T START OVER'
In 2001, sales representative Cynthia Steigner, who's now 51, bought a three-bedroom 1927 home in Riverside, Calif., using a conventional 30-year fixed-rate mortgage. When the economy soured late last year, she lost her job and couldn't pay her bills. She contacted her lender, IndyMac, and was told that she'd get no help until she fell four months behind on payments, she said.
"I needed the help then, not four months later," Steigner said. Nevertheless, she followed instructions, fell behind and still got no help, she said. Instead, she filed for personal bankruptcy. Once the courts completed her case early this year, her lender sought her out to discuss a modification again.

The Federal Deposit Insurance Corp. had seized IndyMac in July 2008. Its mortgage assets were transferred to OneWest Bank last March. The new lender sent Steigner a loan-modification agreement May 6. It offered a new mortgage payment of $1,093 a month, a reduction of almost $500.

Steigner sent two months of payments in a bank-drafted certified check dated May 22. On June 8, it was returned with a letter that said the bank draft had to say "cashier's check."

Steigner had the check reissued as an official cashier's check and sent it back. It was returned to her again on June 25 with a letter that said that the loan modification campaign had expired.

Soon after, a note was posted on Steigner's front door that said that her home would go to auction Aug. 13. She hired an attorney late last month and threatened to sue OneWest Bank for breach of contract. After that and queries to the bank from McClatchy, her home was pulled off the block on Wednesday, though it's still at risk of being sold.

"They gave me the loan modification, and then they reneged on it, and now my house is going to auction. And it puts me through the ringer," Steigner said. "It's the daily chase: What do I have to do to get them to hear me?"

OneWest Bank doesn't have its own spokesman; it hired the San Francisco-based public relations firm Sard Verbinnen for that.

"She was denied because she did not return a signed modification agreement," said Diane Henry, the hired spokeswoman.

"That's not true," said George Bosch, legal administrator for Edward Lopez Law Offices in Los Angeles. Bosch provided a copy of the signed letter and the FedEx receipt for when it was shipped.

Henry also said that Steigner's case was complex and was being "re-reviewed."

Meanwhile, if she loses her home, Steigner fears, it'll be the last one she owns.

"Am I ever going to buy another house? Am I going to be able to? I can't start over," she said. "There are no jobs, no nothing."

'A LOAN ... THAT WAS GUARANTEED TO FAIL'
Phil Stubblefield, 61, arrived in loan-modification hell quite by accident. His ex-wife died of heart failure April 20, and her Sacramento, Calif., home and Countrywide mortgage passed to their daughters, one of whom was in college and the other starting medical school. As students, each had limited income.

Stubblefield reached out in May to Bank of America, which had bought the disgraced Countrywide in January 2008, as it faced bankruptcy because of problems with its loan portfolio. Stubblefield sought to modify the loan on the property in order to stay current amid unusual circumstances.

"Virtue was met with no help at all. The only recommendation was, 'We can help you when the loan goes into default,' " said Stubblefield, an Amtrak train conductor in California's capital. "That's when I said, 'That's easy; then they'll talk to us.' "

After the mortgage payment became two months late in June, the girls started receiving what Stubblefield dubs "nasty-grams." Getting authorization to speak for his daughters, he tried to negotiate a lower interest rate to reduce payments enough for him to help, or to have some portion of the loan forgiven.

"I was waiting for them to turn around and say, 'What can you do for us?' There was no coming together, no negotiation," he said. "It was 'Sell the house,' and that's when I came back and said, 'Don't you read the newspapers? There are 40,000 foreclosures in Sacramento and a 19-month turnaround on (real estate) listings.' "

What especially irks Stubblefield, who worked for eight years as a mortgage broker, are the comments from lenders that they're doing everything possible to keep people in their homes and out of foreclosure.
"It comes off to me that it's just window dressing and speech that doesn't translate to anything," he said. "No action."

Stubblefield's ex-wife had a mortgage payment of about $1,850 a month, more than half of her take-home income from a state government job. Until lending standards became unhinged from 2004 to 2007, conventional wisdom was that lenders wouldn't underwrite loans with payments that exceeded 35 percent of borrowers' take-home pay.

"They put her in a loan to begin with that was guaranteed to fail," Stubblefield said.
A Bank of America spokesman took Stubb
lefield's loan information from McClatchy but didn't comment.

'I'VE BEEN PROMISED AND PROMISED AND PROMISED'
Frank X owns the "worst house in a nice neighborhood" in a New York suburb. He and his wife are Wall Street veterans, and they shared their plight only on the condition that their surname be withheld in order to protect their privacy. His wife didn't want her first name used, either.

The 40-something couple bought a three-bedroom ranch house in February 2004 on a "pick your pay" loan that allowed them to choose each month whether to pay just interest or principle also. The original payments were around $1,800 a month, but have ballooned to $2,908.
Three years ago they had a son, and his wife went on maternity leave. She later returned to work part time just as the bottom started falling out of the financial sector. Her hours were slashed. Frank, a financial consultant who works from home, also saw his income drop with the slump, and he feared that his wife might get laid off.

Late last year, they contacted Wachovia, a national bank based in Charlotte, N.C., that Wells Fargo purchased around that time, to see what could be done in case of a layoff.

A bank representative, Frank said, suggested that they miss a couple of payments in order to qualify for loan modification with an interest rate as low as 2 percent. With a credit score in the 700s, they found the suggestion unattractive.

However, they'd lost more than half their income, lacked enough equity in the home to refinance and their daughter was about to head to a state college, downsizing dreams of private school. The couple took a leap of faith and stopped paying; they haven't stopped falling yet.

"Every month that I called back, we're told something is going to happen," Frank said with a New York edge in his voice.

In June, they were told that programs were being set up for people "exactly like you with good payment histories."

What was offered, however, was a lower payment for only three months, followed by a big balloon payment and a drop in their credit score. They said no thanks.
In late July, Frank was promised that a new program would be out in days. Then it was to be August; now, maybe September. His wife asked the mortgage servicer to stop calling her office because she lacks privacy to discuss the matter, yet threatening calls keep coming to her there several times a week.

"I've been promised and promised and promised. I've robbed Peter to pay Paul, and we're still in this situation," Frank said. "If what their own representative told me (last year) was true, they would have already done something for me."

Homeowners tell how banks failed to modify mortgages | McClatchy

[jet-a]

Originally Posted by CW California

Hi Jet
Long time no see. Yea I'm pretty sure this program will never be right.

I know...TELL me about it!!

[luvmyhorse]

I applied for the home modification over the phone today. They directed me to the hope for home owners website, not the making home affordable website....

I hope that this is not just a refinance option that is going to destroy my credit....

Anyone know why they are directing me to the Home for Homeowners website?

[ama125]

Originally Posted by luvmyhorse

I applied for the home modification over the phone today. They directed me to the hope for home owners website, not the making home affordable website....

I hope that this is not just a refinance option that is going to destroy my credit....

Anyone know why they are directing me to the Home for Homeowners website?

That's a new one to me! They are supposed to review you for the H4H while reviewing you for HAMP. And even at that, H4H is being revamped so why they would tell you that is beyond me. What phone number did you call?

[hope67]

Originally Posted by luvmyhorse

I applied for the home modification over the phone today. They directed me to the hope for home owners website, not the making home affordable website....

I hope that this is not just a refinance option that is going to destroy my credit....

Anyone know why they are directing me to the Home for Homeowners website?

This is very odd. Anyhow this is the info for H4H

Basic Facts for Lenders about the HOPE for Homeowners Program - HUD

Basic Consumer Facts about the HOPE for Homeowners Program - HUD

[hope67]

I find this particular requirement very interesting!!

How does the H4H program differ from FHASecure?
Under H4H:

• Any type of first mortgage can qualify, as long as it was originated on or before January 1, 2008.
• All existing lien holders must waive prepayment penalties and late charges, as well as extinguish all liens against the property.
• Existing first lien holders are required to accept the proceeds of the H4H mortgage as payment in full.
• Borrowers will be required to share both the initial equity created with the H4H loan, and future appreciation.
• The maximum loan amount is $550,440, nationwide.

How does the appreciation sharing work?
To encourage subordinate lien holders to participate in the negotiation process and release their liens, FHA has the authority to share with them the government's portion of any future appreciation in the property's value. At settlement, subordinate lien holders will receive a certificate that evidences their interest as an obligation backed by HUD, with payment conditional on the value of HUD's appreciation share. Please see mortgagee letters 08-29 and 08-30 for more details.

HOPE for Homeowners Frequently Asked Questions for the Housing Industry - HUD

[joanne]

While Debt Mounts, Couple Chases BofA Loan Mod - ProPublica

Sound familiar?