FreeDIYkits Loan Modification Blog

Officials from the Treasury department met with lenders yesterday in yet another attempt to get them to step up the pace of loan modifications. As of the end of September, 14% of all home owners with mortgages are either behind in their loan payments or in some phase of the foreclosure process. This is a record level of mortgage delinquencies, for the ninth straight quarter.

The big banks, for their part, continue to blame home owners for their failure to assist home owners with the modification process.

All is not bleak and awful. There are actually some lenders, primarily the lesser known smaller lenders, who are working actively and aggressively with homeowners to assist with modifications and actually process these loan workouts in a very short timeframe. For example, if you are one of the fortunate borrowers with a mortgage serviced by PNC Mortgage, you most likely can negotiate a 2 year reduction in your rate, have late charges forgiven, and be on your way to a workable payment schedule with just a phone call with one of their loss mitigation specialists.

PNC is a glowing reminder of a bank committed to working with borrowers who have fallen into a hardship situation. In sharp contrast, Bank of America advertises on their website that extensive documentation is required. will offer at best a 3 to 5 month trial modification after 30-45 days of review of your documents. What isn’t advertised is that a final disposition of your loan modification, if in fact you ever get one, is likely to still either revert your loan back to pre-trial modification terms, or result in a notice of default being filed against you.

B of A, like many of the big banks find excuse after excuse to NOT qualify borrowers for modifications. Excuses range from “too much equity” even in situations where the home owner has two mortgages and the combined mortgages put the borrower under water for equity, (The second mortgage is not included in the equity calculation), to the borrower never filled out all the paperwork or filled it out incorrectly. If this is such a huge issue, why doesn’t a bank with literally thousands of branches across the country, put people into the branches to work with borrowers in need of assistance. There are certainly abundant unemployed people across the country who could be hired to help.

The paperwork being requested is not difficult to compile and send in. However, the modification agreement must be signed and notarized, and this is where many homeowners seem to fail, according to bank spokespeople. Most banks do have notary service available, though you will very likely have to pay for the service. Also, title companies and law offices should all have notary service available.

What is difficult to comprehend is why banks such as PNC can accomplish in an hour what some of the bigger banks can’t manage to accomplish in a year. Processing of modification paperwork is really not all that different from processing a loan application.

The Treasury department has indicated that the banks must now report to the Treasury on the status and final decision on all of the 650,000 trial modifications in process. Failure to report to the Treasury department, in what the Treasury is calling “servicer accountability” can result in fines to these lenders. As of last month, less than 2,000 of the more than half million modifications in process had been converted to permanent modifications. Many of those borrowers ultimately lost their homes to foreclosure.

There is considerable criticism of the HAMP (Home Affordable Modification Program) as it currently exists. It was initially designed to help 3 – 4 million homeowners, but there are now more than 7 million delinquent mortgages in the pipeline.

Freddie Mac, one of the largest holders of mortgages, has hired an outside company, Titanium Company to send real estate agents door to door to assist homeowners with filling out required documentation for modification requests. But, even if filled out correctly, will the banks continue to “lose” documents that are sent to them again and again?

And, like so many programs that have been rolled out, this one still leaves out those who have been trying for months, and even up to a year to get a loan modification agreement of any sort.

Analysts estimate that this foreclosure crisis is likely to continue well into 2010 as unemployment numbers continue to rise and more home owners find themselves with loans they cannot pay.

The Treasury department is working to find means to help the struggling home owners by making more aid available.

Home owners who think they should qualify for assistance can call 888-995-HOPE or visit the website www.makinghomeaffordable.gov to learn more about what help might be available. You are advised to visit the site often as hopes are that more organizations and more assistance will be offered soon.

If you have an experience, whether positive or negative, that you would like to share with others, please leave a comment below. It is especially good to hear from those who have positive experiences to share, such as that report about PNC Mortgage. Borrowers with loans with PNC might not have realized how near help is for them.

Article Source: Examiner