Hope Now program reports progress with loan modifications
A mortgage industry alliance, under pressure to show progress aiding troubled home owners, says lenders gave a record number of loan modifications to distressed mortgages last month.
Statistics released by Hope Now, a group backed by the Bush administration to help stem the mortgage crisis and stave off foreclosures, showed almost 183,000 borrowers received some form of loan modification last April. That was the highest monthly number since the effort started last summer but not a significant impact.
Lawmakers in Congress call the industry’s efforts inadequate. They are pushing for a new $300 billion program to allow the government to back new loans for struggling homeowners. Supporters are hopeful that the measure could clear Congress Consumer advocates say permanent home loan modifications, in which a lender will lower the interest rate or make other changes, are the best way to help borrowers. The mortgage industry’s statistics include repayment plans, which allow borrowers to get back on track after missing payments. We are seeing some of the lenders eliminate rearranges and give the home owners a break. It’s all about negotiating, and asking for consideration in eliminating late fees and payments to help home owners get back on track and stay current with modified home loans “Unfortunately the foreclosures continue to increase at a record pace while home owners search desperately to save their home”, said Steven C. Feldman ESQ. Feldman opened the Feldman Law Center to assist home owners with loss mitigation and loan modification services. Known as a leader in the loss mitigation industry, Feldman took a unconventional approach and has been very successful with it. Some of the mortgage loan servicers actually refer us clients they can’t reach forbearance agreements with in hopes we can mediate a settlement offer. In these cases we restructure the file and seek a true loan modification asking for the rearranges to be waived and the interest rate reduced. The loan servicers are simply trying to collect a debt, not modify a loan. We provide a complete property analysis and revised proposal for the investor to make an intelligent decision, usually resulting in a much lower payment the borrower can afford. Our client keeps their home and the loan performs for the investor, “it’s a win-win situation and very gratifying”, says Feldman.
More than 243,000 homes received at least one foreclosure-related filing in April, up 65 percent the same month last year, according to RealtyTrac Inc.
The Hope Now group, however, said loan servicers, who collect and distribute mortgage payments, have stepped up the pace of loan modifications in recent months. Loan modifications accounted for 42 percent of total loan workouts in April, up from 19 percent in the third quarter of 2007. This is good news but a tedious process for most home owners trying to do loan modifications on their own. There’s a lot of calling, faxing, calling back, sitting on hold, re- faxing, re- calling etc… just to find out they misplaced your file and you must start all over again. It may not be such a bad idea to hire an attorney to handle the mess and hopefully get you a better deal by throwing their weight and legal expertise around.
The Hope Now alliance also claims 1.56 million borrowers have received loan modifications since July 2007. Of those, 30% were permanent modifications normally ending up in a 30 year fixed around 6.00%. “These numbers clearly demonstrate that Hope Now is succeeding at helping homeowners avoid foreclosure and stay in their homes,” the group’s executive director Faith Schwartz, said in a statement.
Hope Now also said that among the more than 600,000 subprime mortgages that adjusted to higher levels in the first four months of this year, only about 5 percent, were modified. A far greater share, 45 percent, were either refinanced or paid off when a house was sold. That means 50% were taken back by the lender in foreclosure. It’s obvious we need more than Hope, we need HELP! Members of Hope Now include Bank of America Corp., Citigroup Inc., Washington Mutual Inc. and Wells Fargo & Co. As time goes on and we are faced with option arm recast issues as well as a continued inability for most borrowers to refinance their adjustable rate mortgages. A homeowner has few choices these days if they can’t sell or refinance their home and can no longer afford the mortgage payment.
- They can contact their lender and seek a loan modification or short
sale. However, lenders are only considering these options after foreclosure
notices are sent.
- They can seek help or borrow against their retirement savings. This
is usually out of the question if the house is upside down, there
for ending up in foreclosure.
- They can hire an attorney to negotiate a loan modification or deed in lieu. This allows them to either keep their home or negotiate a “cash for keys” settlement.
It is wise to consider the importance of keeping a foreclosure or bankruptcy
off your credit record and exhausting all efforts to keep or willingly
return the property. A foreclosure or BK will haunt you for up to 10
years making it nearly imposable to purchase a home or borrow at reasonable
interest rates. Consider the cost of hiring a real estate attorney that
specializes in loan modifications and mortgage negotiations is cheaper
than first last and security deposit for an apartment. Keep in mind
a attorney through discovery or a forensic loan audit may find federal
TILA or RESPA violations giving them additional leverage for a favorable
loan modification with your lender.
The information contained herein is provided for general information
and advertising purposes only and is not intended to convey a legal
option nor legal advice for any particular case or situation. Nothing
in this article shall create an attorney-client relationship. Nothing
sent to this law office via e-mail shall constitute an attorney-client
relationship. Nothing contained in this article shall be construed to
be a guarantee or prediction of result. Prior results are provided for
general information purposes only and do not guaranty, warranty or predict
a similar outcome with respect to any future matter. Results achieved
depend on individual circumstances and not everyone will qualify or
be successful in restructuring their mortgage loan.
Alex Blue is a famous author who writes about Loan Modification. Loan Modification Help Center is a free resource for millions of people to find information regarding several topics related to loan modifications and resources to information.
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