Homeowners Not Receiving Promised Help

Calif. Family Struggles To Save House As Banks Refuse Modifications, Despite Obama Admin. Plan

(CBS)  California today imposed a 90-day moratorium on foreclosures. The state has the nation's second-highest foreclosure rate.

The development is good news for those running into a stone wall at the bank despite the Obama administration's plan to help homeowners rewrite their mortgages. CBS News correspondent Bill Whitaker heard one family's story.

The De La Torre family had their American dream within their grasp: a house of their own and bright, beautiful children.

But when mom Angelica lost her housekeeping job and dad Angel's hours at a granite company were cut, the family could no longer afford their mortgage at 6.5 percent interest.

The family realized it was facing foreclosure - its dream slipping away.

"My dad always comes back stressed out. He's trying to do a lot of things right now so we can stay with the house," Angel De La Torre, Jr. said.

Losing their house to changing financial circumstances, the De La Torres are exactly the sort of Americans that President Barack Obama promised to help with his "Making Home Affordable" program.

But when Angel asked his bank to modify his loan, they told him he had to default on the loan to qualify. Not true. The program is made for homeowners like the De La Torres whose payments exceed 31 percent of their monthly income. The De La Torres' payments were already 54 percent of income.

"You see the president is doing this and doing that, but you don't see it in your community," Angel De La Torre, Sr. said. "Nothing happens over here."

Few people are seeing anything. The Treasury Department says they "have extended more than 150,000 offers on trial loan modifications," across the country. Those trial modifications go for three months to see if they're feasible. But that leaves millions of homeowners getting no help at all.

"The Obama plan has not been implemented by the banks," said Yvonne Maria Jimenez of the nonprofit coalition One LA-IAF.

Consumer advocates say banks, which received billions in taxpayer bailouts, are being stingy now that homeowners need help. Only 9 percent of failing la homeowners have gotten stable, fixed-rate modifications.

"The banks are not responding to homeowners on modification. They're taking a long time," Jimenez said. "The modifications that we are seeing are short term, they are not sustainable."

One bank agreed to lower the De La Torres' interest rate for one year, only to have balloon to 57 percent of their income in three years.

"I prefer to lose the house than to stop giving food to my kids," Angel De La Torre, Sr. said.

That's the kind of choice the Obama plan was supposed to prevent. The De La Torres could lose their house next week.

[John_Merritt]

I always try to give someone a benefit of doubt, but this discussion should have been Priority #1 list on Pres. Obama's list of 'things to do'. Actually it is one of the easier ones that could have been implemented.

I know Washington has so many moving parts (department and red tape) and time is required, but this problematic area has gone on far longer than needed. Why is that you ask? I believe from my own experience and limited scope of knowledge, that unless all parties all satisfied when it comes to recompense, than no one will gain the benefit of relief, least the homeowner.

I believe also that to create a program that requires instituting new prohrams, creates a layering effect that masks an underlying problem. I believe also that unless the banks and lending knew with absolute certainty what their liabilities and exposures were, they did not want to take on any 'new business'. Is that prudent? Absolutely. Unless you know how your balance reads, we are piling on good money over bad debt.

Recommendation: With the help of Shiela Bair (quite capable) a seperate entity altogether needs to be established that serves as a 'holding company' in receipt of all these monies and from that department, new loans need to be implemented. Once there is economic relief of the 'KNOWN' problem loans, than there is a residual reduction of 'panic' which appears to be prevalent.

Have you ever been in a panic situation? A mad rush for safety when level heads step to the side and allow the herd to trample each other. But it appears everybody got caught in the stampede and now they are only dusting themselves off. This is just one recommendation, for one problem area, but this one is causing the most problems. The time for scratching your heads was a long time ago. Now it is time to belly up to the bar and make it happen. No more excuses are necessary and certainly should not be used.

[johnhenry3k]

I think that home foreclosures are getting out of control across the nation. I also do not feel that the banks are providing the help that they are suppose to be. The government has issued banks a huge bail out to prevent these foreclosures and I just feel like the banks are almost more stingy with their money now.

People need to start being aware of alternatives to foreclosures and dealing with their bank. There are several alternatives to get a good loan modification to lower your monthly payment. I would suggest going through a company that has an on staff attorney who is experienced in the field of loan modifications. My friend just went through www.Carrotpeel.com for his loan modification and he thought it was excellent service and results.

Whatever you choose to do make sure they are helping you prevent foreclosure and that they are helping you personally.
Good Luck, John

[citysmart]

Are Law group has thousands of successful loan modifications in California. I would be happy to give this family and free loan modification if they would like us to.

The Obama plan was hype from the beginning and will prove itself a catastrophic failure.........

[tautomer]

The eight years of Bush cannot be taken care of in one month by Obama. Posted by clancy49
________________________________________________________________________

One month????!!! LOL!!! Obama and his Socialist Party have been in power for nearly 2-1/2 years, Clancy. It is precisely during this time that the country has gone all to pieces.

Unfortunately, people fell for Obama's seductive populist free-lunch rhetoric. It has cost us dearly. Unfortunately, people came to believe that a friendly purple-lipped smile was more important than prior achievement or competence in choosing a President.

The De La Torres drank the Koolaid. When it became clear that Obama was being taken seriously they should have sold the house, taken a few hundred grand in equity and sidelined it, knowing that when the great Socialist Curtain descended they'de be able to buy the same house back for half the price. Those of us who used common sense did that and are now in a good position wrt the Real Estate market.

The De La Torres are getting "Change They Can Believe In"!!!! Believe It!

[mecury69]

The blame is all on the BANKS people!

We are looking for a home now and finding that the banks are not accepting legitimate bids for homes in foreclosure and short sale. They are taking months and months and trying to squeeze purchasers into offering more.

If a home is listed for $200,000 and a person offers $200,000 and has the financing, what gives them the right to say no? But that's exactly what is happening out there.

The bailouts saved them and gave them to cushion to extort people for more money.

The banks created, the problem. The bailout expanded the problem. The banks are now compounding the problem as people are stuck in limbo; not spending money because they want a house at the real market value not some number propped up by the government and the banks.

"But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security."
-Thomas Jefferson,1775

We need a REVOLUTION!

[anti-global2]

"But when Angel asked his bank to modify his loan, they told him he had to default on the loan to qualify. Not true. The program is made for homeowners like the De La Torres whose payments exceed 31 percent of their monthly income. The De La Torres' payments were already 54 percent of income."

The fact that their payments were 54% of their income means they could still not afford the house with a lower interest rate. Say they take a point or two off and they save a few hundered a month, then thier mortgage payment would be what 50%, you still can't afford the house.
As sad as it may be to see families have to leave the fact is in America if you cannot afford something you have no right to it. A house is a priveledge based on what you can afford, not a right.

[tomadams99]

No, it is not Obama's fault, however, he is the one who made all of the promises, spent all the money which he now wishes to retract, and failed to follow through on his hollow promises. He knew he could not fulfill what he said. If this guy's lips are moving, he is lying...just like his mentor Uncle Joe.

[clancy49]

The comments continue on whose fault is whose fault. The eight years of Bush cannot be taken care of in one month by Obama. Take off the glasses. This is stupidity, egotism, elitism, and control of a few over the masses. This is a planned program and was set in motion under Richard Nixon. It actually was planned during the Eisenhower Administration, and Kennedy had to die because he wasn't part of the plan. The plan went through both Democratic and Republican administrations and Congress. The New World Order become solid during the Reagan Administration and actually verbalized under the GHWBush administration. Clinton led the way and Obama is finishing the details of it. The plan is to have an elite few in control of the World Masses on an economic slavery level with one government, one god, and one monetary economic system. The government should be socialistic to control and maintain the over population, the god still will be chosen, and the monetary system will be New World Order decreed, it is most definitely going to be a script system of electronic digits. However, with 2012 approaching it is still unclear if the True Force by the hand of man or Nature will thwart the best laid plans of mice and me.

[Mom-O-Truth]

BRUTAL LAW ENFORCEMENT BY FDIC IS THE ONLY WAY THESE GREEDY CORRUPTED BANKS KNOW.

[mrs_trepidatious]

This is all Obamas fauklt. He promised to help them and he did not deliver. Vote republican in 2010 for change we can believe in!

[Mom-O-Truth]

We have nothing to fear but our own "Axis of Evil."
Posted by r9119111 at 4:52 AM : Jun 15, 2009
--------------------------------------------------------------
100% alive, fat with over $250B, ugly and ready to eat more.

[Dgunner]

In just a few short months we will be expierencing the huddled masses, the tired the hungry. Right here on our own soil and within our reach , I feel gor the people whom are losing thier houses. However just wait and see what happens when and if the country recovers it will not be from housing reform . The people will not have credit to refinance or to buy again. Is it funny ? No , not for the people losing . Yes for the banking institutions who are standing on thier principles will son be sleeping on worthless paperwork and compiled mortgages. The banking institution will fall again and even harder. The President was warned this would happen . Now wait until the poor from the delta region start migrating north just for food.Will they be fed or will thier fellow americans shut the provrbial door in thier faces? Patience folks they are coming and they will be open for business.

[USASTILLONTOP]

But Obama promised...

[vranger]

"The banking industry and their partners are making huge sums off of foreclosures"

This is a huge misconception and has been one for decades, at least. Financial Institutions virtually always take a loss on any repossessed property, be it a home or a vehicle.

It happens on vehicles because the vehicle depreciates at a rate greater than the loan is paid off.

It happens on homes for several reasons. Often the home needs tens of thousands of dolllars in repairs before it can even go on the market. By the time you add real estate commissions, legal fees, and in some cases falling property values, banks often loose a substantial amount on every foreclosure. And with inentories of REOs at all time highs, they often sell them immediately after foreclosure, sometimes for half the price left on the loan.

This means that some individual investors might make money on a property, but at considerable risk, because with so many REOs, there are a lot of homes for sale in competition.

Individual home owners are the only ones that can actually come out ahead on the situation, if they need to purchase a home and find a sutiable REO at a discount. However, many people have lost on the other side of that transaction, when you count the bank and its stockholders ... not to mention the home owner who defaulted on their loan.

[trueblueusa]

NINE % !!!!!!!
ONLY 9%

Are getting " Modification "
But,The Banks have OUR Tax Money !!
They Got Modified !
But NOT our Homeowners,.(or soon to be Homeless ? )

[skyk-2009]

Once again Aaalpha000 blames the evil George Bush!!!!!! LMAO. As I said Alphaaa000, anyone who sold their home when it was clear that Obama was fooling the masses and sidelined a few hundred grand in equity is sitting pretty now. Those who were hoodwinked that Socialism is good for America are in trouble.

Think and all is well, Snooze and you lose.
Posted by tautomer at 11:52 PM : Jun 14, 2009

LOL You can't be serious! LOL The Confederate Party has NO place in this argument... THEY got us INTO this mess in the first place. IF you come here to support them and their FAILED Policies, you need to rethink your attitude!

[r9119111]

We have nothing to fear but our own "Axis of Evil."

[zonkzilla]

The banking industry and their partners are making huge sums off of foreclosures and the same parties are buying homes far below market price.
It is obvious the bailout money was not used as intended but was instead placed into accounts where it is being held or diverted for other uses.
I believe it is now time for the Department of Justice to start investigating where the bailout money went and if there was/is a plan to force forclosure for profits.
If the investigation finds nothing then that would be the end, if the investigation finds this fall in the economy is intentional then we need to build more prisons to hold those involved.
Diverting or misusing government funds is a Federal crime and a felony.
There is absolutely no reason not to at least investigate one bank to see and the best choice would be the one with the fastest and most foreclosures.

[tincup356]

Wasn't this the monster that started all the bailout mess to roll?,,,,,And even though it was the subject of the bailout at the time,,,,,9 months later and still no help for those people , the banks and AIG got that money ,,,,it went to bonuses, not the people who needed it.......WAKE UP AMERICA,,,,our government is in conspiracy to eliminate the middle class, BOTH PARTIES are committing TREASON.

[jjp735i]

Once again the government has given banks billions of dollars with a set plan only to have the banks once again ignore the reason for the money. The Obama White House seems no better than the Bush White House and the Democratic Congress is no better then the Republican Congress on over site. Once again the tax payer gets taken.