Treasury Tells Mortgage Lenders To Do More For Homeowners
There's a meeting of the Mortgage Lenders Club going on at Treasury early this morning.
I don't think bagels and cookies are being served.
Mortgage lenders are being told that they're not doing enough to help homeowners who are underwater with their mortgages or who have lost their jobs and can no longer afford their payments.
Really? Lenders aren't doing enough to help? Whatever gave Treasury that idea?
Could it be that of the 650,000 so-called trial loan modifications only 2 percent have been made permanent? My email inbox is filled with questions from homeowners who want to know why their permanent loan modifications have higher monthly payments and the same interest rate as their original loan? Take a look at my "Are You In Loan Modification Hell" post and the nearly 100 comments that have continued the conversation.
According to a story in Sunday's New York Times, Treasury officials are looking at ways to embarrass mortgage lenders they feel aren't doing enough to help homeowners facing foreclosure.
Well, why would they? The Making Home Affordable (HAMP) program is voluntary. The FDIC came up with the net present value (NPV) calculations as a way for lenders to decide whether they'd earn more money by foreclosing over modifying loans.
According to a Treasury spokesperson, in addition to requiring more transparency from lenders (starting December 1, 2009, HAMP program members will have to use a new tool to report more accurate trial period loan setup data, trial period loan activity, official loan setup data, and official monthly reporting as required), the Administration is planning to announce more resources for borrowers.
I'll update this blog as soon as the announcement is made.
Read More:
- Underwater? Maybe You Should Walk Away From Your Mortgage
- Recession Over? Not With 21 Percent Unemployment
- Are You In Loan Modification Hell? Join The Club
- Are You In Loan Modification Hell? Maybe Not For That Much Longer
