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twitterBanks pressured to be more helpful
Treasury to publish list of unsupportive lenders
Saturday, Dec. 5, 2009 | 2 a.m.
Harry Reid
Sun Topics
Sun Coverage
Washington — Throughout the foreclosure crisis, lawmakers and the administration have raised concerns that lenders are not doing enough to help families keep their homes and that the federal government is limited in its ability to press them to do more.
That theory may be put to the test as the Obama administration tries anew to push lenders to step up efforts to rework home mortgages so families can avoid foreclosure.
President Barack Obama’s housing rescue plan announced this year started with enticements for lenders: For every home mortgage they reworked, they received cash payments.
But the slow pace of mortgage modifications has brought out the sticks to accompany the carrots. Beginning this month the Treasury Department will publish a list of which lenders are meeting their targets and which are falling short. As one assistant Treasury secretary told The New York Times last week, some institutions “ought to be embarrassed, and they will be.”
As the foreclosure crisis ran headlong into the jobs crisis this year, the administration launched two programs in the spring to help protect homeowners.
One program allows homeowners to refinance at today’s lower interest rates even if their Fannie Mae or Freddie Mac-backed homes are underwater, meaning they are worth less than is owed.
This program has been especially important in Nevada, where studies now show nearly 70 percent of homeowners in Las Vegas are upside down on their mortgages. Under the program, homes valued at up to 25 percent less than the amount owed can still qualify for refinancing.
The second program is aimed at those facing imminent risk of foreclosure by having lenders rewrite their mortgages to a more affordable payment. Under the program, the federal government provides partial funding to lenders to lower the principle or interest rates so monthly mortgage payments consume no more than one-third of a homeowner’s income. The lenders also pay part of the costs.
The program has faltered, as lenders have not kept pace with converting trial modifications to permanent conversions after the initial three-month test period.
“With tens of thousands of trial modifications being made each week, the administration is now working to ensure that eligible borrowers have the information and the assistance needed to move from the trial to the permanent modification phase,” the Treasury and Housing and Urban Development departments said in a joint statement.
Part of the problem is technical — homeowners face mountains of paperwork to qualify for the mortgage modifications. The administration is streamlining the requirements and enlisting community housing groups to help homeowners execute the applications on time.
But part of the problem also appears to be a reluctance on the part of lenders to convert the loans, and the administration is imposing new monetary penalties and sanctions to ensure target agreements with lenders are met.
The administration also plans to publicize which lenders are following through and which are not in monthly reports.
Senate Majority Leader Harry Reid singled out Bank of America this week, warning that the company must bring more resources to Nevada to help struggling homeowners or face public scrutiny.
Reid called on the bank to establish a loan assistance center in the state, noting that of the hundreds of cases the senator’s office is working on for distressed homeowners, 40 percent involve Bank of America.
“(This) is in part a reflection of your company’s presence in Nevada but perhaps also an unfortunate indication of the difficulties your Nevada customers have encountered when approaching B of A for relief,” Reid wrote.
“In too many instances where my staff connects a constituent with a B of A employee to discuss a modification, the constituent later reports that B of A failed to be of any assistance.”
Reid also requested that Bank of America devote staff to handle cases before the state’s new foreclosure mediation program. Reid said most of the company’s cases before the mediation program resulted in findings of “bad faith” on the part of Bank of America.
“I appreciate the significant burden that the foreclosure crisis has placed on your servicing division, but I suggest your Nevada mortgage customers, Nevada’s housing market and, indeed, your company’s reputation will all suffer more unless more of B of A’s resources are directed to our state,” Reid wrote in a letter to the bank.
“Simply put — B of A must do more.”
Bank of America issued a statement saying the company “shares Sen. Reid’s concerns for homeowners during these difficult economic times.” The company outlined steps it is taking to help Nevadans as part of its efforts nationwide to modify loans.
“Bank of America is committed to helping as many customers as possible stay in their homes during these difficult times,” the statement said.
For more information on the housing programs, go to makinghomeaffordable.gov or call (888) 995-HOPE.
Discussion: 22 comments so far…
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When I vote next year, I will remember all my friends and family who have not been helped by the modification plans, and remember who voted for a corporate bailout.
JSilver
Is Sen. Reid burying Nevada Homeowners?
Reid recently made headlines after sending Bank of America a letter demanding the Bank give more assistance to Nevadans they are foreclosing. A smoke screen?
The Reid Health Care bill Forces annual Health Insurance costs on Nevadans equal to what many pay in Income Tax; that will cause more mortgage defaults. The annual expense of Forced health insurance will lower Nevada home values, by disqualify homebuyer mortgage applicants, needed to support home selling prices and values. Sen. Reid proposed Health insurance costs, will make it impossible for many Nevadans to pay their rent and other bills. Homeowners that can't afford health insurance or opt-out penalties, IRS can file liens destroying their credit; families deemed not poor by Government for subsidized insurance, may have to sell their home or borrow money to buy health insurance or pay Opt-Out penalties with money needed for medical expenses.
BANK OF "AMERICA" IS A FRICKEN JOKE! I stopped doing any banking with them ans closed my accounts back when they decided to issue credit cards to people without drivers licenses (illegals). The other thing that pissed me off was that they were building new banks WITHOUT DRIVE THRUS. Not very convenient for you customers.
And then B of A bought out Countrywide and now holds our mortgage and its been impossible to deal with them to get a refi. Every time I call I get different answers from people there and sometimes get transferred into oblivion. No one knows what the hell is going on there.
How soon we forget. The government pressuring banks is what led to this entire home mortgage fiasco in the first place. The government will never learn. Hey Harry, you found a job yet because you are soon to be among the ranks of the unemployed?
If you don't like the way the Bank does refi's then just pay the payment you signed up and agreed to pay in the first place. No one had a gun to your head when you signed the contract. People crying about having large payments wanting the lender to fix it. Grow up and pay up or shut up!
Boycott all the TARP banks. It's not that difficult. Lots of quality credit unions around, with service just as good or better than the major banks. BofA, JP Morgan Chase, Wells Fargo, Citi, etc., were all bailed out with our money. Move your money somewhere else.
Boycott Bof A
Banks are always there when they need you!
Boycott all the TARP banks - and especially BoA.
Make the shift to your local credit union!
Yeah right, that's what Vegas needs--more liar loans. Pressure the banks, so we can have another financial crisis. Face it, a deadbeat is a deadbeat, no matter how many times you rework his debt.
"The second program is aimed at those facing imminent risk of foreclosure by having lenders rewrite their mortgages to a more affordable payment. Under the program, the federal government provides partial funding to lenders to lower the principle or interest rates so monthly mortgage payments consume no more than one-third of a homeowner's income."
All this continued fuss over mortgages and foreclosures and still the only government programs are just band-aids. Seems no one's interested in the REAL cure -- a few words in laws requiring every lender or forecloser to present its bona fides along with every default notice. Those bona fides must include a certified copy of the actual note with a sworn statement identifying the current note holder.
After all, if the bank doesn't really own the loan -- as evidenced by its lack of proof it's the current Note Holder -- it would be fraud to modify anything it doesn't really own. And keep in mind courts are starting to void entire mortgages for this very reason.
Their Achilles Heel is found in the standard language on just about every note -- "I understand that the Lender may transfer this Note. The Lender or anyone who takes this Note by transfer and who is entitled to receive payments under this Note is called the 'Note Holder.'"
Get it, dolts?? ONLY the "Note Holder" is entitled to receive your payments!! Any one else demanding payment is stealing from you no matter what they call themselves!!
So who are all the other players who keep demanding payments? If it's not the original lender, and either can't or won't show it truly is the bona fide Note Holder, how is this not fraud?? Answer that, anyone! Then look up NRS 104.3501 and use it!
"And then B of A bought out Countrywide and now holds our mortgage and its been impossible to deal with them to get a refi."
Seriously -- Countrywide was notoriously bad for having lost the notes on both its own "loans" and those they bought. BofA inherited that problem.
"Face it, a deadbeat is a deadbeat, no matter how many times you rework his debt."
Van_Guard -- without holding the actual Note there is no "debt." It's a lot like losing a check then expecting to have the teller cash a copy of the check.
What song are these politicians going to sing when the national debt they've ran-up can't be repaid?
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WOW!! I love it!!! We keep complaining about B of A and maybe sooner or later, they'll deal with it!!!
Just a quiet nod, and a quiet hint. Islamic banks don't charge interest. Fancy not being exploited for profit by the people who help you buy your home. I'm not a Muslim by the way and it doesen't matter to them.
The federal government owns more than 50,000 vacant homes.[1]
Washington spends $25 billion annually maintaining unused or vacant federal properties. [2]
Federal investigators have launched more than 20 criminal fraud investigations related to the TARP financial bailout. [3]
[1] Brad Heath, "Gov't Losses Big in Home Market," USA Today, May 15, 2009, at http://www.usatoday.com/money/economy/ho...
-govtown_N.htm (October 5, 2009).
[2]Office of Senator Tom Coburn (R-OK), "Subcommittee Oversight Efforts Identify $1.1 Trillion in Waste or Questionable Spending," October 19, 2006, at http://coburn.senate.gov/oversight/?Fuse...
.Home&ContentRecord_id=611f1f4c-802a-23ad-475d-223d6490f308 (October 5, 2009).
[3]Ralph Vartabedian and Tom Hamburger, "Crimes Suspected in 20 Bailout Cases--for Starters," The Los Angeles Times, April 21, 2009, at http://www.latimes.com/news/nationworld/...
apr21,0,2443377.story (October 5, 2009).
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HookorCrook -- we've been down this path before, no? Why you continue to post as an advocate for the despair and hard way is a mystery.