Hope Now, one of the largest foreclosure avoidance non-profits out there has announced that it foresees at least 2 million loan modifications in the coming year. This would be as part of their ongoing programs to help homeowners avoid losing a home to foreclosure.
They plan to do this by increasing the number of homeowner workshops by at least thirty over present numbers. This increase will also be accompanied by more use of the internet and telephone to assist homeowners in seeking modification of their loans.
Monday, December 29, 2008
Tuesday, December 9, 2008
Good News...and Bad
Today, we have, so-to-speak, a doubleheader of sorts. Some of this is good news for borrowers, while, unfortunately, some is not. First, the good news.
Birminham, Alabama-based Regions Financial, a multi-state financial services firm of $144 Billion in assets, with offices in 16 states across the South, Midwest and Texas, announced that through its Customer Assistance Program (CAP) it has helped 103,000 of its borrowing clients avoid potential default and/or foreclosure. In use since 2007, the firm offers a wide variety of plans to assist customers in need, some on its own, and others in conjunction with HUD's H4H or through NeighborWorks and other third party organizations.
If you are a client of this organization, you should contact your local Regions office immediately if you are having trouble with your mortgage payments.
Now, the negative. In a news conference held in Washington on December 8, the Controller of the Currency, John Dugan, said that over half of all loans that were adjusted through Loan modification in the first quarter of 2008 have become delinquent again within six months after the modifications were made.
Using figures covering 2008, Dugan said that in the first three months after the loan mod was done, 38% of borrowers had redefaulted, while for loan mods done over six months ago, the rate of redefault was 53% and over eight months it was 58%--none of these being very encouraging figures.
No-one seems certain of the reasons. Items being looked at are poor quality of the moldifications done, transfer of the amount of payments saved by loan modifications to credit card or other debt, as well as a number of other possibilities.
Birminham, Alabama-based Regions Financial, a multi-state financial services firm of $144 Billion in assets, with offices in 16 states across the South, Midwest and Texas, announced that through its Customer Assistance Program (CAP) it has helped 103,000 of its borrowing clients avoid potential default and/or foreclosure. In use since 2007, the firm offers a wide variety of plans to assist customers in need, some on its own, and others in conjunction with HUD's H4H or through NeighborWorks and other third party organizations.
If you are a client of this organization, you should contact your local Regions office immediately if you are having trouble with your mortgage payments.
Now, the negative. In a news conference held in Washington on December 8, the Controller of the Currency, John Dugan, said that over half of all loans that were adjusted through Loan modification in the first quarter of 2008 have become delinquent again within six months after the modifications were made.
Using figures covering 2008, Dugan said that in the first three months after the loan mod was done, 38% of borrowers had redefaulted, while for loan mods done over six months ago, the rate of redefault was 53% and over eight months it was 58%--none of these being very encouraging figures.
No-one seems certain of the reasons. Items being looked at are poor quality of the moldifications done, transfer of the amount of payments saved by loan modifications to credit card or other debt, as well as a number of other possibilities.
Thursday, November 20, 2008
More Relief!
Both Freddie Mac and Fannie Mae, in a burst of seasonal good will, have announced some relief on at least a temporary basis today. They will suspend some previously scheduled evictions and foreclosure sales until at least January 9, 2009. While this won't help everyone in such dire straits, it will provide additional time to at least some of those facing either the loss of their homes or eviction from homes already foreclosed upon.
It applies to 10,000 Fannie Mae owned borrowers and 6,000 borrowers whose loans are Freddie-owned.The properties affected are those currently occupied and either single family or 2-4 unit properties, with foreclosure sales already scheduled between November 26, 2008 and January 9, 2009. It WILL NOT affect vacant properties.
While delaying the pending foreclosures of these properties, it simultaneously allows the owners of these properties the time to take advantage of the recently announced loan modification programs that both of these mortgage firms created. Scheduled start times for those programs is December 15, 2008.
It applies to 10,000 Fannie Mae owned borrowers and 6,000 borrowers whose loans are Freddie-owned.The properties affected are those currently occupied and either single family or 2-4 unit properties, with foreclosure sales already scheduled between November 26, 2008 and January 9, 2009. It WILL NOT affect vacant properties.
While delaying the pending foreclosures of these properties, it simultaneously allows the owners of these properties the time to take advantage of the recently announced loan modification programs that both of these mortgage firms created. Scheduled start times for those programs is December 15, 2008.
Tuesday, November 11, 2008
Some More Possible Help
Today, it was announced that both Fannie Mae and Freddie Mac are considering some mass loan modificatioon programs. Additionally, Citigroup has just announced a large scale loan mod plan. Details follow, as taken directly from the announcement:
NEW YORK - The government and the mortgage industry are launching the most sweeping effort yet to help troubled homeowners by speeding up the process for renegotiating hundreds of thousands of delinquent loans held by Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency, which seized control of the two mortgage finance companies in September, announced the plan Tuesday along with other government and industry officials, including Hope Now, an alliance of mortgage companies organized by the Bush administration last year.
"Foreclosures hurt families, their neighbors, whole communities and the overall housing market," said James Lockhart, the housing finance agency's director. "We need to stop this downward spiral."
The plan could have tremendous importance because Fannie Mae and Freddie Mac own or guarantee nearly 31 million U.S. mortgages, or nearly six of every 10 outstanding. Still, government officials did not have an estimate of how many people would qualify for the new program.
Officials hope the new approach, which goes into effect Dec. 15., will become a model for loan servicing companies, which collect mortgage companies and distribute them to investors. These companies have been roundly criticized for being slow to respond to a surge in defaults.
To qualify, borrowers would have to be at least three months behind on their home loans, and would need to owe 90 percent or more than the home is currently worth. Investors who do not occupy their homes would be excluded, as would borrowers who have filed for bankruptcy.
Borrowers would get help in several ways: The interest rate would be reduced so that borrowers would not pay more than 38 percent of their income on housing expenses. Another option is for loans to be extended from 30 years to 40 years, and for some of the principal amount to be deferred interest-free.
Citigroup announced late Monday it is halting foreclosures for borrowers who live in their own homes, have decent incomes and stand a good chance of making lowered mortgage payments. The New York-based banking giant also said it is also working to expand the program to include mortgages for which the bank collects payments but does not own.
Additionally, over the next six months, Citi plans to reach out to 500,000 homeowners who are not currently behind on their mortgage payments, but who are on the verge of falling behind. This represents about one-third of all the mortgages that Citigroup owns, the bank said.
Citi plans to devote a team of 600 salespeople to assist the targeted borrowers by adjusting their rates, reducing principal or increasing the term of the loan.
Late last month, JPMorgan Chase & Co expanded its mortgage modification program to an estimated $70 billion in loans, which could aid as many as 400,000 customers. The New York-based bank has already modified about $40 billion in mortgages, helping 250,000 customers since early 2007.
Bank of America, meanwhile, has said that starting Dec. 1, it will modify an estimated 400,000 loans held by newly acquired Countrywide Financial Corp. as part of an $8.4 billion legal settlement reached with 11 states in early October.
NEW YORK - The government and the mortgage industry are launching the most sweeping effort yet to help troubled homeowners by speeding up the process for renegotiating hundreds of thousands of delinquent loans held by Fannie Mae and Freddie Mac.
The Federal Housing Finance Agency, which seized control of the two mortgage finance companies in September, announced the plan Tuesday along with other government and industry officials, including Hope Now, an alliance of mortgage companies organized by the Bush administration last year.
"Foreclosures hurt families, their neighbors, whole communities and the overall housing market," said James Lockhart, the housing finance agency's director. "We need to stop this downward spiral."
The plan could have tremendous importance because Fannie Mae and Freddie Mac own or guarantee nearly 31 million U.S. mortgages, or nearly six of every 10 outstanding. Still, government officials did not have an estimate of how many people would qualify for the new program.
Officials hope the new approach, which goes into effect Dec. 15., will become a model for loan servicing companies, which collect mortgage companies and distribute them to investors. These companies have been roundly criticized for being slow to respond to a surge in defaults.
To qualify, borrowers would have to be at least three months behind on their home loans, and would need to owe 90 percent or more than the home is currently worth. Investors who do not occupy their homes would be excluded, as would borrowers who have filed for bankruptcy.
Borrowers would get help in several ways: The interest rate would be reduced so that borrowers would not pay more than 38 percent of their income on housing expenses. Another option is for loans to be extended from 30 years to 40 years, and for some of the principal amount to be deferred interest-free.
Citigroup announced late Monday it is halting foreclosures for borrowers who live in their own homes, have decent incomes and stand a good chance of making lowered mortgage payments. The New York-based banking giant also said it is also working to expand the program to include mortgages for which the bank collects payments but does not own.
Additionally, over the next six months, Citi plans to reach out to 500,000 homeowners who are not currently behind on their mortgage payments, but who are on the verge of falling behind. This represents about one-third of all the mortgages that Citigroup owns, the bank said.
Citi plans to devote a team of 600 salespeople to assist the targeted borrowers by adjusting their rates, reducing principal or increasing the term of the loan.
Late last month, JPMorgan Chase & Co expanded its mortgage modification program to an estimated $70 billion in loans, which could aid as many as 400,000 customers. The New York-based bank has already modified about $40 billion in mortgages, helping 250,000 customers since early 2007.
Bank of America, meanwhile, has said that starting Dec. 1, it will modify an estimated 400,000 loans held by newly acquired Countrywide Financial Corp. as part of an $8.4 billion legal settlement reached with 11 states in early October.
Thursday, November 6, 2008
Possible Relief in California
In information released to the media yesterday, Gov. Schwartzenegger proposed a new plan to help people facing foreclosure. His plan is directed at homeowners who have already received Notices of Default (NOD), but not yet been foreclosed upon.
The specifics, as outlined yesterday, include a 90 day stay on the foreclosure process for anyone owning a home who has already received the NOD. A lender could get an exemption from this stay if it has in place what was referred to as an "aggressive modification program", according to the account in today's SF Chronicle.
The Chron reports that the modifications would be modeled on the format that was used by the FDIC in the recent IndyMac bank failure and the foreclosing loans held by that institution. Under that plan, borrowers' monthly payments would have to be limited to no more than 38% of their incomes. The lenders involved would be allowed to achieve that level from any of the following methods: lowering the interest rate on the loan; extending the maturity of the loan up to a maximum length of 40 years; or deferring a portion of the principal from repayment until such future date as the home is either sold or refinanced by the borrower. The Chronicle estimates that such actions could reduce payments by as much as 25 to 30%, which is a sizable amount.
For example, a 25% cut on a monthly payment of $500 would leave a new payment amount of $375. In the case of a current mortgage payment of $2,000 a month, a 30% reduction would leave the borrower paying only $1400, not cheap, but far better than his/her current payment amount.
As for when this or any other plan may be available, that remains to be seen, but the Governor is said to be pushing hard to get the legislature to do something about it soon after it reconvenes in January.
The specifics, as outlined yesterday, include a 90 day stay on the foreclosure process for anyone owning a home who has already received the NOD. A lender could get an exemption from this stay if it has in place what was referred to as an "aggressive modification program", according to the account in today's SF Chronicle.
The Chron reports that the modifications would be modeled on the format that was used by the FDIC in the recent IndyMac bank failure and the foreclosing loans held by that institution. Under that plan, borrowers' monthly payments would have to be limited to no more than 38% of their incomes. The lenders involved would be allowed to achieve that level from any of the following methods: lowering the interest rate on the loan; extending the maturity of the loan up to a maximum length of 40 years; or deferring a portion of the principal from repayment until such future date as the home is either sold or refinanced by the borrower. The Chronicle estimates that such actions could reduce payments by as much as 25 to 30%, which is a sizable amount.
For example, a 25% cut on a monthly payment of $500 would leave a new payment amount of $375. In the case of a current mortgage payment of $2,000 a month, a 30% reduction would leave the borrower paying only $1400, not cheap, but far better than his/her current payment amount.
As for when this or any other plan may be available, that remains to be seen, but the Governor is said to be pushing hard to get the legislature to do something about it soon after it reconvenes in January.
Will Obama Help?
Well, the election is now over, ending 21 months of campaigning. Whether your candidate won or lost, one thing is likely--some additional relief from the foreclosure tsunami is likely to find its way into any overall financial relief package put together by Obama and the new Congress. As to the specifics, that will have to wait until the new government actually takes over--Congress on January 1, 2009; and Obama at noon on January 20.
Monday, October 6, 2008
Some Relief for Countrywide Borrowers!
In a settlement arrived at yesterday, Bank of America, the pending purchaser of Countrywide,announced that it will allow a combination of loan modifications and interest rate reductions for tens of thousands of mortgage holders in eleven states. The states are: California, Illinois, Arizona, Connecticut, Florida, Iowa, Michigan, North Carolina, Ohio, Texas and Washington.
Starting in December, the program will adjust the size of the loan payments so that they do not exceed 34% of the borrower's income. In some cases, loan principal will also be adjusted. No modification fees will be charged, and prepayment penalties are to be waived.
In the case of homeowners whio will be unable to keep their homes even with this assistance, the agreement also provides a vehicle to assist them in moving to new locations.
Starting in December, the program will adjust the size of the loan payments so that they do not exceed 34% of the borrower's income. In some cases, loan principal will also be adjusted. No modification fees will be charged, and prepayment penalties are to be waived.
In the case of homeowners whio will be unable to keep their homes even with this assistance, the agreement also provides a vehicle to assist them in moving to new locations.
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