It was reported recently by Associated Press that the federal government’s $50 billion program to ease the foreclosure crisis is helping only a tiny fraction of struggling homeowners. According to the report, as of July, only 9% of eligible borrowers had seen their mortgage payments reduced. A progress report on the plan in early August, showed that ten lenders had not changed a single loan. Both Bank of America Corp. and Wells Fargo & Co. — which have received billions in federal bailout money — were below average. The following was the score card:
• Bank of America had modified 4% of eligible loans;
• Wells Fargo had modified 6%;
• Wachovia Corp., which was taken over by Wells Fargo last December, had modified only 2% of eligible loans.
Foreclosures, meanwhile, continue to rise. About 1.5 million households received at least one foreclosure-related notice in the first half of this year, according to RealtyTrac Inc. It was reported that there are more foreclosures taking place in the country than there are loan modifications. Also, not all of the companies that should be in the plan are participating. There are 38 companies participating in the program, but there are holdouts that control 15% of outstanding mortgages. For example, Litton Loan Servicing, owned by Goldman Sachs, and HomEq Servicing, owned by Barclays PLC, have yet to join. American Home Mortgage Servicing and PNC Financial Services Group Inc. were among the companies that had a zero next to their names on the Administration’s recent report.
For each homeowner who makes regular payments for three months, the loan servicer collects $1,000 from the government. The company is paid thousand of dollars more if the borrower stays current for three years. Housing advocates cite numerous cases in which companies haven’t followed the program’s rules. And when borrowers are denied, they often aren’t told why. In response to such complaints, the Treasury Department says Freddie Mac will be doing random audits to see if borrowers are being improperly rejected.
Source: Associated Press
Contact us today for a free legal consultation with an experienced attorney.
Fields marked *may be required for submission.
If you would like to subscribe to the Jere Beasley Report digital edition, simply visit our Subscriptions page and provide the necessary information or call us at 800-898-2034.
Attorney Advertising - Prior results do not guarantee a similar outcome.