Well said, JayMM - perfect!
I am beyond sick of hearing how people who knew exactly the risks they were taking, bought big, fabulous McMansions, and got into mortgages waaay over their head are now looking for the government to bail them out. Cry me a river!
'Hope Now' Offers Little of Either
Email To A Friend
Please fill in the following information and we'll email this link.
In some cases, said Morgan, the delayed response to homeowners is the result of a backlog of cases under review by lenders and servicers, who have to review each loan one at a time.
"I think there are a lot of servicers out there that are absolutely underwater — people sitting there with 20 files on their desk that need to be reviewed," she said. "The general sense of the counseling community is that they're overworked. They need to staff up, and they need to continue to do that."
The lack of follow-through has also prompted criticism from state officials that it's difficult — if not impossible — to measure Hope Now's real progress in keeping people in their homes over the long term. Hope Now says it has helped some 640,000 homeowners modify their loans since October, but it's not clear how many of those modifications were sufficient to keep the borrowers from losing their homes.
"Yes (I) went into a remodification plan, but it just made my payment higher and unaffordable," said Maria Lackey, of Reynoldsburg, Ohio. "I cannot sell the house because I purchased it for $114,900 and it is now worth only around $100,000. So I either stick it out and starve to pay the house or walk away from it altogether."
A study released by the Mortgage Bankers Association last month found that in the third quarter of 2007, borrowers who couldn't meet repayment plans or loan modifications accounted for 37 to 40 percent of foreclosures on subprime mortgages (loans made to borrowers with poor credit records) and 14 to 17 percent of foreclosures on prime mortgages. That means that many borrowers are losing their homes even after negotiating modified repayment plans.
Homeowners at risk aren't the only ones with a stake in the success of Hope Now. Economists and housing industry analysts say the steep housing recession, and the ongoing decline in home prices, won't end until the foreclosure rate begins to subside. In the fourth quarter of 2007, mortgage default rates soared to their highest level in 23 years, and the foreclosure rate hit a record.
Hope Now's progress is being watched by lawmakers on Capitol Hill, some of whom believe the government needs to widen its response.
"(Hope Now) does not have the resources or capacity to deal with the sheer size of the problem that has millions of Americans in financial straits," Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, said in a statement last week.
Treasury Secretary Henry Paulson has resisted calls for wider government intervention and last week repeated opposition to calls for a government-funded buyout of distressed mortgage securities or for a change in bankruptcy laws to allow judges to modify mortgages.
State officials have been pressing lenders and loan servicers to provide more information on how many loans they're modifying and the terms they've offered. Last month, Maryland became the fourth state — after California, Michigan and Ohio — to ask industry officials to meet with state regulators besieged by complaints that loan servicers aren't responsive to homeowners with mortgage questions.
© 2008










Discuss