Report: Lenders lag on loan modifications
The overseer for compliance with the $25 billion settlement finds servicing has improved but is still falling short. Consumer advocates say the situation is much worse.
The nation’s five biggest loan servicers are doing better at handling borrowers’ requests for loan modifications and other foreclosure-related issues, but they are still failing at some issues, according to an independent monitor.
The monitor was appointed to oversee the lenders’ compliance with the terms of a $25 billion settlement reached last year with 49 attorneys general. The monitor's report said four of the five lenders still are falling short in their handling of loan modification requests.
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But his report was much less damning than recent complaints from attorneys general in several states and consumer advocates, who say the loan servicers are falling way short of compliance, forcing more homeowners into foreclosure. New York Attorney General Eric Schneiderman has said his office may bring enforcement action against Bank of America and Wells Fargo.
"While I believe distressed servicing is better this year than it was last, it is not yet where it needs to be," Joseph A. Smith Jr. wrote in the summary with his compliance reports on the five largest U.S. lenders. "While there is more work to be done, I remain confident that the settlement is helping to improve the mortgage finance system."
He noted that he continues to hear many complaints about the loan modification process, single points of contacts (so customers don’t talk to a different person every time they call) and inaccuracies in billing and statements.
Respondents to a survey of California housing counselors said the lenders "rarely" or "never" complied with the settlement guidelines on mortgage modification documents and timelines.
The New York Times pointed up the irony in how the federal government has dealt with the lenders versus how the lenders deal with borrowers:
Banks are subject to fines of up to $5 million if they do not improve their performance on a failed metric. But they are allowed a certain number of errors, usually 5%, before they are considered to have failed. Critics of the settlement point out that, in contrast, homeowners seeking help are required to submit virtually perfect paperwork to prevent the loss of their homes.
Even with perfect paperwork, there are no guarantees a borrower will be treated fairly. Former employees who gave statements in a recent lawsuit against Bank of America said the bank told them to lie about whether documents had been received and to deny mortgage modification requests for no reason. The bank has denied the former employees’ allegations.
38special said: You made you bed now sleep in it. If you read you mortgage, had a good attorney at closing & were not stupid enough to buy on the bubble, then you would not be looking for a loan modification. Do I feel sorry, no, not for most who are in this predicament. Try reading before buying and get a good attorney. If you can't afford a good attorney, then you could not afford the house. Your as bad as congress, just sign it without reading it. Fools are easily parted from their imaginary money. Most of you who bought homes could not afford what you paid but still bought.
Wow. Really? You seem to believe that the main reason people may be in a predicament is simply because they didn't "read before buying" and didn't have a "good attorney". That MAY be the case with some, but do more homework before you shoot off about it being nothing but the buyer's fault. You are lumping everyone into the same category. Maybe if YOU read up on some history (Jimmy Carter, Clinton, etc.) and learn more of the predatory and deceitful practices our financial institutions are using. Possibly you will understand it's a little more complicated. Have you never found yourself in a financial (or even otherwise) situation even though you felt what you were doing was making a sound decision? My God, you're righteous. Get off your high horse and stop judging. And hope that when it happens to you, you're not met with someone like yourself. I accept your apology for insulting everyone.
I am currently in month 38 with BoA. Yes that is over 3 years!!! I have been denied modification over and over again... then they contact me 6 months later to say we can try another program only to be denied again. First tried this on my own when I knew my commission based salary wasn't going to be enough-didn't take me seriously until I stopped paying mortgage completely. Still denied but got lame excuses like "we misunderstood your information so a miscalculation was made-but not on our part" OR "the investor on the loan doesn't allow modifications"...I've heard it all from them. I then hired legal representation because I was told this is the only way to get the modification. Bull!! 1 1/2 years later-still denied and now it cost me $$ for HIS services. In February this year I got the final DENIAL...only to get a fedex in mid May congratulating me on a modification. Not a trial mod but permanent mod. What? The terms are disgusting! They changed me to a 40 year mortgage including all escrows with accelerated payment program-so by year 3 my payments will be just slightly less than what I couldn't pay now and the best part-they took all the payments I didn't make and made them a balloon. Added in some fees, late charges, escrows (which I never had with them and I do not want with them) for a grand total of $90K!!!! If I stay in my house until the end of my mortgage-I'll be in my late 80's and no matter when I sell it I still have to pay this absurd balloon. If they hadn't dragged this whole 3+ year process out-I wouldn't be in 90K arrears-and I could find the terms acceptable. Now it makes sense that they were offering bonuses to their employees to prolong these modifications. I won't accept these terms-so they are "working" on it-we'll see what they come up with this time. DO NOT do a Deed in lieu of Foreclosure-have only heard horror stories- people still having to pay huge amount of monies and still their credit is ruined! As for advice on staying away from these horrendous banks-As a consumer you have no say. Sure you make the initial application to the institution of your choosing, but have no control as to whom they sell your loan to. This needs to be changed immediately. This was not my original mortgage company -I inherited BoA...lucky me!
I'm under water on my mortgage but because I don't have a Freddie Mac or Fannie Mae loan the banks wont even listen to me. if I have to refi they want me to come to the table with the difference of what my current home value is and what I owe on the mortgage which is 40,000 because there is no Government programs for people with conventional mortgages. would I be asking for help if I had 40,000.
A bunch of CROOKS!!! Once you start in the modification process they will discourage you from catching up your payments as it will remove you from modification. They request the same paperwork every couple of months because they are too slow & everything expires. They delay & ruin you credit until you finally have to sell out. They will return payments in order to call the loan & LIE to you.
I know one person who did a deed instead of foreclosure 5 years ago. She was suppose to get a check to relocate. Instead Bank of America still sends her monthly bills.
I hope our politicians are proud of themselves. They bailed out these banks & asked them to make modifications to help the economy. The idiots we elected into office failed to place any sort of requirements attached to the money. We have banks who screwed home-owners by leaving customers at the mercy of the banks who decide who & how much they will modify. Meanwhile the banks are giving out bonuses to execs for foreclosing so where's the incentives to modify? Not to mention annual bonuses.
The whole issue makes me ill.
The theme I see recurring in all these comments is that people are trying to do this themselves. DUMB.
Go to hud.gov, click on your state and then find a housing counselor. Contact a HUD certified housing counseling agency and we will do all the grunt work for you...FREE. We know the tricks and submit electronically in most cases, have the time to follow up and get high success rates.
Bastards of America SOLD MY MORTGAGE RIGHT BEFORE I WAS ABLE TO REFI..Now no one will touch me for a refi .Im stuck at 6.42 on a 30 fixed loan.I know BOA ASSES where paid to help people like me.But they refuse to and they are keeping the money for their fat cat executives.I`m ready to walk away from my house and it 1700. mortgage .I am a 100%^ disabled service connected veteran on a fixed income.Which means more than half my pension goes toward my mortgage.The last week before payday I have to eat pretzels and water to feel full.Because I cant afford regular food .WTF I served my country for 20 years for this treatment? I hope someone in my same situation does not use their training to resolve this bank of America situation!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!**** YOU BANK OF AMERICA
Banks get great tax write offs for the forclosure-so they clean their books rather thatn take short sale prices which are better $ wise--.Look at the tax structure as to why this is happening.I am inRE I have to deal with this non-sense every day and