Tag Archives: Loan Modification

Three government agencies are combining efforts to address mortgage modification scams through a joint task force. With the announcement of the task force, the participating agencies -- the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), the Consumer Financial Protection Bureau (CFPB), and the Treasury Department -- released a consumer fraud alert to ensure homeowners understand that only their mortgage servicer has discretion to grant a loan modification.

Holistic financial counseling -- that which focuses on a borrower's entire financial situation -- can prevent both foreclosures and re-defaults, according to a recent study sponsored by special servicer Outreach Financial Services. Holistic financial counseling can save servicers up to $71.5 million in losses on a portfolio of 10,000 loans, according to the study. When holistic counselors review a borrower's entire financial status, they are generally able to diminish monthly spending by $200 to $300.

While the attorneys general working toward a settlement with the nation's largest servicers may be able to strike a settlement without California, it may cost them. A deal that seemed likely imminent as of the end of October would have required $25 billion from the banks - $5 billion in cash penalties and $20 billion in refinancings and modifications. That $25 billion could be reduced to $18.5 billion if California refuses to take part in the settlement, and it could limit the amount of assistance provided to California homeowners.

The Office of the Comptroller of the Currency (OCC) issued a report Tuesday on actions taken to correct deficiencies in mortgage servicing and foreclosure processing by the 12 institutions it oversees. The OCC has made public the names of the independent consultants retained for foreclosure reviews, and notes that evaluations of certain cases and mailings to more than 4 million borrowers are underway. The agency says all servicers have instituted policies to end dual-tracking and provide borrowers with a single point of contact.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced Monday that it intervened to block 40 mortgage modification schemes advertised on Yahoo! and Bing. In response, Microsoft terminated 400 advertising contracts with the perpetrators of the schemes. Microsoft is the founder of Bing, and its technology backs Yahoo! Search. Monday's notice follows an announcement last week in which SIGTARP reportedly shut down 85 mortgage modification scams advertised on Google.

Members of a House subcommittee voted Thursday not to pass a bill which would have allowed banks to classify modified loans as accruing rather than non-accruing. While most members of the subcommittee agreed that, in many instances, examiners and regulators are posing undue hardship on community banks, the bill was shot down with 8 ayes and 10 nays. Those who opposed said it would allow lenders to manipulate their accounting so that they don't have to hold additional capital against a potentially problematic loan.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) is vigilantly targeting mortgage and foreclosure rescue scammers that advertise online. SIGTARP announced Wednesday that it recently halted 85 online scams that promised to help homeowners pursue mortgage loan modifications. Google has cooperated with SIGTARP in its investigation and since the discovery of the 85 mortgage fraud schemes, has suspended 500 advertisers.

HOPE NOW announced a major milestone Tuesday -- the completion of 5 million loan modifications since the group began tracking such loss mitigation efforts in 2007. More than 80 percent of these modifications were completed through servicers' own proprietary programs, with the rest coming from the government's Home Affordable Modification Program. Officials called the 5 million mark a halfway point, adding that much more work needs to be done to help distressed homeowners.

Three mortgage servicers have voluntarily entered into an agreement with the New York State Department of Financial Services in which they pledge to abide by upgraded mortgage servicing standards that ensure fairness for all borrowers. The agreement was forged between Benjamin M. Lawsky, superintendent of the state regulatory agency, and Morgan Stanley and its Texas-based servicer Saxon; American Home Mortgage Servicing, also based in Texas; and Vericrest Financial, based in Oklahoma.

Foreclosure starts among private-label residential mortgage-backed securities (RMBS) have been rising toward historic averages, which will lead to an influx of distressed properties bringing downward pressure to the housing market, according to Fitch Ratings. Foreclosure starts among loans that have been delinquent for six months or more have almost doubled in the past five months. Fitch says it's a sign that servicers are playing catch-up on actions that have been delayed over the past year.