Aurora has made considerable strides in their efforts to help homeowners achieve loan modification, having significantly decreased phone hold times, as well as notably making increased efforts to help homeowners who are facing pending foreclosure, but they still play dirty and you may need professional help.

Aurora was a predominantly subprime lender during the boom, and most likely if your loan was originated with Aurora you are paying way too much for your mortgage, in addition to facing very adverse loan conditions; you may be in an adjustable rate mortgage (ARM) or interest only loan, or have an interest rate that is simply too high. Suffice to say, if you’re looking for an Aurora loan modification, you’ve come to the right place!

Getting an Aurora loan modification can help you to lower your interest rate, monthly payments, and possibly even the amount that you owe on your mortgage. Additionally, you may be able to modify the terms of your loan, including the length of time of the line as well as converting your loan to a fixed rate mortgage.

Aurora has shied away from in-house modification programs and has opted instead to help homeowners through a combination of Obama’s Home Affordable Modification program, as well as horrific forbearance agreements for those that do not qualify.

I can’t iterate this enough, but almost always a forbearance agreement from Aurora is nothing more than a repayment plan in which a number of fees, such as legal and late fees will be paid by you, the borrower, that would normally be waived after a successful modification.

Generally, forbearance agreements are a bad idea, especially if you can qualify for a modification or get attorney help to force your lender to modify. In Aurora’s case, forbearance agreements are almost assuredly a kiss of death to your financial situation; I’ve lost count of the number of homeowners that ended up with a higher monthly payment through forbearance agreement. How on earth is this going to help the homeowner? If they are delinquent and can’t afford their current payment, how are they going to afford a higher payment for the duration of the agreement to catch up?! Ok, enough on this for right now…

Now, Aurora participates in Making Home Affordable, however, there are a number cases in which homeowners that qualify for HAMP and get Trial Loan Modifications are never rolled into permanent modifications. The only way to know for sure whether or not your HAMP modification is going to stick is through an NPV test in exact accordance with Aurora’s guidelines, including their specific re-default rate. Modification Zoom has helped many homeowners kicked out of Trial Modifications to get back into HAMP and get permanent modifications. Contact us if you are having trouble with Aurora!

Depending on your financial hardship, we can help you get qualified for a loan modification with Aurora as low as 2% on a 30 year or 40 year fixed term.

If you are facing financial hardship and having a tough time getting a loan modification from Aurora Loan Servicing, take away the guesswork and let Modification Zoom’s dedicated staff get you the very best, 100% guaranteed loan modification.

Take the first step by using the contact form to the right. A professional will contact you immediately to discuss your financial situation, and help find the best solution.

Loan modification has been all over the news as of late as struggling homeowners have been seeking a way to avoid foreclosure and lower their mortgage payments to affordable amounts. Since the implode of the housing bubble, on average over 200,000 Americans have been served foreclosure notices each month, and they are desperately in need of a solution.

Prior to implementation of the Obama Administration’s Making Home Affordable Program, lenders all had completely different and often completely arbitrary guidelines for which homeowners they would or would not grant a mortgage loan modification.

Towards the end of the Bush Administration, a program was implemented called “Hope for Homeowners”. It was a smashing failure. Hope for Homeowners required borrowers who achieved modifications through the program to agree to give a significant amount of the equity in their homes to the Government should they decide to sell their property. Additionally, a horrific assumption was made that lenders would simply voluntarily participate, however nothing could be further from the truth.

To date, approximately 240,000 homeowners have gotten loan modifications through Obama’s Home Affordable Modification Program (HAMP). While this sounds impressive, this is actually terrible; originally President Obama was quoted saying he hoped that government initiative would help 8-9 million homeowners in need. Clearly we are missing the mark, however this time around there are at least incentives to lenders to help homeowners get a loan modification under Making Home Affordable.

Fundamentally, there are a number of problems with the programs. First and foremost, lenders do not want to help the neediest homeowners as they are the riskiest. Homeowners that are days away from foreclosure are very much more likely to re-default even after a loan modification.

From the homeowners’ viewpoint, they are simply fed up with hours of time wasted on hold with lenders only to be connected with a “specialist” that is under-trained, or worse, simply will not take the homeowner seriously unless there is also an Attorney on the line. Turn times are horrific; for homeowners attempting to get modifications on their own they often have to wait 3 months or more for any kind of mortgage relief.

President Obama, The Department of Treasury, and The Department of Housing and Urban Development (HUD) have become so fed up with Lender inaction that they have on numerous occasions called in the CEO’s of the major lenders to explain why more hasn’t and isn’t being done.

Across the internet on websites such as Mandleman Matters, Loanworkout.org, Blown Mortgage, and numerous others, as well as in the media through print and TV, there has been a public outcry against lenders inaction, and unwillingness to help borrowers get mortgage modifications.

Here’s a recent and interesting article from CNN on the failure of the Making Home Affordable Program:

(CNN) — When President Obama unveiled the Making Home Affordable Program in March, he said it would help “responsible folks who have been making their payments” reduce their monthly mortgage bills and avoid losing their homes to foreclosure.

But six months into the program, only 6 percent of the 4 million eligible homeowners have gotten help. A lot more say they’ve been frustrated with the runaround they’ve been getting from lenders.

Are the new program’s growing pains responsible for the slow start, as bankers say, or is pain to their bottom lines really preventing the program from working, as critics say?

The Making Home Affordable Program is supposed to work this way:

In return for billions of dollars in taxpayer bailout money, banks would offer loans that would reduce troubled borrowers’ monthly mortgage payments to 31 percent of their income. To qualify, a homeowner must have an income and must live in the house, and that house can’t be worth more than $730,000.

The bank is also allowed to calculate the value of the mortgage against the profit it would make from a foreclosure.

Banks are prohibited from selling a house in foreclosure while the homeowner is being considered for an adjustment. The Treasury Department oversees the program, and the banks signed contracts with Treasury binding them to cooperate. Watch more about how the program has worked so farVideo

Treasury Secretary Timothy Geithner has been so unhappy with the program’s pace that he called in lenders for a meeting and demanded they do better.

In a July 9 letter to one servicer, JP Morgan, Geithner and Shaun Donovan, secretary of Housing and Urban Development, wrote “there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we share.”

They called on the banks to hire more staff, expand their call centers and allow homeowners “an escalation path for borrowers dissatisfied with the service they have received.”

The mortgage industry’s top lobbyist says any problems to date are the growing pains associated with getting such a massive program up and running.

“It is working, and it needs to be given some time,” says John Courson, head of the Mortgage Bankers Association. He says banks are still staffing up and getting the program off the ground. “It took 90 days to get out the rules and the procedures and the forms, and so that’s a fairly new program,” he said.

Courson says that lenders are still “training more and more staff as they are getting more and more people who are familiar with this program.”

He insists that the banks want to cooperate.

“It’s in the banks’ best interest to work with those borrowers to keep those loans on the books and avoid foreclosure,” Courson said.

But critics say that the program works against the banks’ best interests, as the homeowners who most need the program are the riskiest bets.

“If the borrower is really in trouble, [the lenders] probably don’t want to do the modification, because they think there’s a good chance the borrower will redefault, and they will do a lot of work and they won’t collect money,” said Paul Willen, an economist with the Boston Federal Reserve who has studied bank foreclosures and modifications.

“The problem with this is in some deep sense, you can’t penalize the banks for acting in self-interest. It’s a for-profit business.”

Others are critical of the voluntary nature of the program and the Obama administration’s hands-off relationship with lenders.

The Treasury Department official charged with overseeing the program insists it’s “off to a strong start, with hundreds of thousands of trial modifications already underway.”

Assistant Secretary for Financial Institutions Michael Barr acknowledges that “servicer performance has been uneven, but servicers have committed to ramping up efforts to improve the process for borrowers,” and he insists that “the administration will hold these institutions accountable for their progress.”

He says Treasury is on track to help 3 million to 4 million homeowners in three years.

Diane Thompson of the National Consumer Law Center has a theory on why the Obama administration isn’t getting tougher with the banks: “This is a voluntary program. I think Treasury has been very concerned to make sure that servicers [the banks] are willing to participate.”

She’s convinced that banks will improve their track record only if they’re forced to make loans.

“Until it’s made a mandatory program, I think we will not see a significant drop in foreclosures,” Thompson said.

Another problem with the program is that banks don’t always have the final say.

Many of these mortgages are held by private investors, and the bank simply acts as a middleman. If investors think they can make more money by foreclosing than modifying the loan, experts say the bank is powerless to override that decision.

Susan Wachter, professor of real estate and finance at the Wharton School, explains, “These are contracts. The government does not have the right to rescind contracts. The government can legislate all they want, but there can be lawsuits.”

Willen adds: “What’s upsetting about this is that with Making Home Affordable, what you ended up with may be worse [than doing nothing]. We’re giving more money to banks, and not preventing many foreclosures.”

The Treasury Department has begun stepping up pressure on banks. This month, it began publicly reporting the number of the program’s loans the banks had offered, as a way to shame banks into better participation rates.

While JP Morgan-Chase has enrolled 20 percent of its eligible customers and Citibank 15 percent, two banks that got the biggest bailouts have some of the lowest enrollment rates, according to Treasury: Wells Fargo has enrolled 6 percent of eligible customers, and Bank of America 4 percent.

Both banks say that those numbers are misleading — that they have many more offers in the pipeline and have increased staffing.

Bank of America also says it is bigger than other banks, so it has more applicants to process. Wells Fargo also says that it has refinanced many hundreds of thousands of loans outside of the government program.

Courson said many other banks are also offering their own mortgage modification programs, and if you count those, “a million and a half borrowers were assisted in the first six months in this year.”

Multiple administration officials insist to CNN that there is adequate oversight of the program and that the Treasury Department has enlisted Freddie Mac to monitor the banks.

A Freddie Mac official, who would speak only on the condition of anonymity because it is acting “at the direction of Treasury,” told CNN that its investigators visit banks, but only after giving the banks’ management notice that they’re coming.

The agency reviews loan documents, but only those that lenders provide. There are no surprise visits, no tape recordings of bank calls to assure quality assurance, and no way to respond to individual homeowner complaints.

Recently, Freddie Mac began random reviews of cases in which homeowners were denied Making Home Affordable loans. So far, Freddie Mac has not found a single instance of noncompliance worth referring to the Treasury Department for a penalty.

The Treasury Department was unable to show CNN any instance of a lender being penalized for breaking the program’s rules.

Source: Jessica Yellin, CNN National Political Correspondent

Its rapidly becoming apparent that as lenders become more profitable and pay back the TARP stimulus funds loaned to them by the Federal Government, they are going to become less and less likely to approve loan modifications. During the refi boom, if you were late on your mortgage, there was almost no such thing as a loan modification, or mortgage relief.

Already, it is almost impossible to get a loan modification without a strong Attorney forcing the lender into granting a loan workout. Soon, it may become even more difficult for the Attorneys to get mortgage loan modifications for clients. Homeowners are urged to take the time to speak with a Modification Zoom Consultant, and possibly connect with an Attorney. We’re here to help homeowners avoid foreclosure, and can answer the tough questions that lenders may not want to or refuse to answer.

I’ve always been a fan of Litton Loan Servicing in their commitment to helping homeowners that need mortgage help through mortgage loan modification. By far, Litton has been the most aggressive servicer in writing down principal balances for clients that are underwater on their homes, and they have been fully committed to providing excellent customer service to borrowers; typically low hold times and prompt responses on mortgage loan modification and loan workout requests.

Why is this important to you? Well, a loan modification can help you lower your interest rate, your monthly mortgage payment, and even possibly your loan balance, as shown through the loan modification agreement below. Regardless of which lender you have, if your loan was originated any time during the last 10 years, you most likely are paying too much for your mortgage. You do not necessarily have to be late on your mortgage to qualify, and a loan modification will not hurt your credit history. If you are experiencing financial hardship, then a mortgage loan modification will help you save your home!

Litton Loan Servicing now participates in Making Home Affordable, which is great news for borrowers that currently have mortgages with Litton. Under the Home Affordable Modification Program, which is the Obama Administration’s Loan Modification Program, homeowners can achieve interest rates as low as 2% on 30 year and 40 year fixed mortgages.

Of all of the servicers, Litton responds most favorably to attorney assisted loan modification requests. ModificationZoom’s contract attorneys are intimately familiar with working with Litton to get the very best loan modifications for homeowners, and will guarantee a succesful, aggressive loan modification.

Here is a Loan Modification Agreement from Litton. The client’s interest rate was reduced from a 7.375% I/O (Interest Only) Loan to 4.68% Fixed, and the client’s loan balance was reduced from $688,000 to $380,391. This is a principal balance reduction of over $300,000; over $300,000 of her debt was completely forgiven! The old payment on her loan was $4,888, and she was only making interest payments. Her payment is now $3,583, saving her $1,305 every month, and no longer I/O!

If your mortgage is among the 370,000 mortgages currently held by Litton Loan Servicing, ModificationZoom can definitely help you get the very best results on a mortgage loan modification. Regardless of who your lender is, we can help you get a loan modification! Apply for help by completing the “quick-qual” application to the right, and a loss mitigation specialist will connect with you!

Adding HAMP to Litton’s already impressive in house loan modification programs is a step in the right direction! Here’s the original Press Release from Business Wire detailing Litton Loan Servicing now participating in Home Affordable Modification Program (HAMP):

HOUSTON–(BUSINESS WIRE)–Litton Loan Servicing is pleased to announce it has signed the agreement with the U.S. Department of the Treasury to participate in the Home Affordable Modification Program (HAMP). Since March, Litton has offered more than 38,000 modifications to struggling homeowners using terms in accordance with the broad principles of HAMP, and has built infrastructure to fully implement the program.

Litton has been a pioneer in the mortgage servicing industry by providing innovative foreclosure avoidance solutions to homeowners for more than 20 years. The company has been, and continues to be, a proponent of thoughtful and practical loan modifications that provide affordability to homeowners.

“Our company has used modifications as the primary method of helping homeowners avoid foreclosure. In the 12 months prior to the announcement of the Home Affordable Modification program, we modified more than 44,000 loans, representing about 10% of our loan portfolio. As the details of the federal program emerged, we continued to modify loans, and by adopting this program, we will continue to make every effort to keep homeowners in their homes,” said Larry B. Litton, Jr., Litton’s president and CEO.

Litton customers who are having difficulty making their mortgage payments are encouraged to call (800) 247-9727 or visit www.littonloan.com to determine if they are eligible for a modification or other loan workout solution. Homeowners who are interested in learning more about the Home Affordable Modification program may find details at www.makinghomeaffordable.gov.

Houston-based Litton Loan Servicing LP is a mortgage servicing company specializing in loss mitigation and default management for residential loans. Since its inception in 1988, Litton’s primary objective is to help customers avoid foreclosure and preserve homeownership. Currently Litton services approximately 370,000 mortgage loans across the country. For more information, please visit www.littonloan.com.

If you are in need of a loan modification to help prevent and avoid foreclosure, get a guarantee. Do not trust your financial future in the lender that put you in a bad loan in the first place. For a referral to the very best Loan Modification Attorney in your area, complete the ModificationZoom “quick-qual” application to the right, and a loss mitigation specialist will contact you shortly.

American homeowners are in desperate need of mortgage loan modification to prevent what seems to be inevitable foreclosure on their homes. Sadly, most lenders are not moving rapidly enough to help borrowers that are late or going to be late on their mortgage payments.

If you are a homeowner that is facing foreclosure or can benefit from a mortgage loan modification – a lower interest rate, payment, and possibly even a lower mortgage balance, the onus is upon you / your representation to contact your lender and present an effective, qualified package that will guarantee you a loan modification.

It’s becoming more and more apparent that lenders simply are not proactive enough in reaching out to homeowners that are missing mortgage payments, and with so many homeowners re-defaulting (missing payments and losing their homes) after getting loan modifications, it’s quite apparent that a good deal of the loan workouts that these lenders are granting simply aren’t aggressive enough to truly help.

Homeowners that engage the services of reputable, knowledgeable Loss Mitigation Attorneys receive a much higher success rate on loan modification, and typically get much, much better results – lower interest rates, better loan terms, etc.

The Treasury Department performed a report on how quickly mortgage banks are helping borrowers experiencing financial hardship under the Home Affordable Modification Program (HAMP), the Obama Administration’s foreclosure-prevention plan.

The Treasury Department’s report clearly showed that there is a huge variance of how quickly and effectively lenders are helping homeowners through a Making Home Affordable loan modification.

To date, over 400,000 homeowners have been offered help to save their homes and avoid foreclosure through Obama’s Loan Modification Program. More than 235,000 of these borrowers are at least 60 days past due and have begun a trial mortgage loan modification, which is the first step to getting a loan workout.

According to the Treasury Report, JP Morgan Chase & Co. has put the most homeowners into trial loan modifications, with approximately 79,000 borrowers participating, or approximately 20% of their clients that are 60 days or more past due.

Completely behind the curve, Bank of America has only begun trial modifications for 4% of their clients that are 60 days or more delinquent or approximately 28,000 borrowers. Wells Fargo also has only 6% of their neediest homeowners in trial loan modifications.

Under the Home Affordable Modification Program, borrowers do not necessarily have to be late on their mortgage payments. Often, mortgage companies will begin trial loan modifications prior to receiving any income documentation from the clients. Subsequently, if a trial loan modification fails, most likely it will be reworked to help the homeowner afford their monthly mortgage payments.

During the trial modification, borrowers must document their income and make the new, lower payments on time to qualify for the final loan modification.

Information on the Treasury Department’s Report has been released in an effort to make lenders more accountable. Often in the past, lenders would not give the reasons why a homeowner did not qualify for a mortgage loan modification, however, now, they are required to disclose that information.

Making Home Affordable offers lenders incentives to mortgage banks, servicers, and investors to reduce loan payments and grant loan modifications. The Obama Administration is calling on banks to increase the number of trial loan modifications to 500,000 by November 1.

According to the Wall Street Journal, Administration officials have said the program could ultimately help as many as three to four million homeowners. Interestingly enough, President Obama has been quoted many times clearly stating at the beginnings of Making Home Affordable that the goal is to help between eight and nine million homeowners.

Professor Anthony Sanders of George Mason University, a highly respected expert on real estate, said government officials should focus on the success rate for loan workouts, not the number being done.

The conclusion that can be drawn from all this is that not nearly enough is being done by lenders. A lender should not get a pat on the back for having 20% of their delinquent clients receiving trial loan modifications; this means that 80% of their 60 day+ past due clients have not received any sort of trial loan modification.

Borrowers still often have to wait hours and hours to speak with a bank representative, and often are not helped in any way. For a guaranteed no headache aggressive loan workout, the best thing to do has always been and will always be to hire an attorney.

Save My Home

ModificationZoom’s Contract Attorneys can help you get a mortgage loan modification that will lower your interest rate and monthly payments, as well as prevent foreclosure and save your home. Complete an application today and get a guaranteed loan modification by filling out the form to the right.

Loan Modification- the term has been thrown around quite liberally as of late in the media, and most likely if you are visiting our website you have a good idea of what a mortgage loan modification is. Lately, much effort has been made by the Obama Administration as well as many lenders to help homeowners that can no longer afford their mortgage payments.

Through the latest Government Initiative, Obama’s Home Affordable Modification Program – HAMP (the loan modification option of Making Home Affordable) approximately 235,000 mortgages have been modified.  While this is a great and laudable effort, we are nowhere close to helping the initiative goal of 8-9 million homeowners.  Totaling the first two quarters of 2009, there have been over 1.8 million foreclosures.

These are our neighbors, families, and friends that are losing there homes.  It is simply unnaceptable, and thankfully this appears to be the stance of the Obama Adminsitration, HUD, and the Treasury Department, as they have put an increasing amount of pressure on lenders to modify mortgages.  Lenders that are not helping homeowners, or have bad lending practices, are being investigate through a joint effort of the FTC, FBI, and multifarious pro-active State Attorney Generals.  Lets chalk up one point for Government (and minus 4 points for the banks)!

I came across an interesting article on Business Week by Elise Craig addressing the problem, and what exactly is being done to stop it:

With unemployment projected to continue rising, leaving more homeowners without jobs and unable to meet their mortgage payments, Congress can expect an earful from constituents about what it’s doing to stem the tide of foreclosures.

Against this backdrop, the Obama Administration on Aug. 4 unveiled an optimistic report on its signature foreclosure initiative: Mortgage companies have offered to adjust more than 406,500 loans under the Making Home Affordable program, and have actually modified more than 235,000. The Treasury Dept. lauded the program’s “rapid progress,” saying that it “puts the program on track to offer” modifications to 3 million to 4 million homeowners over the next few years, encouraging news for homeowners seeking to keep a roof over their heads.

That’s an impressive start for a months-old program, if not the dramatic success many would have liked, analysts said. “The numbers are really good,” says Jaret Seiberg, a policy analyst for Concept Capital’s Washington Research Group. “This is a classic instance where reality and perception collide in Washington and disappoint everyone.”

Some Shortcoming Acknowledged

Although the program has made fast progress, the mortgage modifications are dwarfed by the 1.8 million foreclosures already tallied in the first half of this year by Equifax (EFX) and Moody’s Economy.com, and by projections for 3 million to 4 million foreclosures over two years. Not exactly good news for lawmakers to bring home to voters during a summer recess.

John Taylor, head of the National Community Reinvestment Coalition, a network of housing advocacy groups, said that while he’s encouraged to see the modifications, he isn’t convinced it will make much difference in the economy. “To the extent that people are hoping it will eradicate contributions to the recession [from foreclosures], we’ve got to see more significant numbers,” Taylor says. Dan Clifton, a Washington policy analyst for Strategas Research, says loan modifications to date are “on a scale that’s way too small to impact home prices.”

Treasury acknowledged some shortcomings in its program—among servicers, there has been “uneven ramp-up and substantial variation in the pace of modifications,” the agency said. The numbers show that a half-dozen servicers have modified between 19% and 25% of the mortgages they handle, while many others have modified just 6% or less. Some banks that accepted TARP funds—Wells Fargo (WFC), Bank of America (BAC), and Wachovia among them—fall into the latter category.
Calling for Legislative Measures

Industry officials cautioned against blaming individual companies just yet. “It’s probably too early to say who are the good guys and who are the bad guys,” says Paul Leonard, an official with the Housing Policy Council and a lobbyist for the Financial Services Roundtable, which represents large financial firms. That’s because, as the Administration built its new program, servicers had to hire staff and craft procedures to deal with modifications, which some accomplished faster than others. “You’re looking at large institutions that don’t turn on a dime,” says Andrew Jakabovics, associate director for housing and economics at the Center for American Progress, a Democratic-leaning think tank.

But industry critics have little patience for that kind of reasoning. In a blistering statement, the Center for Responsible Lending, a consumer advocacy group, dubbed the Administration’s list of mortgage companies a “Wall of Shame.” The group, like other housing and consumer advocates, is calling for legislative measures to force mortgage companies to give struggling homeowners a break.

That includes a provision that would allow judges to alter mortgages in bankruptcy court, often called “cram down” in the housing industry. In addition to forcing modifications in court, supporters say, the threat of these judicial modifications would encourage mortgage companies to make more substantial modifications to more loans. The measure passed handily in the House earlier this year despite fierce opposition from financial interests, but died in the Senate after moderate Democrats voiced concerns.

Bankruptcy Revision Is Possible

Now there are signs the measure could see new life. One senior Democratic Senate aide said party leaders in the chamber are likely to revive it this fall if another solution isn’t found soon. And last week, Representative Barney Frank (D-Mass.), the powerful chairman of the House Financial Services Committee, made a similar warning, threatening that legislation the lending industry actually wants will go nowhere in his committee until there is a “significant increase” in modifications or lawmakers tack on the bankruptcy provision.

Without a significant rise in loan modifications, Frank added, “the argument for revising the bankruptcy option will be extremely strong, and I think there is a substantial chance that the outcome will be different.”

Eventually, legislation may be put ito place the will force lenders to be more proactive about modifying mortgages for needy homeowners. In the meantime, homes are being foreclosed on at a more than alarming rates. The percentage of homeowners that actually get modifications that attempt to negotiate on their own is horrifically low, and of those that get loan modifications on their own, approximately 50% re-default on their mortgage within a year.

Lenders are not modifying enough mortgages, and are rarely stirred to action unless a reputable attorney is on the line. Even Congresswoman Maxine Waters had a 2+ hour ordeal with Countrywide / Bank of America trying to help her constituents.   This leaves many homeowners wondering, “Can I truly save my home on my own?”

If you are a homeowner facing financial hardship, it is strongly advised that you do all that you can to avoid foreclosure or bankruptcy. There are attorneys out there that can help you save your home and avoid foreclosure for a very low retainer fee. Many of these attorneys actually are almost 100% successful in negotiating loan modifications for their clients, and they understand guidelines and will play hardball to guarantee that your mortgage gets modified.

Loan Modification

If you do not know of a good Real Estate Attorney that specializes in Loss Mitigation, ModificationZoom can connect you with one; fill out the “Quick-Qual” form to the right, and a loss mitigation specialist will contact you and help you get the loan modification process started.

Finally, lenders are going to have to answer tough questions on not granting loan modifications to homeowners.  After a month of being pressured by Treasury and HUD to grant more loan workouts, and still failing to help borrowers modify their mortgages, lenders are going to have to explain to President Obama why so little is being done.  Homeowners that can no longer afford their mortgage payments are encouraged to learn more about loan modification programs, such as Making Home Affordable (Obama’s Loan Modification Program), that can help them modify loans that lenders simply do not want to modify. 

The fact that lenders are still not doing as much as they can to help is absolutely apalling.  After accepting billions of tax-payer dollars in bailout (TARP) money, and after most of the CEO’s of the remaining major banks have already met with President Obama two months ago, and pledged support for modifying mortgage loans (a bold faced lie), the idea that lenders are comfortable not granting mortgage loan modifications and still foreclosing on American families is simply depolorable.  Even more depolorable, the banks have also been offered financial incentives to modify mortgages under Obama’s Making Home Affordable Program, and still they do very little to grant MHA modifications.  Enough is enough.  Here is the original article from ABC News:

Mortgage servicers accused of not doing nearly enough to stem the nation’s foreclosure crisis will sit down with the Obama administration tomorrow to tell their side of the story.

The meeting, the results of which are not expected to be made public until early next month, comes amid escalating criticism that both mortgage servicers and the government are ill-equipped to carry out Obama administration programs designed to help keep people in their homes.

Homeowners such as Pedro and Lucy Gomez are among the many disappointed with loan modification efforts.

The couple are fighting foreclosure on their Elgin, Ill., home. Pedro Gomez, 43, said they fell behind on mortgage payments after his wife was laid off last year. They sought help from their mortgage servicer, he said, but the company only offered a loan modification plan that didn’t actually reduce the monthly mortgage payment.

“We continue to call them and try to work with them and they refused,” he said. “They kept on giving us the brushoff.”

The National Consumer Law Center, which presented testimony to the Senate earlier this month, has identified dozens of ways in which some mortgage servicers have failed to follow guidelines set by the Home Affordable Modification Program (HAMP), a five-month-old Obama administration program that pays servicers at least $1,000 for each loan modification. The Government Accountability Office, meanwhile, issued a report last week concluding that there are “gaps” in the Treasury Department’s oversight of the program.

Sen. Chris Dodd, D-Conn., has asked the administration to investigate alleged abuses of the program. The alleged violations by mortgage servicers include:

Charging advance fees for loan modifications.

Telling homeowners they must be in default before becoming eligible for loan modifications.

Starting foreclosure proceedings even while a homeowner is under consideration for a loan modification.

“If true and widespread, abuses of this kind threaten to undermine the effectiveness of the HAMP program and deny the relief on which so many Americans are depending for their financial stability,” Dodd, the chairman of the Senate Banking Committee, wrote in a July 23 letter to Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan.

‘Inconsistent Results’ From Mortgage Companies

The administration announced earlier this year that more than 55,000 borrowers have been offered loan modifications under HAMP. But that figure pales in comparison to the number of homeowners facing foreclosure — more than 2 million as of the first three months of the year.

“HAMP, despite its lofty goals, has not yet been able to contain the foreclosure tsunami,” the National Consumer Law Center’s Diane E. Thompson said in written testimony presented to the Senate Banking Committee.

The Obama administration has acknowledged some of the criticism.

“There appears to be substantial variation among servicers in performance and borrower experience, as well as inconsistent results in converting trial modification offers into actual trial modifications,” Geithner and Donovan wrote in a letter earlier this month inviting mortgage servicers to meet with the administration. “We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share.”

A report earlier this month indicated that the Obama administration may be considering new efforts to help borrowers stay in their homes. Under one proposed solution, borrowers would surrender ownership of their properties but would be allowed to remain living there for several years through a rental agreement, Reuters has reported. Another idea is to have the government make mortgage payments on behalf of struggling borrowers; for unemployed borrowers that could include receiving a housing stipend along with unemployment benefits, sources told Reuters.

When asked about the reported proposals, an Obama administration official told ABC News that that the administration “is considering many ideas as part of our ongoing efforts to serve taxpayers by stabilizing the economy.”

“We are still in the early stages of discussion and no decisions have been made on this matter,” the official said.

The servicers, meanwhile, contend that they are doing their part.

“The servicers that have signed up to participate in the program are taking their obligations very seriously,” said Jeannine Bruin, a spokeswoman for GMAC, one of more than two dozen mortgage servicers, including Bank of America, CitiMortgage and Wells Fargo, that take part in the program.

Bruin told ABCNews.com that GMAC had beefed up staff and staff training to address homeowner requests for help. GMAC officials, she said, were working “nights and weekends” on loan modifications.

“Can the program be improved and enhanced? I’m sure it can be,” she said, “but it’s not for any lack of effort for our part.”

For now, homeowners like the Gomezes are turning to third parties for help.

The couple attended a workshop Friday held by the Neighborhood Assistance Corporation of America, a group that helps homeowners obtain loan modifications from mortgage servicers. The group recently kicked off a 10-city tour to meet with and counsel local homeowners. (Watch coverage of its first stop, a workshop in Cleveland, here.)

The Gomezes hope that NACA will help them work out an agreement with their mortgage servicer, GMAC. Pedro Gomez said he had no luck appealing to the company directly.

GMAC said that while the company could not comment on specific customer cases, there could be “a logical explanation for why” Gomez didn’t qualify for the modification he wanted.

Criticism of the Government

Bruce Marks, the head of the Neighborhood Assistance Corporation of America, said the association has successfully achieved loan modifications for homeowners by putting together modification agreements and sending them electronically to mortgage servicers for their approval.

But the government, he said, should be requiring servicers to do that work for themselves. “It is really outrageous that a nonprofit has to step into to fill the void,” he said.

The GAO, in its report last week, said it’s unclear when the government will have a system in place to address “noncompliance” by mortgage servicers.

The report prompted more government criticism, this time by Sen. Chuck Grassley, R-Iowa.

“This report heightens my fear that Treasury will give out billions of dollars without ensuring the spending will work as intended,” Grassley said in a written statement. “There’s real doubt that this money will prevent foreclosures in the long term and help legitimately struggling homeowners. Once this money is spent, it will be gone. Unfortunately, Treasury isn’t ready.”

So often, lenders are not helping borrowers to get loan modifications and save their homes. Homeowners that are late on their mortgage payments, or going to be late, that aren’t getting anywhere with their lenders are encouraged to seek legal counsel. In fact, it is essential that these homeowners that aren’t getting the help that they need from their lenders speak with an attorney who specializes in mortgage loss mitigation to ensure that, not only do they receive a loan workout, but that the workout they recieve is grants the very best terms possible.

As more pressure is being placed upon banks to grant mortgage loan modifications, a trend is developing in which, often, many banks will “modify” mortgages to “help” borrowers by merely lowering their interest rate a quarter or eighth of a percent. Banks typically avoid granting a loan modification now, and instead, offer re-payment plans, in which, the amount that the borrower is past due, plus outrageous legal fees, is worked back into the loan.

This of course results in an even higher payment! It makes absolutely no sense to increse the payments on a homeowner is late on their mortgage, and simply can’t afford the payments.

If you are a homeowner that is having trouble making ends meet, please consider ModificationZoom for ethical, effective, and guaranteed loss mitigation representation to help you get the very best mortgage loan modification.

A Federal Housing Finance Agency (FHFA) report released today shows that loan modifications done by Fannie Mae and Freddie Mac have increased 57 percent compared to the fourth quarter of 2008. Nearly 37,000 loan modifications have been completed in Q1 of 2009.

The FHFA regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks (”Enterprises”).

What’s interesting is that this report takes into account loan modifications under the Streamlined Modification Program started in November 2008 but does not include volumes from the Home Affordable Modification program (HAMP), which was announced and still in development in March 2009.

“The use of serious loan modifications by Fannie Mae and Freddie Mac has risen dramatically,” said FHFA Director James Lockhart. “As a result, more homeowners are seeing payments significantly reduced and fewer people will lose their homes.”

Details from the report show that since March 31, 2009, for Fannie and Freddie and the loan banks’ 30 million residential mortgages:

• Modifications represented 43 percent of all completed foreclosure prevention actions in the first quarter of 2009, up from 33 percent in the prior quarter.
• Modifications with more than 20 percent reduction in monthly payments rose from 2 percent in the first quarter of last year to 52 percent in the first quarter of this year.
• Completed actions to prevent foreclosure — including modifications, forebearance, repayment plans and other measures– rose substantially in the first quarter. Approximately 87,000 of these actions were completed in the quarter, an increase of 20 percent over the prior quarter and more than double the volume of the first quarter 2008.
• Home retention actions – actions that result in a borrower keeping his or her home – accounted for 90 percent of these actions completed during the first quarter consistent with the proportions of foreclosure prevention actions completed over the past year.
• Fannie Mae and Freddie Mac own or guarantee 56 percent of all mortgages outstanding but only 22 percent of all seriously delinquent loans.
• Although the Enterprises’ mortgage delinquencies continued to increase during the first quarter of 2009, the rate of delinquency is consistently lower than the industry average. As of March 31, 2009, the percentage of Enterprises’ mortgage loans that were at least two payments past due (60 plus days delinquent) was 3.6 percent, compared with 6.1 percent for VA loans, 10.2 percent for FHA loans and 9.2 percent for the industry average.

Source: Diane Tuman, Zillow