Fannie Mae Announces Deed for Lease (D4L) Program
November 6, 2009
Yesterday Fannie Mae announced a program that lets homeowners lease back their former homes after they have returned the deed to the lender in a deed-in-lieu of foreclosure transaction. The program is called the “Deed for Lease” program or “D4L.”
It’s unclear how this would be better than mortgage modification or how this will work for the homeowners (who must pay market rents on former homes they may not have been able to afford in the first place), but it’s likely to improve the foreclosure statistics.
To read more about the program, see this link.
Bank of America, Wachovia, Wells Fargo HAMP Modification Performance Evaluated
August 9, 2009
The Making Home Affordable Plan has released its August 2009 Servicer Performance Report. The report analyzes the progress of the HAMP mortgage modification program.
The Data
To date, Bank of America modified just 4 percent of eligible loans. Wells Fargo has modified 6 percent.
Wachovia Corp. has modified a mere 2 percent of eligible loans. (Wachovia was taken over by Wells Fargo in December 2008.)
Several servicers- each of whom received significant amounts of TARP funds– report modifying ZERO mortgages.
Wachovia / Wells Fargo’s Response
Mike Heid, co-president of Wells Fargo’s mortgage unit, told MSNBC the company tries to sign up most homeowners with one phone call. Heid claims Wells Fargo then sends eligible homeowners a trial offer within two days. http://www.msnbc.msn.com/id/32281959/ns/business-real_estate/from/ET/
The Reality
This, however, is in marked contrast to what our office has heard from homeowners. Many homeowners come to us for help after trying for several months to work with their servicers directly.
Homeowers report that Wachovia and Wells Fargo have consistently failed to process modification request packages.
Once contacted by the homeowner for follow-up, the servicers claim additional documentation is needed– even though the homeowner already submitted all documentation the servicer requested.
However, the servicers do not attempt to notify the homeowners they need additional information. So, the files sit untouched until he homeowners contact the servicer to find out what is going on.
Weeks might go by before a homeowner discovers his or her file has been idle. But, time is obviously of the essence for people trying to avoid foreclosure.
What can be done?
The HAMP incentives were meant to discourage this kind of inefficiency. But apparently the incentives are not working.
As a side note, it does not seem possible the servicers are fulfilling their duty to their shareholders by leaving so much incentive money on the table. Recall the HAMP incentives pay servicers for every loan they modify while the loan is still current.
Our office would like to see some HAMP guidelines that would put a time limit on servicers’ processing, at least for Fannie- and Freddie- owned or guaranteed loans.
A guideline requiring the servicers to notify homeowners when they need additional information would be helpful as well.
What does this mean for homeowners?
If you plan to request or already have requested a HAMP modification:
- Start early. You should request a modification even before your mortgage is delinquent. Maybe you are current now, but you have had a reduction in income due to a layoff. If you qualify for a modification, apply. It will take a very long time for the paperwork to be processed. By the time you are in true crisis, hopefully your request will have been processed. But see below.
- Call your servicer at least weekly to ask the status of your file and whether you need to provide additional information.
- If your servicer seems to be making up requirements as it goes along, check to see if it is complying with the HAMP guidelines in its handling of your file. There have been many reports of homeowners being rejected for HAMP modifications for reasons not permitted under the HAMP guidelines. In fact, Freddie Mac has announced it will start auditing servicers for compliance with the HAMP guidelines.
- File a complaint with Freddie Mac if your servicer seems to be violating the HAMP guidelines and your loan is a Freddie Mac loan.
- File a complaint with the Department of the Treasury if you think your servicer has violated HAMP guidelines in processing your file.
To learn more, see these links:
The Making Home Affordable Servicer Performance Report August 2009
MSNBC: Mortgage modifications moving at snail’s pace
Maryland Foreclosure Prevention Project: Foreclosure Solutions Workshop September 12, 2009 in Baltimore County
August 5, 2009
There will be a Foreclosure Solutions Workshop on Saturday, September 12, 2009 in Baltimore County from 9:00 a.m. to 5:00 p.m. hosted by Congressman Elijah E. Cummings.
Homeowners should bring: (1) all paperwork related to current and former mortgages (including loan application, settlement paperwork and lender statements); (2) all foreclosure notices or threats of foreclosure received; and (3) information about monthly household budget (income/expenses).
DATE: SATURDAY, September 12, 2009
TIME: 9:00 a.m. to 3:00 p.m.
LOCATION: Woodlawn High School, 1801 Woodlawn Dr., Gwynn Oak, MD 21207
***This location is handicap accessible.***
Maryland Foreclosure Prevention Project: Foreclosure Solutions Workshop on Saturday, August 29, 2009 in Prince George’s County
August 5, 2009
There will be a Foreclosure Solutions Workshop on Saturday, August 29, 2009 in Prince George’s County from 9:00 a.m. to 4:00 p.m. hosted by the Offices of Governor Martin O’Malley and Lt. Governor Anthony Brown.
Homeowners who pre-register are guaranteed a free legal consultation.
Homeowners should bring: (1) all paperwork related to current and former mortgages (including loan application, settlement paperwork and lender statements); (2) all foreclosure notices or threats of foreclosure received; and (3) information about monthly household budget (income/expenses).
DATE: SATURDAY, August 29, 2009
TIME: 9:00 a.m. to 4:00 p.m.
LOCATION: Charles Herbert Flowers High School
ADDRESS: 10001 Ardwick Ardmore Rd., Springdale, MD 20774
REGISTRATION: Home-owners should call (800) 756-0119 to register.
***This location is handicap accessible.***
Recent Testimony: Bankruptcy Mortgage Modification Necessary to Enhance HAMP’s Effectiveness
July 29, 2009
On July 9, the House Judiciary Committee’s Subcommittee on Commercial and Administrative Law heard testimony on the effectiveness of voluntary mortgage modification efforts, including the Obama Administration’s Home Affordability Modification Program (HAMP). “Effectiveness” was defined as preventing foreclosures.
Irwin Trauss, of Philadelphia Legal Assistance, testified on behalf of NACBA (The National Association of Consumer Bankruptcy Attorneys.)
Trauss is overall supervisor of the Save Your Home Philly Hotline, which has handled over 10,000 calls from homeowners facing foreclosure. He is also one of the creators of the Philadelphia Court of Common Pleas Foreclosure Diversion Program.
In his testimony, Trauss gave numerous examples of servicers ignoring the requirements of HAMP. Servicers sometimes told homeowners they were not eligible to apply, and often denied applications for reasons that did not comply with the program guidelines.
He also described the program’s failure to help many large sub-groups of homeowners.
Trauss concluded his testimony by stating that “absent significant leverage on the part of homeowners to force a change in behavior, the majority of servicers will continue to find ways to avoid meaningful modifications despite HAMP.
“The only way to change their behavior to the extent required to make meaningful modifications common is to provide the homeowner with leverage over the servicer, such as the threat of a bankruptcy judge imposing a modification.
“The availability of such an option for homeowners would likely complement voluntary programs such as HAMP and the Diversion Program and substantially increase the chances that meaningful long lasting modifications will result.”
The above post was partially excerpted from a National Association of Consumer Bankruptcy Attorneys (NACBA) email alert.
NACBA is a national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy.
HAMP Incentives: What Does Your Lender or Mortgage Servicer Get For Modifying your Mortgage?
July 27, 2009
HAMP: What is it?
The Home Affordable Modification Program (HAMP) was established in March 2009 using 50 billion in funds from the Troubled Asset Relief Program (TARP).
HAMP aims to get mortgage servicers and lenders to modify mortgages in default or in danger of default.
Which mortgages are covered by HAMP?
Your mortgage might be eligible for a HAMP modification if your mortgage servicer participates in the program OR if your mortgage is owned or guaranteed by Fannie Mae or Freddie Mac.
Even if your servicer is not an official participant in the program, it may participate in order to receive the incentive payments described below.
If you need a mortgage modification due to a hardship, ask your servicer to help you modify your mortgage. Do not be discouraged if your servicer is not listed as an “official” participant in the HAMP program.
To find out if your lender or servicer participates in the program, call your loan servicer or visit the Making Home Affordable website.
Once your servicer has agreed to participate, you must determine whether your mortgage meets certain criteria.
You must:
- Be the owner-occupant of a one to four unit home;
- Have an unpaid principal balance that is equal to or less than $729,750 (higher limits apply for dwellings with 2-4 units)
- Have a first lien mortgage that was originated on or before January 1, 2009;
- Have a monthly mortgage payment (including taxes, insurance, and home owners association dues) greater than 31 percent of your monthly pre-tax income; and
- Have a mortgage payment that is not affordable due to a financial hardship you can document.
Why would servicers or lenders participate?
Earlier, similar programs did not provide incentives for lender participation. These programs were not terribly successful.
Consequently, HAMP offers lenders and servicers incentive payments from the government for every mortgage they successfully modify. Some of these incentives are described below:
HAMP Incentive Payments
Lenders are eligible to receive:
- A bonus incentive of $1,500 for any loan modified while the borrower is still current (including less than 30 days delinquent), subject to some restrictions.
- Reimbursement for part of the difference between the “new,” modified mortgage payment and the “old” mortgage payment. The government would pay this to the lenders for up to five years.
- Some compensation to offset losses on previously-modified loans
Servicers (including lenders who service their own loans) are eligible to receive:
- An initial payment of $1,000 for each successful modification.
- Annual payments of up to $1,000 for the first three years following successful modification if the borrower stays in the program.
- A bonus incentive of $500 for any loan modified while the borrower is still current (including less than 30 days delinquent).
Borrowers are eligible to receive:
- Principal reductions of $1,000 for each year they make mortgage payments on time under the program.
- This applies for the first five years of the borrower’s program participation.
- For more information, see the Department of the Treasury website.
HAMP Effectiveness Reviewed by Senate Banking Committee
July 20, 2009
This post is parially excerpted from the MortgageOrb article “Senate Banking Committee Focuses on Hamp” by John Clapp.
On July 28, 2009, there will be a meeting between Treasury officials and servicers participating in the government’s Home Affordable Modification Program (HAMP).
In anticpation of this meeting, the Senate Banking Committee held a hearing Thursday morning (July 16) in an effort to help lawmakers gauge HAMP’s progress – or lack thereof – since its introduction in February.
The hearing included testimonies from the Treasury, as well as Wells Fargo and Bank of America servicing execs. It highlighted the program’s administrative obstacles and shortcomings.
In recent weeks, lawmakers have increasingly expressed concern that HAMP, originally projected to save up to 4 million homes, is both underperforming and being implemented too slowly.
Committee members also focused heavily on the inconsistent application of HAMP’s guidelines. Several senators noted cases of borrowers being denied entry into HAMP despite meeting eligibility requirements.
Participants also discussed the Treasury’s recently announced plan to release performance data in early August.
The data will be broken down according to servicer, and thus will presumably highlight those servicers who are underperforming in their HAMP implementations.
Since the department announced its intentions to release this data, HAMP administrators have seen increased activities from certain servicers.
Housing Counseling Services (D.C.) Announces Foreclosure Prevention Clinic Dates for August 2009
July 18, 2009
The following is partially excerpted from The Housing Complex blog.
Housing Counseling Services Inc. is a nonprofit foreclosure prevention group in Washington, DC.
This week it announced it will start holding foreclosure prevention clinics once a week due to the increase in client demand in Washington, D.C.
[RealtyTrac recently reported foreclosures had jumped 39.46 percent between May and June 2009 in DC.]
Foreclosure prevention clinics will be held at Housing Counseling Services at 2410 17th Street, N.W., Washington, DC 2009.
Following are the scheduled clinic dates:
Wednesday, August 5th, 12:00 P.M.
Wednesday, August 12th, 12:00 P.M.
Wednesday, August 19th, 12:00 P.M.
Wednesday, August 26th, 6:00 P.M.
For more information, contact:
Housing Counseling Services Inc.
www.housingetc.org
2410 17th St NW # 100
Washington, DC 20009-2724
(202) 667-7006
Get directions
Maryland Foreclosure Prevention Project: Foreclosure Solutions Workshop on Wednesday, August 19, 2009 in Baltimore County
July 14, 2009
There will be a Foreclosure Solutions Workshop on Wednesday, August 19, 2009 in Baltimore County from 5:00 p.m. to 8:30 p.m. hosted by the Baltimore County Office of Community Conservation.
Homeowners who pre-register are guaranteed a free legal consultation. Homeowners should pre-register by calling (410) 887-3124.
Homeowners should bring:
- All paperwork related to current and former mortgages (including loan application, settlement paperwork and lender statements);
- All foreclosure notices or threats of foreclosure received; and
- Information about monthly household budget (income/expenses).
Date: WEDNESDAY, August 19, 2009
Time: 5:00 p.m. to 8:30 p.m.
Location: New Town High School, 4391 New Town Blvd., Owings Mills, MD 21117***
Preregistration: Homeowners should pre-register by calling (410) 887-3124.
***This location is handicap accessible.
Maryland Foreclosure Prevention Project: Foreclosure Solutions Workshop on Wednesday, May 27, 2009 in Baltimore City
May 4, 2009
There will be a Foreclosure Solutions Workshop on Wednesday, May 27, 2009 in Baltimore City from 6:00 p.m. to 9:00 p.m. hosted by Associated Black Charities.
Pre-registration guarantees a free legal consultation.
Homeowners should bring: (1) all paperwork related to current and former mortgages (including loan application, settlement paperwork and lender statements); (2) all foreclosure notices or threats of foreclosure received; and (3) information about monthly household budget (income/expenses).
Hosted by:  Associated Black Charities
Date: WEDNESDAY, MAY 27
Time: 6:00 p.m. to 9:00 p.m.
Location: The Gala Center
Address: 1700 Hill Drive, Baltimore, MD 21224***
For Homeowner Pre-Registration: Call (410) 659-0000, x1231
***This location is handicap accessible.
The above was excerpted from a Maryland Foreclosure Prevention Project email alert.
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