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Obama mortgage rescue: Only 9% getting help

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I tried to get into the refi program. Problem is Im on time and never late and have a good credit scoreconfused.gif

 

I figured a program like this would help productive and responcible people.

 

I was hoping to lower my interest rate. They also told me since my expenses are not more then I make I dont qualify.

 

Someone even had the balls to say, "dont pay your mortgage a couple months, then you will get in...cwm13.gif

 

Sorry but thats not my style. I might try again though soon since Im hearing many are complaining about the program..

 

My main reason is to have extra money after bills. Money I can save and spend. Unfortunately I have a habit of doing the right thing...redface.gif

 

NEW YORK (CNNMoney.com) -- The Obama administration's first progress report on its foreclosure prevention plan confirms it is off to a slow start.

 

Just 9% of delinquent borrowers in trial modifications so far, the Treasury Department said Tuesday. That translates into 235,247 loans that were at least two months delinquent.

 

Under fire for the program's rocky start, the Obama administration says it is on pace to help up to four million homeowners over the next three years. The initiative was announced in February and the first institutions to join began accepting applications in April.

 

Tuesday's report comes a week after the administration called servicers to Washington, D.C., to discuss ramping up the program's implementation after hearing a flood of complaints from borrowers. Officials want to see 500,000 loan modifications under way by Nov. 1.

 

By releasing the servicers' progress reports, the administration is hoping to hold institutions responsible for their performance. The monthly reports will allow the public to see which institutions are lagging in implementing the plan.

 

Institutions have extended modification offers to 406,542 troubled borrowers, or 15% of those behind in payments. The bulk of trial modifications have been done by a handful of servicers.

 

Performance was very uneven among the 38 servicers participating in the program. Saxon Mortgage Services, a subsidiary of Morgan Stanley (MS, Fortune 500), led the pack, putting 25% of its delinquent loans into trial modifications, followed by Aurora Loan Services, a subsidiary of Lehman Brothers Bank, with 21%.

 

GMAC Mortgage, which is partly owned by the federal government, put 20% of its delinquent loans into trial modifications.

 

Among the major banks, JPMorgan Chase (JPM, Fortune 500) came in first with 20% of late loans in trial modifications, followed by Citigroup (C, Fortune 500) with 15%. Wells Fargo (WFC, Fortune 500) and Bank of America (BAC, Fortune 500) lagged with 6% and 5%, respectively.

 

Servicers contacted acknowledged they need to improve their performance.

 

Wells Fargo said it will eliminate its backlog within weeks, attributing it to the time lag between when the government announced the initiative and released the guidelines. It will soon be able to send eligible borrowers the trial modification agreement within 48 hours.

 

"While the majority of our customers who request help are getting through to us and receiving the help they need, we know we've fallen short of our customer-service goals in some cases," said Mike Heid, co-president of Wells Fargo Home Mortgage.

 

Other major servicers with more modifications under their belt said they too need to do more.

 

"We are pleased with our numbers and with what we have been able to accomplish in the past two months," Citigroup said in a statement. "But we can, and want to, do more."

 

Chase, which said it has another 150,000 applications to process, is in the midst of training an additional 950 workout specialists hired earlier this year. This brings its modification staff to 3,500 people.

 

"We know we've got more work to do," said Tom Kelley, a Chase spokesman, noting the bank is pleased with its performance to date.

 

Bank of America did not immediately respond to a request seeking comment.

 

Both the Obama administration and the industry are feeling mounting pressure from borrowers who say their servicers are not responding to their calls and applications, losing their paperwork or not making decisions. The financial institutions said they are ramping up their staffing and computer systems to handle the crush of applications.

 

Treasury officials said they are working with servicers to make sure they can implement the program. In addition to increasing staff and training, servicers must treat borrowers with more respect and respond in a more timely manner, said Michael Barr, assistant Treasury secretary for financial institutions.

 

"For us, the bottom line is they need to reach the borrowers," Barr said. "We will be requiring ramped-up effort across the board. We expect them to do more."

 

Meeting the criteria

 

Participation in the program is voluntary, though once an institution agrees to participate, it must offer a trial modification to those who meet the criteria. The 38 participating servicers cover 85% of mortgages.

 

The loan modification plan allows eligible borrowers who are in or at risk of default to lower their monthly payments to no more than 31% of their pre-tax income through a loan modification. Adjusting the loan must recover more value than foreclosing on the home for a modification to be offered.

 

The adjustments are made permanent after the homeowner makes three on-time payments. Homeowners, servicers and mortgage investors receive thousands of dollars in incentive payments in hopes of increasing participation.

 

So far, the government has committed $20 billion to the effort and has said it would provide $75 billion overall.

 

Foreclosures still high

 

Also, the number of people falling behind on their payments continues to mount, especially as unemployment rises. Some 1.5 million people fell into foreclosure in the first half of 2009, up 15% from a year ago.

 

Even President Obama acknowledges that the program is failing to stem the foreclosure tidal wave.

 

"Our mortgage program has actually helped to modify mortgages for a lot of our people, but it hasn't been keeping pace with all the foreclosures that are taking place," Obama said in June.

 

Still, Barr noted that the housing market is showing early signs of stabilizing. The value of U.S. homes increased 0.5% in May for the first time in nearly three years, according to a report last week from financial data company Standard & Poor's and economists Case-Shiller. It was the first increase in the monthly 20-city index since July 2006.

 

Pending home sales rose 3.6% in June, the fifth straight month of increases, according to a report released Tuesday.

 

"We're beginning to see some encouraging signs," Barr said

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you know, some people just bought too much house.

 

wouldn't have mattered if they changed the interest rate to negative 5%.

 

they still couldn't afford the payments.

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View PostThat sucks dude... Refinance through another lender.

 

Yeah, the problem is due to equity falling, I went form 20% to 0%. Because of that my refi rate takes a hit, plus the fees for the refi..

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View PostI tried to get into the refi program. Problem is Im on time and never late and have a good credit scoreconfused.gif

 

 

I figured a program like this would help productive and responcible people.

 

 

I was hoping to lower my interest rate. They also told me since my expenses are not more then I make I dont qualify.

 

 

Someone even had the balls to say, "dont pay your mortgage a couple months, then you will get in...cwm13.gif

 

 

Sorry but thats not my style. I might try again though soon since Im hearing many are complaining about the program..

 

 

My main reason is to have extra money after bills. Money I can save and spend. Unfortunately I have a habit of doing the right thing...redface.gif

 

 

 

As a responsible guy working and paying your bills and trying to live within your means, paying taxes..... you don't need help, so your tax money goes to make better lives for people who didn't do that. Sucks, doesn't it?

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Ironic you should bring this up. I have been working on a simple interest rate only re-finance through USAA. No cash out, pretty much an interest rate cut from when I took the mortgage 12 years ago (no other re-fi's).

 

Everything was going along clickety-clack until we got to a small balance held by Wamu/Chase (pool loan). They have held things up for three weeks refusing to agree to a subordination, because they don't like the fees on the new mortgage (in a nutshell).

 

Yesterday, I hit the wall, after speaking to almost every idiot that works for Wamu/Chase (I got one guy that made sense and I went with his advice) I drove up tot he local Chase branch and wrote a check to pay off the stinking loan. USAA will extend my rate lock yet again if they can't get the lien release from the *******s at Chase. When I drilled down on the script readers @ Wamu/Chase, all they could chant was that they had rules to ensure the bank was protected. I had to ask if the rules were new, since the OoTS shut WAMU down and gave it to Chase, no answer, only silence.

 

I had to close with one last shot at Wamu/Chase, and asked them why they felt qualified to sit in judgement on USAA when it was still an operating entity without TARP funds and they were not?

 

I hadn't planned on paying that loan off this month or even this year, but now feel that in the long run, its for the best. I haven't been that mad in a long, long time. I also asked if their willingness to help me would be different if I had not been always on time and kept the loan current... Again, no answer.

 

Jeff B.

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