Posted by: Nick Will in General on Feb 28, 2010
The inestimable Dawn Kopecki of Bloomberg posts this headline yesterday about some possible White House moves to ban some foreclosures -- at least for people under review for permanent loan modification. Right now, foreclosures are still allowed even while homeowners are under review for a loan modification program. Apparently the action under consideration at The White House would now allow foreclosure during that period. This would help. It would help homeowners acting in good faith to keep their homes - and it would help communities who suffer high foreclosure rates, which affect, at least for now, property values.
Feb. 25 (Bloomberg) -- The Obama administration may expand efforts to ease the housing crisis by banning all foreclosures on home loans unless they have been screened and rejected by the government’s Home Affordable Modification Program.
And from The White House on this leaked document:
“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”
She confirmed the authenticity of the document, which hasn’t been made public.
The numbers of who may qualify for modification are a bit staggering:
About 89 percent of outstanding residential mortgage loans are covered by the voluntary HAMP program.
About 2.82 million U.S. homeowners lost properties to foreclosure last year and 4.5 million filings are expected in 2010, RealtyTrac Inc., an Irvine, California data company, said last month.
So far, the HAMP program's intent to help homeowners modify their loans to stem the damage across the nation has been frustrated by the aggressive actions of banks who don't delay foreclosure while homeowners are reviewed for the program. To wit:
"Often confusing." Yeah. That's the understatement of the month based on what we're hearing from responsible homeowners struggling to keep their homes and work with their lenders in good faith. Thankfully foreclosures are not widespread in the Houston and north Houston areas in prime communities, but for the ones affected, I can say with confidence that "frustrating" is not the word these people would use. Well, not the only word. Perhaps just the mildest one.Obama’s foreclosure prevention initiative, announced in February 2009 to help as many as 4 million Americans avert foreclosure, has modified 116,297 loans through steps such as lowering interest rates or lengthening repayment terms. More than 830,000 borrowers received trial repayment plans through January, according to Treasury data.
“Foreclosure processes differ among states, and the process is often confusing to homeowners already facing distress,” Caldwell said in her prepared testimony.