Report criticizes mortgage program

USA TODAY

A federal program that has cut mortgage payments for more than 500,000 homeowners since spring is falling well short of what’s needed to fix the nation’s foreclosure crisis, warns a congressional panel’s report out Friday.

"We’re concerned that not enough foreclosures will be prevented," said Elizabeth Warren, who chairs the Congressional Oversight Panel for the $700 billion financial bailout program approved last year.

The panel’s report says the government’s mortgage modification program has three key problems:

•The kinds of mortgages that will make up growing numbers of foreclosures exceed the program’s eligibility requirements.

•With a goal of modifying only 25,000 to 30,000 loans a week, fewer than half of the predicted foreclosures would be avoided. One in eight homes are currently in foreclosure or default and 250,000 additional foreclosures are initiated monthly.

•Many modifications so far are still in a three-month trial period. As of Sept. 1, only 1,711 homeowners had received permanent modifications under the federal program. And after five years, many will see higher payments.

"The result for many homeowners could be that foreclosure is delayed, not avoided," the report says.

Warren noted that the foreclosure problem has moved beyond subprime mortgages and that rising unemployment will cause more foreclosures.

The government’s program "appears to be targeted at the housing crisis as it existed six months ago rather than as it exists today," she says.

Her panel’s cautionary report follows a more positive assessment Thursday by administration officials.

Under the federal program, the pace of trial modifications now exceeds the weekly pace of completed foreclosures, said Housing and Urban Development Secretary Shaun Donovan.

That means there are more families getting modifications through the federal program each month than families losing their homes to foreclosure, officials say.

"The fact we now have a pace of trial modifications that exceeds the pace of weekly foreclosures is a very important milestone," Donovan said. "We believe we’ve reached an important turning point."

Administration officials acknowledge that the start of a housing turnaround could still sour.

"We’re still living with the risk that housing is going to be a source of weakness in the economy," says Treasury Secretary Timothy Geithner.

Modification activity by servicer

Servicer

Participation Date

Estimated Eligible 60+ Day Delinquency1

Trial Plan Offers Extended

Trial Plan Offers as Share of Estimated Eligible 60+ Day Delinquencies

Trial Modifications Started2

Trial Modifications as Share of Estimated Eligible 60+ Day Delinquencie

American Home Mortgage Servicing

7/22/2009

114,272

6,817

6%

440

0%

Aurora Loan Services

5/1/2029

72,912

37,831

52%

23,889

33%

Bank of America, NA3

4/17/2029

875,917

156,120

18%

94,918

11%

Bayview Loan Servicing

7/1/2009

8,987

2,158

24%

196

2%

Carrington Mortgage Services

4/27/2009

17,149

1,584

9%

584

3%

CCO Mortgage

6/17/2009

4,648

879

19%

3%

CitiMortgage

4/13/2009

208,427

88,472

42%

68,248

33%

Franklin Credit Management

9/11/2009

2,635

0

0%

NA8

NA

GMAC Mortgage

4/13/2009

73,498

31,720

43%

19,331

26%

Green Tree Servicing

4/24/2009

4,114

810

20%

474

12%

HomeEq Servicing

8/5/2009

39,934

444

1%

0

0%

Home Loan Services

4/20/2009

45,822

279

1%

26

0%

J.P. Morgan Chase Bank, NA4

4/13/2009

437,652

163,617

37%

117,196

27%

Litton Loan Servicing

8/12/2009

107,341

13,567

13%

2,229

2%

MorEquity

7/17/2009

2,244

11

0%

0

0%

National City Bank

6/26/2009

40,582

9,267

23%

3,845

9%

Nationstar Mortgage

5/28/2009

29,846

16,974

57%

8,413

28%

Ocwen Financial Corporation

. 4/16/09

68,088

10,650

16%

5,193

8%

OneWest Bank

8/28/2009

109,222

23,017

21%

5,217

5%

Residential Credit Solutions

6/12/2009

1,831

364

20%

313

17%

RG Mortgage Corporation

6/17/2009

3,473

173

5%

64

2%

Saxon Mortgage Services

4/13/2009

79,921

38,332

48%

32,931

41%

Select Portfolio Servicing

4/13/2009

60,848

32,024

53%

15,706

26%

US Bank NA

9/9/2009

28,356

6,925

24%

863

3%

Wachovia Mortgage, FSB5

7/1/2009

75,074

2,896

4%

2,019

3%

Wells Fargo Bank, NA

4/13/2009

310,716

106,427

34%

62,989

20%

Wilshire Credit

4/20/2009

29,153

6,412

22%

2,929

10%

Other SPA servicers6

4,684

185

4%

102

2%

Other GSE Servicers7

242,959

NA

NA

18,808

8%

Total

 

3,100,305

757,955

24%

487,081

16%

p

Posted via email from WESTCHESTER COUNTY DISTRESSED PROPERTY INFORMATION

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