Remember that huge housing bill passed by Congress in July in which the FHA would re-write toxic mortgages if lenders would only reduce loan balances by 10%? Apparently lenders are saying "Thanks for thinking of us, but no thanks, we'll do our own workouts. Have a nice day!" From a CNNMoney.com story:
As part of the massive housing rescue bill passed by Congress in July, troubled borrowers will be able to refinance their home loans with the backing of the Federal Housing Authority (FHA) starting on October 1.
But at a congressional hearing today in Washington, lenders didn't seem terribly enthusiastic about the program, dubbed Hope for Homeowners.
The program calls for lenders to voluntarily refinance delinquent mortgages by reducing loan balances to 90% of a home's current market value. The new loans will be backed by the FHA, which will be receive 5% of the new loan balance as a payment from the lender...
Bank of America (BAC, Fortune 500) managing director Michael Gross said that the new FHA program was just one of many loan workout options that the bank is employing.
And he stressed that the bank's own efforts to save troubled loans, especially those B of A inherited when it bought Countrywide, have been successful. He said that the bank increased its loan modifications by 450% this past August compared with August of 2007.
When asked whether the program would be considered a last resort by lenders, all the members of the panel, including Gross, agreed that it would be.
And Mary Coffin, speaking for Wells Fargo (WFC, Fortune 500), testified that relatively few of her bank's borrowers owe more on their mortgages than their homes are worth, meaning they would be unlikely to benefit from the FHA's refinancing and write down program...
Even Sheila Bair, who heads the Federal Deposit Insurance Corporation, praised the FHA program but said that few borrowers with IndyMac, the bank that the FDIC took over in July, would use it.
She said that her responsibility to maximize profits for the investors would probably limit the number of IndyMac borrowers who would take advantage of Hope for Homeowners
3 comments:
We have a mortgage with Countrywide that they have been unwilling to renegotiate for 6 months now. The second balloon mortgage is in arrears and they are threatening foreclosure. They seem to be lying when they say they're helping people. They're behaving more like white-collared mafias than banks. -N.Ross, Farmingdale, NY
"We have a mortgage with Countrywide that they have been unwilling to renegotiate for 6 months now. The second balloon mortgage is in arrears and they are threatening foreclosure."
You should be aware that these FCSB’s (short for federally chartered savings banks )operate with absolute impunity and answer to no one.
These banks have no fear of the mortgage borrower since by design Congress has never passed any federal consumer banking regulations. This means that the borrower has no rights to question, contest or object to their foreclosure in the same regulatory system that these FCSB's lend their mortgage money.
The federal government does not, will not, and can not tell these banks how to lend their mortgage money or how treat their mortgage borrower.
One should also note, the regulator, the OTS does not and will not enforce what few lending regulations that involve these banks. The OTS although responsible for supervising and enforcing the Equal Opportunity Act, The Truth in Lending Act, the Fair Credit Reporting Act does not answer questions, interpret, administer,investigate or enforce any part of these consumer regulations.
This large government regulator does not have the staff, the time, the knowledge or the expertise to supervise these savings banks. The OTS is a like a bear without claws and teeth. Their job basically is to protect the system, the wealthy and powerful banks if you will.
Let alone when you have a morgage company like wells fargo that says they will drop the huge attorney fee's and then they dont. And charge you 20,000 plus on top of your errors this is not helping homeowners. This is makeing it worse. If any body can bring this to like maybe these workouts would work rather than hurt us more.
Post a Comment