Friday, April 25, 2008

Foreclosure Prevention Falls Short

Citing a new national report on subprime mortgages, Arizona Attorney General Terry Goddard said that efforts of servicers and government officials to prevent foreclosures have increased but still fall short of the need to effectively respond to the foreclosure crisis and prevent millions of unnecessary foreclosures.

The report was issued Tuesday by the State Foreclosure Prevention Working Group, a group of state Attorneys General and banking regulators working to prevent home foreclosures.  An earlier report by the group was issued two months ago.

“The collective efforts of servicers and government officials to date have not translated into meaningful improvement in foreclosure prevention outcomes,” the report said. Little progress has been made despite widely-publicized campaigns to encourage homeowners in trouble to seek help and initiatives by servicers to “fast-track” loan modifications.

“In major respects, the subprime servicing data for January 2008 are nearly unchanged from October 2007,” the report said.

Major findings of the State Foreclosure Prevention Working Group’s report include:

* Seven out of 10 seriously delinquent borrowers are still not on track for any loss-mitigation outcome.  The number of borrowers in loss mitigation has increased, but it has been matched by an increasing number of delinquent loans.

* Data suggest that servicers’ loss-mitigation departments are severely strained in managing the current workload. The report noted that almost two-thirds of all loss-mitigation efforts started are not completed in the following month.

* Homeowners who do receive loss-mitigation help are most likely to receive some form of loan modification.  The Working Group said such modifications are a solution that seems to offer better long-term prospects for successful resolution of problem loans.  Many servicers are replacing their use of repayment plans in favor of loan modifications.

“We continue to see a rising number of foreclosures in Arizona, which is a significant drag on Arizona’s economy,” Goddard said.  “This report confirms that efforts made by servicers to prevent unnecessary foreclosures are not enough.  We need to explore additional approaches to prevent tens of thousands of unnecessary foreclosures in Arizona.”

“Progress is being made, but there is a long way to go,” said Iowa Attorney General Tom Miller, a founder and leader of the State Foreclosure Prevention Working Group.  “We still see a tremendous gap between the need for loan work-outs and the options in place today.”

“Our collaborative efforts to date have failed to prevent a large number of unnecessary foreclosures,” said North Carolina Deputy Commissioner of Banks Mark Pearce.  “We need to find solutions that fit the size of the problem we are facing.”

The State Working Group said it believes more robust approaches to avoid preventable foreclosures are necessary. The Working Group said servicers, investors and state officials should work together on:

* Developing a more systematic loan work-out system to replace the intensive, individual, “hands-on” loss-mitigation approach.  The State Working Group said it will continue to work with servicers to promote systematic solutions to modify loans in a more streamlined and efficient manner.

* Slowing down the foreclosure process to allow for more work-outs.

Targeted efforts to slow down subprime foreclosures may give homeowners and servicers more time to find solutions to avoid foreclosure, the report said.  Many states have enacted or are considering such measures, the report noted.

The State Working Group also encouraged the federal government to develop innovative approaches that recognize the extent and scale of the foreclosure crisis.

The State Foreclosure Prevention Working Group began as a cooperative dialogue of state officials and mortgage servicers in September 2007.
Since October 2007, the Working Group has been collecting data from the largest subprime mortgage servicers, with 13 of the largest 20 servicers participating, representing approximately 60 percent of subprime mortgage loans serviced.

The State Foreclosure Working Group is led by representatives of the Attorneys General of 11 states (Arizona, California, Colorado, Iowa, Illinois, Massachusetts, Michigan, New York, North Carolina, Ohio and Texas), two state banking departments (New York and North Carolina) and the Conference of State Bank Supervisors.

mortgage fraud

1. I am hoping that someone can help me with the mortgage problem I am having

   In January of this year, we contacted our mortgage company, Wells Fargo in an attempt to lower our monthly mortgage payment. Our family business has been declining in recent months, and we cannot afford to pay the total monthly due right now.

   We were first told to freeze payments immediately & to fax a profit & loss statement, along with proof of income (or 3 months of bank statements in our case). In order for us to go forward on reducing our monthly payments.

   After doing so-and having to fax all 27 pages over a dozen times, since they apparently didn’t receive the first 11 faxes I sent, they finally confirmed they got it & it was going to take 30-90 days, and again-they advised me not to make the payments. I asked why & a representative explained that the reason to freeze the payments, is that when we get approved for the mitigation/modification (they were never very clear & kept telling me they are the same thing..) all of the past due payments would be put back into the total balance, ‘like a fresh start’ were there words exactly.

   They told me to just call every couple of weeks to see if we were approved or not. I did this for over 3 months & they continued to tell me the same thing.

   2 days ago (3 months later) I got 2 letters in the mail from wells Fargo.

   The first one said that unfortunately our application for a re-modification was denied & the decision was based on us not being able to ‘come to an agreement’. Then it continued on stating that ‘there may be other options, however in our case there are no other options’.

   I opened up the other letter & it was a statement reflecting the following information;

   Total Due by 5/1/08:  almost $17,000

   In a highlighted box to the right, it stated that the balance was due in full & if not paid IMMEDIATLEY, foreclosure proceeding would begin.

   I immediately called wells fargo & got disconnected 5 times literally, after not giving up, I spoke to a rep that informed me the reason for our request being denied was ’missing information’. Apparently they called just days before their decision & ‘left a message’ requesting more current documentation.

   First off, they didn’t leave a message, I check the answering machine daily and never received anything from them.

   Secondly, after taking over 3 months to decide that they needed more information—because they took too long, they cant wait 3 days?

   What ever happened to US Mail?

   A letter would have been sufficient, since I never got their so called ‘message’.

   The representative advised me of the following options;

   1. Pay the delinquent balance of $17,000 in full.

   2. Request a re-payment plan, which would require me to pay $8,000 up front & the rest I could pay off in addition to my monthly payment-actually making it higher

   3. Re-apply for the modification, HOWEVER-the house will be in foreclosure & obviously ding my credit, but they would freeze the ‘force sale’ process while my request was in review. And she informed me of something else I was never told before…

   That a modification would only reduce my payments a total of $200 MAXIMUM/month anyway. Is this true? 

   About an hour after I got off the phone, a woman showed up saying that she was a representative of Wells Fargo & she needed to take pictures. She had a paper that said ‘property inspection’ on it. coincidence? I dont know. 

   I am confused, scared, and not sure what to do here.

   What concerns me the most, is that I have a lot of equity in my house & now I am beginning to think I may loose it.

   Current market value is about $1.3m

   I owe $360k on it

   My payments (including escrow/property taxes) are $4059.00/month & I am on a 15 year fixed rate: 5.5%

   With a maturity date of 9/19

   Last payment was made in January of 08.

   If there is anything you can tell me or do to help me get in the right direction, please let me know. Thank you again for your time & I hope tpo be hearing from you….

   Anya Burnham
   949-494-0823 home
   949-903-0432 cell

   anya@gopui.com email

   Property Address:

   277 canyon acres drive

   Laguna Beach, CA 92651

   Posted by  on  04/29  at  10:59 AM

2. The foreclosure epidemic is a sad thing, and it is interesting that we as US citizens can donate money to the countries over seas and have Amrican Idol donate millions, and presidential Candidates spending money to bash each other and raise millions to do so, why! I would bet if one time in our lifes that a presidential Candidate would donate to hey the city of New Orleans, here is 8 mil, build 70 more houses, hey American Idol, 170 mil, her is money to help foreclosures to stay out, we live in a society that cares for others and not our own home.  That Presidential Candidate would be elected as president.  American Idol would have more viewers to give. Foreclosures, has anyone ever thought that the Al Quida might have had something to do with this financial crisis, the investor waive, from California, Nevada, Phoenix, New Mexico, Texas, the riches from them buying up real estate and driving our market upward, cash buyers, out bidding, it could have started with 1000 people, and they bought and bought cash properties, inflating neighborhood values one at a time, until the rest of the Market caught on, the financial war!

   Posted by  on  04/29  at  10:31 PM