Loan Redos Get Tangled in Thicket of Red Tape

Posted on June 17, 2009. Filed under: Foreclosure Defense, Housing, Loan Modification, Mortgage Audit, Mortgage Law | Tags: , , , , , , , , , , , , |

More than 9% of 45 million U.S. mortgages, or about four million loans, were delinquent in the first quarter of 2009, according to the Mortgage Bankers Association. That is the highest level since the group started tracking such data in 1972. As of the end of April, though, just 518,155 home loans had been modified, says Hope Now, a coalition of mortgage companies, investors and housing counselors.

Getting a mortgage modified can take months, slowed by thin staffing and mountains of paperwork. With so many loans bundled and sold to investors, it’s sometimes hard to figure out who even owns them. The new federal program requires borrowers to meet slightly different requirements than bank programs do, meaning banks need to navigate two procedures.

Chase’s mortgage business collects monthly payments and handles other chores on $1.5 trillion of mortgages. It owns about a fifth of those loans, having sold the rest to investors. Since October, the bank says it has prevented about 180,000 foreclosures, mostly through mortgage modifications. An additional 15,000 loans modified by the bank follow the guidelines set by the White House plan.

Roughly 3,500 Chase employees are trying to restructure troubled mortgages, and 1,000 counselors have been added this year to cope with demand. Chase has opened 24 walk-in offices around the U.S. where borrowers can seek face-to-face assistance.

via Loan Redos Get Tangled in Thicket of Red Tape –


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One Response to “Loan Redos Get Tangled in Thicket of Red Tape”

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Chase employees will surely have a hard time on restructuring this four million troubled mortgages. Also, I can see the dreadful effect of 2009 recession to the mortgage business. I just hope and pray that most mortgage lenders can find ways to solve their problems.

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