Lenders Rally Behind Loan Modification Plan

Posted on March 6, 2009. Filed under: Finance, Foreclosure Defense, Housing, Loan Modification, Mortgage Audit | Tags: , , , , , , , , , , , |

The U.S. Treasury Department on Wednesday launched the Making Home Affordable program, which was announced recently by President Barack Obama. The program’s two branches — refinance and modification — are estimated to apply to some 9 million homeowners either behind on payments or at risk of falling behind due to dropping home values, job loss, or other hardship.

The modification program will be effective only or mortgages originated on or before Jan. 1, 2009 on owner-occupied, single-family one- to four-unit properties that serve as a primary residence, the Treasury said. Borrowers in bankruptcy are not eligible, but those facing foreclosure will see foreclosure action suspended during a trial period or while borrowers are considered for preventative options. Within hours of the announcement, the government-sponsored entities (GSEs) and a variety of the largest U.S. lenders and servicers began rallying in support for the program.

Freddie Mac (FRE: 0.37 -9.76%) quickly announced the launch of two initiatives to compliment the administration’s housing plan. Freddie’s new relief refinance mortgage product, which can be as high as 105 percent of the property’s value, is designed to reduce interest rates or amortization terms for borrowers “to improve their position for long-term homeownership success….” Freddie also rolled out a modification initiative to begin April 1; borrowers with Freddie-owned or -guaranteed mortgages originated on or before Jan. 1 will be eligible to receive a workout “in some cases…before they fall behind on their mortgage payments,” Freddie said in a media statement.

http://www.housingwire.com/2009/03/05/lenders-gses-rally-modification-plan-support/

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The Government’s New Loan Modification Plan

Posted on February 19, 2009. Filed under: Bailout, Banking, Finance, Loan Modification | Tags: , |

Feb. 18 (Bloomberg) — JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the government’s new housing plan was “comprehensive” and would help the bank modify more loans.

“The plan is good and strong, comprehensive and thoughtful,” Dimon, 52, said in an interview today. “I think it will be successful in modifying mortgages in a way that’s good for homeowners.”

President Barack Obama today announced a $275 billion program that includes cutting mortgage payments for qualified borrowers and expanding the role of Fannie Mae and Freddie Mac in curbing foreclosures.

Dimon also said he’s “concerned” the bank may lose employees because of new U.S. restrictions on executive pay. He said he would like to see more details and clarifications about how the rules could apply.

via Bloomberg.com: Worldwide.

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U.S. Approves Plan to Help Citigroup Weather Losses

Posted on November 24, 2008. Filed under: Bailout | Tags: , |

Citigroup executives presented a plan to federal officials on Friday evening after a weeklong plunge in the company’s share price threatened to engulf other big banks. In tense, round-the-clock negotiations that stretched until almost midnight on Sunday, it became clear that the crisis of confidence had to be defused now or the financial markets could plunge further.

Whether this latest rescue plan will help calm the markets is uncertain, given the stress in the financial system caused by losses at Citigroup and other banks. Each previous government effort initially seemed to reassure investors, leading to optimism that the banking system had steadied. But those hopes faded as the economic outlook worsened, raising worries that more bank loans were turning sour.

President-elect Barack Obama was also working over the weekend to shore up confidence in the rapidly faltering economy. Mr. Obama signaled that he would pursue a far more ambitious plan of spending and tax cuts than he had outlined during his campaign and planned to announce his economic team on Monday. Some Democrats in Congress, meantime, were calling for the government to spend as much as $700 billion to stimulate the economy over the next two years. Federal Reserve Chairman Ben Bernanke was involved during the discussions.

Mr. Obama’s expected choice for Treasury secretary, Timothy F. Geithner, the president of the Federal Reserve Bank of New York, played a crucial role in the negotiations on Friday but took a less active role once news of his appointment was circulated. While the initial focus of government officials was to help the embattled company, they may also seek to draw up an industrywide plan that could help other banks.

The plan could herald another shift in the government’s financial rescue. The Treasury Department first proposed buying troubled assets from banks but then reversed course and began injecting capital directly into financial institutions. Neither plan, however, restored investors’ confidence for long.
http://www.nytimes.com/2008/11/24/business/24citibank.html?_r=2&hp

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