950,000 Mortgages Modified

Posted on December 27, 2008. Filed under: Foreclosure Defense, Loan Modification | Tags: , , , , , |

Hope Now, an alliance of mortgage servicers, counselors and investors, said this week that the mortgage industry completed nearly 950,000 mortgage modifications in 2008.
But there are questions lingering about just how effective those modifications have been: A separate report from the Office of the Comptroller of the Currency and the Office of Thrift Supervision found that more than half of the mortgages modified in the first quarter were at least 30 days delinquent after six months.
“The underlying cause of both the worsening economy and the growing number of re-defaults is that loan servicers have thus far failed to modify loans often enough or, when they do, to use the type of sustainable loan modifications most likely to succeed,” said Michael Calhoun, president of the Center for Responsible Lending, in a news release.
“Sustainable” modifications can be made by lowering the interest rate, lowering the principal balance, extending the term of the loan or some combination of the three, he said.
“Of no help in this situation is a modification that increases monthly payments to bring a family in arrears up to date; such a solution is appropriate only for families who can afford their loan but have fallen behind because of a one-time setback such as a divorce or temporary job loss or sickness,” he said.
Recent research by Valparaiso University School of Law professor Alan White suggested that “half the modifications on the types of loans at the root of this crisis don’t lower monthly payments,” Calhoun said.
Considering the ailing economy, there’s no doubt the foreclosure problem will continue into 2009. Hopefully, foreclosure prevention efforts ahead will be even more effective in helping people stay in their homes.

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Maryland program to stave off foreclosures

Posted on August 19, 2008. Filed under: Uncategorized | Tags: , , , , , , , , |

Homeowners fearful of losing their homes because of looming defaults and foreclosures could get help through a new state initiative.

Called Homeowners Preserving Equity, the HOPE program offers a commitment of $100 million in private capital to help about 500 homeowners to refinance and switch adjustable-rate mortgages to fixed-rate mortgages.

The state also plans to use $10 million from the state’s mortgage insurance program as an incentive to encourage lenders to provide another $200 million to refinance another 1,000 homeowners.

The goal is to prevent an expected wave of foreclosures due to the recent proliferation of “exotic” loans which include adjustable rate, balloon payment and negative amortization loans.

“The HOPE initiative is an innovative package of foreclosure prevention measures, combining refinancing, mortgage insurance, incentives and homeownership counseling to make sure Maryland families can preserve the equity they have built up in their homes,” said Ray Skinner, secretary of the state Department of Housing and Community Development, in a statement after a June 13 press conference in Dundalk.



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