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Posts marcados ‘FORECLOSURE’

FORECLOSURE AND LOAN MODIFICATION

Foreclosure Contractors Face New Scrutiny

From States

by Marian Wang 
ProPublica

While federal and state officials investigating flawed foreclosures have largely focused on holding the banks accountable and bringing relief to wronged homeowners, officials in a few states have begun targeting the more obscure middlemen of the foreclosure scandal. (mais…)

FORECLOSURE FRAUDS

Beware of Foreclosure Rescue Scams

The threat of losing your home can lead some homeowners to take desperate measures to find companies who claim to reduce your monthly mortgage payment or take other steps to save your home. (mais…)

EYE ON LOAN MODIFICATION

Amidst Foreclosure Crisis, Proposed Budget Would Slash

Housing Counseling

by Paul Kiel
ProPublica

.Thousands of people attend a Neighborhood Assistance Corporation of America (NACA) Save the Dream event for assistance with having their mortgages restructured to avoid foreclosure on Oct. 16, 2009, after Daly City, Calif. (Justin Sullivan/Getty Images)
  • One of the primary sources of money for counseling agencies is a program administered by the U.S. Department of Housing and Urban Development. The budget agreement would reduce that program’s funding from $88 million to zero. The effect on agencies would be “absolutely devastating,” said Judy Hunter of the Rural Community Assistance Corporation, a non-profit based in Sacramento, Calif. (mais…)

Eye on Loan Modifications

Government Vows to Curb Banks’ Foreclosure Practices, But

Enforcement Still a Question Mark

by Paul Kiel
ProPublica

Iowa Attorney General Tom Miller, left, speaks as North Carolina Attorney General Roy Cooper, right, listens at a news conference at the National Association of Attorneys General spring meeting on March 7, 2011, in Washington. The attorneys general, along with several federal agencies, sent the largest mortgage servicers a proposal last week related to the servicers' foreclosure abuses last week. (Luis M. Alvarez/AP Photo)Iowa Attorney General Tom Miller, left, speaks as North Carolina Attorney General Roy Cooper, right, listens at a news conference at the National Association of Attorneys General spring meeting on March 7, 2011, in Washington. The attorneys general, along with several federal agencies, sent the largest mortgage servicers a proposal last week related to the servicers’ foreclosure abuses last week. (Luis M. Alvarez/AP Photo)

Hosts of federal agencies and regulators, along with the 50 state attorneys general, are hard at work on laying out new rules for banks and mortgage servicers. Those rules will likely require servicers to transform their approach to handling homeowners facing foreclosure. (mais…)

FORECLOSURE SCANDAL

Backgrounder: A Closer Look at MERS, the Industry’s

Controversial Mortgage Clearinghouse

by Marian Wang
ProPublica

.Yoshikazu Tsuno/AFP/Getty Images file photo

As we’ve noted in several posts, one player that has been featured in the foreclosure scandal and is currently under federal investigation is the Mortgage Electronic Registration System, or MERS. (mais…)

FORECLOSURE

False Attorney Signatures Cast New Doubts on Foreclosures

by Sasha Chavkin
ProPublica

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A house under foreclosure that is now bank-owned in the Spring Valley area of Las Vegas on Oct. 15, 2010. (Mark Ralston/AFP/Getty Images)

Many foreclosures have been thrown into question because of flawed documentation such as inaccurate affidavits describing a mortgage’s history. But three recent court cases point to another type of flaw in foreclosure filings that could place thousands more cases in doubt: false attorney signatures on court documents. (mais…)

Eye on Loan Modifications

Banks Modifying Tiny Percentage of Mortgages in Need

by Paul Kiel
ProPublica

The government’s mortgage modification program has fallen short on any number of counts. Here’s yet another: It’s failed to boost the number of modifications relative to the need.

Every month, we post a graphic rundown of the new numbers from the administration’s program. Here are the latest results, broken down by each bank or mortgage servicer participating in the program [1].

 

For months, the numbers have been showing the same trend. More and more homeowners have been disqualified from the program (despite the fact that most continued to stay current on their payments [2]). Meanwhile, fewer homeowners are entering the program.

The government’s effort is unlikely to come anywhere close to meeting the administration’s stated goals [2] of offering help to three to four million homeowners. It also seems unlikely to spend anywhere near the full $50 billion originally set aside for the program [3]. The number of homeowners in ongoing mortgage modifications through the program could start shrinking soon [4].

With the program’s reach declining, the administration has pointed to what else banks are doing to curb the problem. Banks and other companies servicing mortgages are providing far more modifications on their own: In September the ratio was more than four to one.

Earlier this month, we looked at the quality of those modifications [5]. Although they’re better than they used to be (most used to actually raise the homeowner’s payments), the banks’ in-house modifications are on average half as generous as those the government sponsored. Homeowners in those modifications are also twice as likely to default as those with government mods.

Here’s a look at the overall number of modifications: In September of this year, servicers completed about 147,000—only about 28,000 through the government’s program and the rest outside of it, according to HOPE Now [6]. Meanwhile, about 5.2 million mortgages were in default (60 days or more behind), according to LPS Applied Analytics [7]. Put those two numbers together, and you get a sense for the number of modifications being done relative to the need: In September, servicers provided modifications for about 2.9 percent of the total delinquent loans.

As this chart shows, that’s about how many the industry was doing before the government’s program launched in March, 2009:

In February of 2009, the industry did about 127,000 modifications, while there were about 4.4 million delinquencies. That comes out to about 2.9 percent.

You can see a big dip in the graph that coincides with the program’s launch. That’s because servicers agreed to evaluate all homeowners for the government’s program before considering other modifications. Servicers couldn’t keep up, and a huge bottleneck resulted. They didn’t start approving significant numbers of homeowners for government-sponsored modifications until November of last year. It took servicers until this March, a year after the program’s launch, to return to their previous level. We’ve reported [8] many times on the extended delays [9] homeowners have suffered.

The bottom line is that for homeowners, modifications are just as rare as they were before the program launched. The absolute number of modifications is higher now than it was then, but so are the number of defaulted loans.

That doesn’t mean the rest of these mortgages have been sold through foreclosure. For the most part, loans have gone months upon months with no resolution. In January of 2009, the average mortgage in the foreclosure process had been delinquent for 319 days, according to LPS Applied Analytics. In September of this year, that number was 484. There are over 2 million loans in the foreclosure process, but there were only about 120,000 foreclosure sales in September, according to HOPE Now.

There’s likely to be a spike in foreclosures down the line unless there’s a major change. Speaking in July, Jeff Carbiener, the president of Lender Processing Services, which provides the systems many servicers use to process payments and foreclosures, told analysts on an earnings conference call that a “significant flow [of foreclosures] has to come through the pipe at some point in time.” He said there had been “some success” with modifications, but they hadn’t “taken a dent” out of the number of loans in the foreclosure process.

 

It remains to be seen how much of an impact the recent robo-signing scandal [10] will have on that impending wave of foreclosures. Recently, analysts from Moody’s concluded that the problems will “cause delays rather than inability of servicers to foreclose.” The state attorneys general, meanwhile, hope to use their investigation [11] to increase the number of modifications [12].

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