Treasury unveils new Making Home Affordable ‘servicer schedule’…

Update 2: Details released, an epic fail IMO. It could not be more clear they are tinkering to try to make the December modifications data release look better. Obama was to the right of McCain on housing and his team’s total failure to get the job done reflects that.  (a la HOLC, which would have been far cheaper and less ‘interventionary’ if you will).

Diana Olick has the scoop:

The new effort, called a “Modification Conversion Drive,” is a nationwide campaign to “help borrowers who are currently in the trial phase of their modified mortgages convert to permanent modifications,” the Treasury said.Treasury officials said of the 650,000 trial modifications now in place, roughly 375,000 are scheduled to convert to permanent modifications by the end of the year. This new program includes outreach tools, borrower resources and servicer accountability.

The drive will also include what Treasury called “servicer accountablilty” which will require top loan servicers to submit a schedule demonstrating their plans to reach a decision on each loan.

If they don’t meet performance obligations they could be fined, but there are no details yet on how high the fines could go. Servicers will be required to report to the Administration the status of each modification for additional transparency.

In turn, the Treasury is rolling out more web tools for borrowers, including links to documents, and reaching out to state and local community stakeholders to help with outreach.

Last month, the Congressional Oversight Panel for the TARP found less than 2,000 of the more than half million loan mods made since the program began in June had become permanent. The trial period has been extended to five months due to overwhelming paperwork.

The plan was purported to save 3 to 4 million homeowners from foreclosure. It is now estimated there are 7 million delinquent loans in the pipeline….

Update: This part of the WSJ piece today sums it up perfectly:

…Meanwhile, the number of borrowers falling behind on their loan payments continues to outpace the administration’s efforts to help them. Roughly 1.56 million loans that were current in March were at least 60 days past due in October, according to LPS Applied Analytics. That’s more than double the number of trial modifications….

Nothing to write ‘home’ about. They are STILL trying to work on the modifications that have already been in the trial period (before they are FORCED to release the FAILURE RATE!) And they are FAILING to address the real issue that is now in the housing pipeline, JOB LOSS:

Politico:

The Treasury Department and Department of Housing and Urban Development kick off a nationwide campaign to help borrowers, who are currently in the trial phase of modified mortgages under the Obama administration’s Home Affordable Modification Program, convert to permanent modifications. “We are encouraged by the pace at which trial modifications are now being made to provide immediate savings to struggling homeowners,” said the new Chief of Treasury’s Homeownership Preservation Office, Phyllis Caldwell. “We now must refocus our efforts on the conversion phase to ensure that borrowers and servicers know what their responsibilities are in converting trial modifications to permanent ones.”

As part of the administration’s ongoing efforts to hold lenders accountable, top servicers will now be required to submit a schedule demonstrating their plans to reach a decision on each loan for which they have documentation and to communicate either a modification agreement or denial letter to those borrowers.

So they are giving the servicers an actual schedule to respond, how quaint! Wouldn’t that have been nifty from DAY ONE?!? Utter tools to the big banks are these fools. And I like the big banks, but get REAL!

Account liaisons are being assigned, and progress will be aggregated by the end of each business day and reported to the administration. www.MakingHomeAffordable.gov

These graphs are old. Updated. We have now hit 14% delinquency nationwide. And these yahoos are making a schedule for the banks to answer the HAMP applications? Good Grief. Talk about closing the barn door when the cows are all gone. Every frakkin day they wait means they will intervene MUCH MORE down the road. The 78 b from TARP set aside for this is still sitting there b/c the servicers and FAN/FRED are not doing meaningful mods per Elizabeth Warren and the TARP Oversight Panel. Just wait for the Fannie FHA delinquencies to roll over then taxpayers will be bailing out again, ironic no? Sickening, yes!

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November 30, 2009. Tags: , , , , , , , , , , . Economy, Finance, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St.

2 Comments

  1. Jeana replied:

    program was a good plan just was not executed well and the TARP was a Lottery Ticket. Banks wanted it to fail. They did everything they could to sabatoge the program. They did not like taken orders from the govt and wanted no strings. They are more powerful than our govt. They make the rules. The eceonomy will bounce back it will take 3 to 4 yers to get things on track. The banks have the foreclosures and will sell to there investors in a neat little bundle and they again they will profit off the misfortune of the American struggling taxpayers. I believe in letting the might fall.

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  2. Jeana replied:

    Banks are mostly responsible for the delay. They should not receive a dime unless they final loan mods. They are loosing doc, delaying in hopes they can foreclose as long they do not do loan mods they keep addidng fees and fees. It is profitable for the banks and investors. The banks declined to give numbers of final loan mods. Sept 09 only 1.26% trial mods made permanent. The banks will only do what is profitable for them. This is the thanks taxpayers get for bailing out the big banks. They should of let them fall. Bailout the small banks and taxpayers we see how Wallstreet and Aig and Banks work. The banks getting TARP are the banks that have the subprime loans. They get double pay check for creating this downward spiral mess.

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