Mortgage Modifications Slow in First Quarter
Posted on May 7th, 2012
The number of permanent mortgage modifications dropped by almost a third in the first quarter this year, according to an alliance of mortgage professionals today.
Hope Now, a group consisting of mortgage serviciers, investors and non-profit counselors, reported that only about 207,000 struggling homeowners had their mortgage loans permanently changed in the first three months of 2012, down 31 percent from the 298,449 modified loans from the first quarter of 2011.
Of the loans modified this year rouhly 147,000 were reworked privately by banks, and 60,225 were modified as part of the Obama administration’s Home Affordable Modification Program (HAMP.)
Overall, the total number of borrowers helped by HAMP is continuing to grow, even if at very slow pace. On Friday, the Treasury Department released statistics showing that as of March the program has helped about 795,000 homeowners stay in their homes when they otherwise might have fallen into foreclosure. That number has grown 12,000 since February’s 783,000 total.
Still, HAMP, which was launched in spring 2009, was originally designed to save as many as 3 million borrowers from foreclosure. And while there have been 1.8 million homeowners who have started the program at some point, only 43 percent of those have made it through. Some didn’t qualify for HAMP’s terms and others were still unable to make payments after trial modifications and had to drop out.
There is still plenty of room for new enrollees, with the government having spent only about $2.9 billion of the $30 billion allotted from the 2008 financial industry bailout. Banks and lenders receive money as incentives every time they help modify a customer’s loan, by reducing payments, lowering interest rates, or reducing principal balances. The last of those is the least popular with only 52,000 borrowers having had their principal cut down, according to the Treasury statistics.
Filed under Interest Rate News, Mortgage Loan News, foreclosure, mortgage modifications, payments, principal | No Comments »
Watch Out For the Newest Foreclosure Scam in California
Posted on April 12th, 2011
Scams involving purported mortgage modifications and foreclosure assistance have abounded since the California foreclosure crisis in 2009. The California Department of Real Estate recently warned consumers about the newest version of these scams. (To learn more about foreclosure, check out Nolo’s Real Estate & Rental Property area.)
In this scam, a “lawyer” invites homeowners to join a mass joinder or class action against a bank or mortgage company. The “lawyer” promises results such as stopping foreclosures, lowering mortgage payments, lowering principal balances, or eliminating mortgages altogether. “Clients” must pay a nonrefundable fee, often between $3,000 and $9,000 to join the litigation. The litigation is a sham, and the clients receive nothing.
Scammers often solicit victims by mass mail or advertise the “litigation” on the Internet. The solicitations often sound legitimate, and require clients to sign lengthy retainer agreements.
To learn more about this scam, and how to protect yourself, check out the California Department of Real Estate’s consumer alert.
by Guest Blogger Kathleen Michon
Filed under foreclosure, mortgage modifications | No Comments »