Loan Modifications: Logjam continues
Help for Florida’s troubled homeowners is coming more slowly than in the rest of the nation.
A Treasury Department report Tuesday shows that only 12.4 percent of Florida borrowers who are at least two months behind on their mortgages have entered into a new deal – known as a trial loan modification -- through the Obama administration’s Making Home Affordable Program.
That puts the state behind the national pace, where 20 percent or one out of five troubled loans have been modified under the administration’s program through October.
Nationwide, 3.2 million borrowers are at least 60 days behind on their mortgage payments.
That includes many South Floridians. In September, 17.8 percent of home loan payments in Palm Beach, 20.7 percent in Broward and 25.1 percent in Miami-Dade were 90 days past due or more, according to the latest figures from First American CoreLogic, a real estate analysis firm.
Floridians trying to hold on to their homes are trying to get loan modifications in large numbers. Howard Nelson, a vice president at BB&T Bank in Sarasota and president of the Mortgage Bankers Association of Florida, said lenders are busy processing numerous loan applications. “The program is working from what we see,” he said.
But Florida Attorney General Bill McCollum, who has received more than 450 complaints about mortgage lenders across the state, said more needs to be done. “I am outraged by the reports I am receiving from homeowners telling me that banks are giving them the run-around instead of assisting them with their mortgage refinancing and loan modifications,” said McCollum, a candidate for governor.
The Treasury report, the first ever to break down results of the loan modification program by state, shows that Florida has the second highest number of loan modifications among the states. The 82,614 loans in a trial modification here dwarf the number recorded in states with large populations including New York (28,773) and Texas (21,260).
The Treasury report did not specify how many South Florida homeowners are affected and only covered those loan modifications under the new federal program.
A trial modification is the offer extended to the homeowner for the first three months of the loan. If the trial period is completed successfully and the homeowner submits the required information, trial modifications can be made permanent.
The leading state for loan modifications was California, where 134,609 cq loan modifications were in place through October. That encompasses about 19 percent of California’s eligible borrowers.
Nationwide, the Treasury said 650,994 loans have been modified. When the Obama administration launched the program, its stated goal was to help as many as 4 million troubled homeowners.
Among large lenders, Bank of America, which faces hundreds of complaints in Florida about troubled or stalled loan modifications, placed near the bottom of the list in the pace of loan modifications. Bank of America, which absorbed Countrywide Financial in 2008, is one of Florida’s largest lenders.
The Making Home Affordable report from the Treasury Department shows Bank of America has completed 14 percent of loan modifications for its eligible troubled borrowers – typically those having trouble paying the mortgage for their primary residence, purchased before Jan. 1, 2009.
The bank has 136,994 loan modifications in progress nationwide out of 990,628 eligible borrowers. Figures for Florida were not available.
Only Wachovia, with 3 percent of modifications started nationwide, had completed a smaller percentage, among large national banks.
Wells Fargo acquired Wachovia at the start of this year.
There’s a reason why Wachovia has not modified more loans under the Obama program, said Wells Fargo spokeswoman Teri Schrettenbrunner. Many Wachovia loans allowed borrowers to pay interest only. If those loans were modified following the program’s guidelines, borrowers would be paying interest as well as principal and their payments would increase. So those borrowers are being offered modifications under other programs, she said.
The top mortgage firm in the report nationwide was Saxon Mortgage Services, which services loans in Florida. The Treasury said Saxon has offered 44 percent of eligible borrowers a loan modification, followed by CitiMortgage, at 40 percent. GMAC is third, with 35 percent.
Bank of America is the subject of 220 complaints to the Florida Attorney General’s office about failed or stalled loan modifications, the attorney general’s office said Tuesday. That was a revised figure, down from the 452 complaints the attorney general’s office reported last month.
Spokeswoman Ryan Wiggins said the office later discovered that it had mistakenly included inquiries, which were not complaints, in its original figure.
Bank of America issued a statement Tuesday saying that nationwide, it has helped almost 600,000 customers to obtain a loan modification through the Making Home Affordable program and other programs.
Bank of America did not release current Florida loan modification figures.
Its results under the Obama administration program “continue to grow,” the statement said.
Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.
Comments
GMAC has been very helpful with our modification-We are waiting for our second trial mod paperwork to come through, but they are helping us with no problems so far.
Posted by: DP | November 10, 2009 11:49 AM
And it looks like they have a lot of people who feel the same. GMAC was number three among the lenders in getting loan mods done.
Posted by: Harriet Johnson Brackey | November 10, 2009 11:53 AM
I haven't had any luck with Bank of America nor Country wide. After many, many phone calls nothing.
Posted by: Eric | November 10, 2009 12:19 PM
GMAC has been stalling us since February 09! We have had to send in ALL the required documents for our modification "three" times now! The only deal they have tried to offer us has been by lowering our mortgage payment down from $2300 to $2100 a month and $80 of that difference is our over payment to our impound account! Now they are also stalling us with something about "an investor"? What investor? Our attorney says GMAC won't release any information about who that investor is! We bought our home in Nov 2004, made all the payments, on time for over four years, then when we asked for help it has been nothing but stall, stall, stall..........
Posted by: Teresa Lamb | November 10, 2009 12:22 PM
Countrywide offered me a modification in December of 2008. I signed and notarized the docs the first week of January 2009, and so far, nothing, except for a foreclosure filing. Bank of America (fka Countrywide) is the worst. This is costing me a fortune in legal fees.
Posted by: Shouldve Known Better | November 10, 2009 1:34 PM
As a homeowner consultant for modifications with Amerihope Alliance, I have noticed that although the banks seem to be getting backed up with modifications submitted by borrowers, the ones submitted through professional companies seem to be getting approved quickly. I feel alot of it is pertaining to knowing the paperwork but to be honest, the banks seem to be lacking full on communication from what I have experienced. I deal with clients dealing with the bank who have been waiting since Jan. and Feb. asking for assistance on straightforward cases ALMOST ENTIRELY because the bank refuses to communicate with then or respond to their already submitted paperwork. GMAC has by far been the most proficient bank in getting mods done, with 46% of their in-house borrowers going on trial plan, and 23% of those getting the successful mod. In the banking industry, thats a wonderfully large number. I think as awareness comes through, the banks are becoming more receptive to the debate of "modification vs starting a foreclosure". By far the introduction of the Making Home Affordable Plan has most significantly promoted "mortgage restructuring" to the common borrower and the banks are having a hard time keeping up. Bank of America seems overwhelmed with the new consolidation of the Countrywide loans, and in turn their customer support, although existent, is slacking off into a hit or miss. I think as things get more stable in the housing market through the new plans being set in motion, banks will adjust, until then, I think people have a much stronger chance of success for assistance using a professional firm, at least for right now.
Posted by: Kevin | November 10, 2009 2:41 PM
"GMAC has by far been the most proficient bank in getting mods done, with 46% of their in-house borrowers going on trial plan, and 23% of those getting the successful mod"
Kevin-
I have heard some people do not get approved for a permanant mod, as you indicated in your post. Do you know why that may be? My bank assured me this won't happen, but I am waiting for 2nd stage to start. 23% seems like a low number of peple who have entered into mods.
ANy insight you can give would be appreciated.
Posted by: DP | November 10, 2009 4:35 PM
DP-
To be honest, you can shoot me an email and we can talk about some factors I believe are the cause, KevinO@amerihopealliance.com is my email. I think alot boils down to presentation of documents and a knowing of exactly the process, which is why it seems the "average" borrower has trouble even getting the communication from the bank they need. Although it IS a low number, there are several other banks I can fill you in on that do not have anywhere near a number above 10%, so although its very low, it is something that other banks should take into consideration and set a benchmark plain and simple.
Posted by: Kevin | November 10, 2009 5:39 PM
You know what a spokesperson for Chase told me today? The number one problem for the banks is getting the proper paperwork at the end of the trial modification from the borrowers. Apparently, you have to submit it all again at that point. Borrowers don't seem to know or understand.
Posted by: Harriet Johnson Brackey | November 10, 2009 5:43 PM
I did a loan modification with CitiMortgage in Aug.09. I asked if this could be done with only income because at the time I was receiving unemployment benefits, do you know that after making one payment, I lost my benefits because of a false state made buy my former employer. Citi will not talk to me until the trial period in ended. I expect them to foreclose at the end.
Posted by: Frank Lomba | November 10, 2009 5:59 PM
Harriet-
Chase is absolutely correct. Paperwork IS an issue, HOWEVER, I would say alot of that has to do with the customer/borrower being left in the dark.
Frank-Citimortgage is a tricky lender. In regards to you being foreclosed on, you really need to stick that foot in the door. You shouldnt be punished for mistakes made by an irresponsible employer. Citi can be receptive when taking the time and effort, I recommend using a professional company with a strong reputation and tangible success record. A little research and you should be able to find it, shoot me an email and I can help you differentiate LEGITIMATE mod companies vs. Scams. That seems to be the reason so many borrowers are going it on their own with little or no success.
Posted by: Kevin | November 10, 2009 6:09 PM
Nice post! I think it has helped me a lot in applying for a loan modification. I believe thought that a mortgage loan modification adviser can greatly lower monthly payments to an affordable level. They are just better skilled in working out a better solution for us.
Posted by: Mortgage loan modification advice | November 11, 2009 12:22 PM
If you low income mortgage loan modification might not be the option for you. As foreclosure rates keep climbing the government should start doing more about it.
Posted by: Loan Modification Advices | November 14, 2009 5:48 AM
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Saddening!
But there is hope!
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Posted by: aiza@home loan | February 21, 2011 4:00 AM
The questions that most people ask is: does the program have any catch? Most people also want to know what this program does to your taxes and how exactly does it change the monthly payments.
Posted by: Angol oktatás | July 11, 2011 4:29 AM
Federal modification loan for homes are made to help those whose houses are in threat of immediate or gradual foreclosure. These are the people whose mortgage is too big that they are definitely having trouble with the payments if they choose to try to stop foreclosure.
Posted by: Fogorvos | July 11, 2011 5:45 AM
That puts the state behind the national pace, where 20 percent or one out of five troubled loans have been modified under the administration’s program through October.
Posted by: Led | August 11, 2011 3:45 AM
Do not agree to make payments to a third-party. Some scams involve having the homeowner pay a company with the promise that they will make your mortgage payments.
Posted by: Tőzsdefórum | August 11, 2011 3:54 AM
Be wary of any company that offers a guarantee of stopping foreclosure regardless of your circumstances. Keep in mind that oral promises and agreements relating to your home are not usually binding, so a guarantee in an ad or from their representative may be meaningless.
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