New numbers are out today from the Hope Now Alliance. You may remember last fall, when Treasury Secretary Henry Paulson announced this new effort, bringing together mortgage servicers, counselors and investors to help borrowers in trouble.
Well, the Alliance reports that in July it did a record number of loan “workouts,” which can consist of either real modifications of the loans, like changing the interest rate or the principal, and repayment plans, which help borrowers to get current by putting off payments or tacking missed ones on the end of the loan.
There were more than twice as many repayment plans as loan modifications, which isn’t the best news because repayment plans can be temporary and don’t always keep the borrowers in the home forever. However, since the Alliance began almost a year ago, 686,000 loans have actually been modified, compared to 827 thousand foreclosure sales during the same period. So it’s definitely something.
The biggest beef we hear from loan counselors trying to help borrowers is that it is difficult to get in touch with lenders/servicers/banks, etc., and when you do, it’s often a lengthy and/or futile process to get a response.
But Faith Schwartz, the executive director of Hope Now, says that is quickly changing, thanks to a breakthrough with servicers in June.
“Servicers have agreed to a series of new guidelines out there that will help give statuses to borrowers, commitments to time lines, to housing counselors who in the past have not been able to get through to the servicer in an efficient manner,” says Schwartz.
“Setting expectations, setting up clarity around what servicers can do for borrowers has been a huge breakthrough. By August or September, I’d say we’re going to have a lot more uniformity in how borrowers are treated and work through tough issues,” she added.
Let’s hope so.
Housing & Economic Impact:
- Fannie Mae
- Freddie Mac
- Lehman Bros.
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- Mortgage Applications Rise for 1st Time in 3 Weeks
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