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Hope Now, OCC Battle Over Numbers Instead Of Problem

Controller of the Currency
Controller of the Currency
Controller of the Currency

I want to know what’s more important: helping troubled borrowers or coming up with exactly the right way to tally exactly how many troubled borrowers have been helped?

I’m in a bit of a snit today because I feel like I’m being played by both sides. A few weeks ago the folks heading up the mortgage industry’s “Hope Now” initiative, which aims at getting lenders and servicers to refi, modify, or set up repayment plans for borrowers, came over to tell me how wonderful they were doing, and how their numbers were improving.

Hope Now claims to have helped over a million borrowers since it hit the road last Fall. This is the coalition of all the major lenders that was set up by Treasury Secretary Henry Paulson.

Well then this week the Comptroller of the Currency, John Dugan, gives a speech and puts out a report with different numbers as to how well the industry is doing (the industry of course being Hope Now, which he doesn’t actually name. “Recognizing the need for more granular data to assess the state of troubled mortgage markets, the OCC began in February to require the nine largest national bank mortgage servicers to submit comprehensive mortgage data on a monthly basis,” the report’s press release reads.

So the OCC report claims that really only 166,879 loans have undergone “loss mitigation action” and of those only 30,906 are real modifications, while the rest are repayment plans, which many argue just put off the pain for the borrowers and cost them more in the end.

Okay, but then I talk to the folks at Hope Now, who say they’re not going to get into a p---ing match with the OCC, but they dispute the OCC report because it only covers a small portion of the servicers. So I go back to the report, and it does in fact say that it covers 40% of mortgages overall, and of that only 9% of those are considered “subprime.” Countrywide is not even part of their coverage, since it’s a thrift, not a bank. (OTS by the way is going to start running numbers soon too, oy!)

So I call the folks at OCC with that Hope Now argument, and they say, oh no no no, or something to that effect. They didn’t mean to criticize the folks at Hope Now and their reporting of the numbers; apparently the media are the ones saying Mr. Dugan is being critical. No criticism at all, they say. Of course Dugan did say of “the industry’s” data in his speech, “Virtually none of the data had been subjected to a rigorous process to check for consistency and completenes. That lack of loan-level validation raised real questions about the precision of the data.” No criticism there.

I understand why all this data is so important; don’t get me wrong. This is the fodder the politicians use to push their bailout plans or push not having a bailout plan. But come on folks. I’ve been out there. I’ve seen the foreclosed properties, and I’ve talked to folks out on the street. The numbers are bad, however you slice them. I think perhaps more resources need to be focused on the problem and less on arguing the numbers.