Obama’s Home Affordable Update
If you’ve been trying to contact your lender about refinancing or modifying your mortgage through President Obama’s new plans, you’ve likely been frustrated. Few, if any, servicers have finalized their plans or trained their loss mitigators or how they’re going to handle the new plans.
While I don’t know how long it’s going to to take your servicer to actually implement the President’s Home Affordable plans, the opinion I expressed in my Home Affordable Loan Modification and Home Affordable Refinance plans articles has been proven accurate.
I said that most, if not all, of the nation’s largest servicers would participate before it’s all over. And according to the Association of Community Organizations for Reform Now (ACORN) and a study they just finished, “76 percent of outstanding mortgage loans are serviced by companies who have committed to implementing the plans”.
But what’s that mean for you and your mortgage?
According to this Default Servicing News Article,
Based on ACORN’s findings, mortgage servicing giants Wells Fargo, Citi, Chase, and Bank of America are committed to implementing the plan. The report also named other leading servicers as participating, including GMAC, Carrington, EMC Mortgage, Home Loan Solutions, Wilshire, Ocwen, Saxon, Select Portfolio Servicing, US Bank, and Greentree Servicing. According to ACORN, these companies have agreed to implement the plan immediately, and review pending foreclosure activity to determine eligibility for federal modifications in each case. A number of other companies, ACORN said, are continuing to perform an internal review or waiting to see the program’s contracts before committing to participate, but not a single mortgage servicer has decided against participation.
ACORN found varying levels of preparedness with regard to the percentage of loans that might be ineligible for modification because of overly restrictive pooling and servicing agreements (PSAs) with investors. According to ACORN, some companies have no such PSA problems, and many others reported that only a small percentage of outstanding loans are governed by prohibitions on modifications like those promoted by the Obama plan.
ACORN’s survey showed that those companies running into PSA roadblocks have plans to seek waivers from investors to permit modifications under the federal plan. ACORN said the following comment from Ocwen was typical among respondents: “We will be seeking consents and/or waivers from the appropriate parties to be able to include those loans in the program.”
ACORN said it expects further buy-in for the program over the coming weeks as the contracts are released for servicers to sign up to participate. The community activist organization said it will continue to encourage all mortgage servicers to join the program, and has plans to target those “outlier companies that refuse to engage in sensible foreclosure prevention.”
So what should you do now?
Unfortunately, there’s not much you can do except continue to call or contact a HUD counselor. Each servicer will begin modifying or refinancing on their own timeline. And while the administration and public pressure is on them to do it quickly, they all want to make sure they have their ducks in a row before they begin. They all know that once they start, the flood gates will open and they will be working even longer and hard then they are now.
Persistence and a plan are your keys
Once each lender begins taking applications, you can rest assured they’ll start using a triage plan to handle cases. It will probably go something like this:
1. Homeowners in foreclosure. Most lenders have had a foreclosure moratorium in place to stop these foreclosures. They will start by re-evaluating these cases and contacting affected homeowners. If this is you, call your servicer every day until you get an answer.
2. Homeowners in default that have not entered foreclosure.
3. Everyone else.
If you’re not in group one, I would recommend calling at least once a week. From my experience, calling early in the morning, in the mid-afternoon, and on Wednesday or Thursday often result in shorter waiting times.
You also need to have all your paperwork ready to go…see our Take Advantage of President Obama’s Plan article to see what you’ll need.
Finally…you MUST have a real, workable plan for what you’re going to do if your lender doesn’t accept you for a modification or refiance. There are no guarantees the plans will work for you. Hopefully they will…but if they don’t what will you do?
Tags: fannie mae, freddie mac, government regulation, Home Affordable Modification, Home Affordable Refinance, loan modification, loss mitigation, refinance
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