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White House is Prodding Mortgage Servicers to Modify More Loans

Mon Jul 13, 2009 by on Florida Foreclosures

It looks like mortgage servicers are going to woodshed for deliberately not modifying mortgages and allowing foreclosures to sore! its about time! Here is the letter that Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan sent to 25 mortgage-servicing firms last week:

“We are writing to you as a participant in the Administration’s Making Home Affordable (MHA) program. As you are aware, the Home Affordable Modification Program (HAMP) under MHA is designed to help responsible but at-risk homeowners modify their mortgages in order to lower their monthly payments to sustainable levels and avoid foreclosure. This program is a critical part of our collective effort to stabilize the housing market and promote economic recovery.

Since we published our detailed guidance, we have started to see a significant ramp-up in the number of trial modification offers and trial modifications underway. However, much more progress is needed. There appears to be substantial variation among servicers in performance and borrower experience, as well as inconsistent results in converting trial modification offers into actual trial modifications. We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed and achieve the objectives we all share.

In order to assess our progress under the program and improve the speed of implementation, we request that you designate a senior liaison, with whom you have regular contact and who is authorized to make decisions on behalf of you as CEO, to work directly with us on all aspects of MHA. We will invite this person to meet with senior Treasury and HUD officials on July 28 to discuss full implementation of the program. To prepare for that meeting, we ask that your liaison send us a letter by July 23, detailing specific steps that your organization will take towards effective implementation and compliance. Similarly, we invite you or your liaison to provide suggestions on ways that we can improve program design.

In conjunction with this meeting, we plan to take three important steps to improve the program’s performance. First, we will begin publicly reporting results under the program. By August 4, we will begin issuing monthly reports with servicer-specific performance measures, including the number of trial modification offers each servicer has extended to eligible borrowers, the number of trial plans that are underway; the number of final modifications, and eventually, the long term success of those modifications. The purpose of these reports is to provide a transparent and public accounting of individual servicer performance as well as overall program performance. We will discuss with you the content of these reports at the July 28 meeting.

Second, we will work with servicers such as you to set more exacting operational metrics to measure the performance of the program, such as average borrower wait time for inbound

borrower inquiries, the completeness and accuracy of information provided applicants, document handling, and response time for completed applications.

Third, in order to minimize the likelihood that borrower applications are overlooked or that applicants are inadvertently denied a modification, Treasury has also asked Freddie Mac, in its role as compliance agent, to develop a “second look” process pursuant to which Freddie Mac will audit a sample of MHA modification applications that have been declined. Freddie Mac will coordinate with servicers such as you to address specific cases that arise and to address general operational weaknesses where errors prove more systematic.

We are asking that all servicers expand servicing capacity and improve the execution quality of loan modifications in order to help the sizable number of homeowners at risk of foreclosure and eligible for the program. This will require adding more staff than previously planned, expanding call centers beyond their current size, providing an escalation path for borrowers dissatisfied with the service they have received, bolstering training of representatives, developing extra on-line tools, and sending additional mailings to borrowers who may be eligible for the program.

We are confident that together we can improve the speed and efficacy of the MHA program in a manner that is consistent with your aims as a leading financial institution.

Our shared goal must be to make the program as successful as possible in keeping Americans in their homes and providing stability to the housing market. With your continued help, we believe that we can achieve this goal.

Sincerely,

Timothy F. Geithner Shaun Donovan”

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/09/AR2009070902928.html

Tags: Donovan, Geithner, HAMP, HUD, Loan Modification, loan modifications, MHA, mortgage modification, Obama Administration, trial modification

One response to “White House is Prodding Mortgage Servicers to Modify More Loans”

  1. Sounds to me like the quintessential bankster puppet that Geithner is, is covering his six. That way, when all that funding for the “program” is gone and it becomes obvious that the clear intention of the banks/perpetrators of this whole “wall street securitized toxic loans scam” was and still is to defraud the American public and destroy the economy by design, for profit, Geithner has his walk out of jail free card because he wrote this little letter, which is clearly disingenuous, at best. What is this BS???? “We’ll work with you on exacting the metrics and Freddy Mac, as a “compliance agent,” will have a second look process to audit a “sample” of denied applications? WTF? That’s gobbledegook for “Time to cover my ass because people are really getting pissed off and finding out about our Machiavellic Draconian agenda, and when they start clamoring for heads to roll and for a-holes to be burned at the stake, I’m going to need a little leverage to make them think I’m one of the good guys or this whole NWO agenda is going to end up biting me in the ass!” – That’s just my opinion, and I could be wrong, but I doubt that I am wrong. My a-hole meter is a fine-tuned instrument.