By Mark Huffman
ConsumerAffairs.com
Novermber 30, 2009
Treasury Department officials plan to meet with mortgage lenders today to press them to make more mortgage modifications, according to various published reports.
Reuters quotes an unnamed source as saying Herbert Allison, Treasury's assistant secretary for financial stability, is expected to meet with the mortgage servicers to find out why more loans aren't being modified under the Obama Administration Mortgage Modification Program, launched earlier this year.
Bloomberg News quotes Treasury spokeswoman Meg Reilly as saying the administration plans to announce additional steps to bring about more modifications, in an effort to stem the rising tide of foreclosures. For many consumers, it can't come soon enough.
Marian, of Camarillo, Calif., says she was told by Litton Loan Servicing in June 2008 that she and her husband qualified for a modification. She just needed to send in some documents.
We sent the documents about four time, with weekly calls, Marian told ConsumerAffairs.com. We received emails that said 'thank you for your request, someone will get back to you in 30 to 60 days,' but no one ever did.
Joseph, of Schaumburg, Il., said he believes he clearly qualifies for a modification under the Obama program, but has gotten no where with Wells Fargo.
I have been in this process since January, he told ConsumerAffairs.com in August. The communication initially was great with the negotiator. She had all my information to the point where she felt and told me it would done by the first or second week in June. Well since then, unknowing to myself, my information needed to be updated and I needed to be calling every two weeks for status. They denied the modification because I didn't send them the information they didn't request in the first place.
Bitter Complaints
Many struggling homeowners have complained bitterly as what they see as a run around or gross incompetence on the part of the loan servicers with whom they are dealing.
In early November, Ohio Attorney General Richard Cordray filed a lawsuit against American Home Mortgage Servicing Inc., a Texas-based company servicing more than 12,000 subprime and prime mortgage loans in Ohio. The lawsuit accuses the company of incompetent and inadequate customer service, failure to respond to requests for assistance, failure to offer timely or affordable loss mitigation options to borrowers and unfair and deceptive loan modification terms.
It's not clear whether Treasury is considering similar litigation or if it will use today's reported meeting to apply a little friendly pressure. But the embarrassment accruing to the administration over the issue suggests the meeting might not be so friendly.
The administration is spending $75 billion in incentives to entice loan servicers to modify problem loans, but so far has little to show for it. Treasury Department statistics show more than 650,000 loan revisions had started through the program as of last month, but almost none of the trial modifications through October have been converted to permanent repayment plans.
