Mortgage Companies to Meet With White House

July 27, 2009— -- Mortgage servicers accused of not doing nearly enough to stem the nation's foreclosure crisis will sit down with the Obama administration tomorrow to tell their side of the story.

The meeting, the results of which are not expected to be made public until early next month, comes amid escalating criticism that both mortgage servicers and the government are ill-equipped to carry out Obama administration programs designed to help keep people in their homes.

Homeowners such as Pedro and Lucy Gomez are among the many disappointed with loan modification efforts.

The couple are fighting foreclosure on their Elgin, Ill., home. Pedro Gomez, 43, said they fell behind on mortgage payments after his wife was laid off last year. They sought help from their mortgage servicer, he said, but the company only offered a loan modification plan that didn't actually reduce the monthly mortgage payment.

"We continue to call them and try to work with them and they refused," he said. "They kept on giving us the brushoff."

The National Consumer Law Center, which presented testimony to the Senate earlier this month, has identified dozens of ways in which some mortgage servicers have failed to follow guidelines set by the Home Affordable Modification Program (HAMP), a five-month-old Obama administration program that pays servicers at least $1,000 for each loan modification. The Government Accountability Office, meanwhile, issued a report last week concluding that there are "gaps" in the Treasury Department's oversight of the program.

Sen. Chris Dodd, D-Conn., has asked the administration to investigate alleged abuses of the program. The alleged violations by mortgage servicers include:

"If true and widespread, abuses of this kind threaten to undermine the effectiveness of the HAMP program and deny the relief on which so many Americans are depending for their financial stability," Dodd, the chairman of the Senate Banking Committee, wrote in a July 23 letter to Treasury Secretary Tim Geithner and Housing Secretary Shaun Donovan.