Only 31,000 Americans Entered Into Mortgage Modifications for Obama’s Housing Help Program
EmailABC's Matthew Jaffe reports from Washington:
Only 31,382 homeowners have entered into permanent mortgage modifications as part of the Obama administration’s housing help program, the Treasury Department announced today.
Nearly 760,000 borrowers have signed up for the administration’s program, with 697,000 currently involved in trial modifications and now saving an average of $550 a month. However the key issue plaguing the embattled program is getting these trial modifications made permanent.
Today’s report, which reflects servicer performance through the end of November, was the first time the Department has included the number of modifications that have transitioned from the trial phase into permanent modifications. According to today’s report, Bank of America had only completed 98 permanent modifications and CitiMortgage only 271. Other servicers had fared better, with GMAC completing 7,111 and JP Morgan Chase 4,302.
On November 30 the administration announced a new campaign to maximize the number of trial modifications that are converted into permanent ones, warning mortgage companies that failure to meet performance obligations under the program could result in fines and sanctions.
Despite today’s disappointing numbers on permanent modification conversions, Treasury said in a statement that the $75 billion program “is on track to meet its goals over the next several years.” The administration has set a goal of helping 3 to 4 million homeowners over the course of the next few years.
Earlier this week, though, the Congressional Oversight Panel released a report warning that “as currently structured [the program] appears capable of preventing only a fraction of foreclosures”, noting that as of the end of October Treasury had only spent $2.3 million in TARP funding for the program.
At the Panel’s hearing this morning featuring Treasury Secretary Tim Geithner, the panel’s chair Elizabeth Warren grilled the Treasury chief about the program.
“Are we creating a program in which we're talking about potentially spending $75 billion to try to modify people into mortgages that will reduce the number of foreclosures in the short term, but just kick the can on down the road so that we'll be looking at an economy with elevated mortgage foreclosures not just for a year or two, but for many years?” she asked.
“The whole foreclosure rate across the country now is really driven by what's happened to unemployment and what's happened to income of Americans,” replied Geithner. “And I think our judgment is the best things we can do now to help mitigate that risk is to help get the economy growing again, bringing unemployment down as quickly as we can, put people back to work, and to continue to make sure we're providing overall stability to the housing market.”
At a House Financial Services Committee hearing on the issue on Tuesday, Rep. Maxine Waters, D-CA, told Treasury’s TARP chief Herb Allison, “Treasury, you’re just too slow. You talk about all the things you’re going to do, how you’re going to improve. We’ve been listening too long.”
Allison acknowledged that the Department was “not satisfied yet with how this program is unfolding,” noting that, “We still have a lot of work to do.”
Today's full report can be found HERE.
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Amazing, Bank of America had completed ONLY 98 loan modifications. This means that they rather pay the sanctions than help the homeowners in trouble. This also means that they feel that foreclosing the homes somehow is more convenient to them. Is it because the government is willing to buy the bad assets from them? interesting to know the reasoning behind Bank of America’s reluctance to help even with incentives from the government.
Posted by: J R | December 10, 2009, 5:37 pm 5:37 pm
Amazing, Bank of America had completed ONLY 98 loan modifications. This means that they rather pay the sanctions than help the homeowners in trouble. This also means that they feel that foreclosing the homes somehow is more convenient to them. Is it because the government is willing to buy the bad assets from them? interesting to know the reasoning behind Bank of America’s reluctance to help even with incentives from the government.
Posted by: J R | December 10, 2009, 5:37 pm 5:37 pm
I’m going with this isn’t one of Obama’s better things here.
Posted by: secondlook | December 10, 2009, 6:35 pm 6:35 pm
CitiMortgage completed only 271 permanent modifications! Got $300 billion bailout money from government. No help for Main Street
Posted by: fw | December 10, 2009, 6:40 pm 6:40 pm
I applied for help with B of A and they said i should recieve paperwork in the mail in approx. 45 days. So…I’m still waiting, but I don’t have high hopes that they will help me modify my loan.
Posted by: travelertraveler | December 10, 2009, 7:16 pm 7:16 pm
Again look at who’s being rewarded, banks for their dumb leading practices and stupid people who didn’t read the fine print or understand what they were signing.
Posted by: shinner | December 10, 2009, 7:16 pm 7:16 pm
Washington’s allowing the banks to take the TARP funds and then use them for acquiring other banks, billions in bonuses to their top execs, etc. is the real shame here. My cousin’s wife resigned from PNC in a rage over how they were ignoring mortgagees who just needed a little help while using their TARP money to acquire another bank. And it’s not like Congress and the White House don’t see all of this. For shame on both parties.
Posted by: The_Mick | December 10, 2009, 8:27 pm 8:27 pm
I would give anything to get out from under B of A. Hate them with a passion, for the last few months they have been trying to put my taxes and homeowners insurance in escrow even though I sent them paperwork twice proving that they were paid. After having clients owe me thousands of dollars and not paying and cashing in all of the stocks and retirement money I had I got behind a couple of times in mortgage and credit cards and went from excellent credit to bad credit and missed out being able to modify my mortgage with a conventional loan but when I tried to get help from B of A, forget it, you need good credit to get a loan modification, catch 22, if I still had excellent credit I wouldn’t need a loan modification program.
Posted by: Ferrari5858 | December 10, 2009, 9:08 pm 9:08 pm
They ned to pay attention to the ones that are still on the books, trying to work things out from the houseing buble and the way banks were throwing the money at people with the tricks and all. Give the courts back the power. the heck with the fine print here. Two pieces of paper take the place of the book they come up with when you buy a home. Then maybe people will see and have time to read what the thiefs are trying to do. $10 to the ballance, $1400 to the intrest. Got to keep them bonus’s rolling in , right?
Posted by: harley93 | December 10, 2009, 9:59 pm 9:59 pm
Never doubt that a small group of thoughtful, committed citizens can change the world.
Indeed, it is the only thing that ever has.
==Margaret Mead==
(1901 – 1978)
Posted by: SENEKA ROSS | December 11, 2009, 1:51 am 1:51 am
These programs have been nothing but a sham and a mockery, and have done little to help people.
They have primarily helped big business, and not people, as the funds have been misused.
Posted by: Rick McDaniel | December 11, 2009, 10:21 am 10:21 am
This is a wonderful program–it is saving us $1500/month during the trial/waiting period! Amazing!
Posted by: J. Davis | December 11, 2009, 12:33 pm 12:33 pm
The TARP bailout could have been a real winner if all mortgages were immediately decreased across the board a set percentage, to the tune of $700 billion dollars. This would have directly helped every homeowner and also would have been the best way to spur economy and help mainstreet.
Posted by: Overseer | December 11, 2009, 1:40 pm 1:40 pm
I guess I’m one of the 98, as my modification has been approved, and my credit is not exactly stellar right now. I would have to believe there is a lot of work being done by BOA to facilitate this, based upon the time it takes on hold to speak with someone. I was told the lead time for paperwork to be processed has increased from a normal 45 days to up to six months. So, I would take the numbers being reported approved with a grain of salt, as all indications point the sheer volume of mortgages being reprocessed is staggering. Give it until June 2010 and then let’s see where we’re at.
Posted by: CC | December 11, 2009, 4:51 pm 4:51 pm
if he really cared about ALL americans, he would offer some sort of tax cut to ALL of us, not just people who bought houses they couldnt afford in the first place.
Posted by: realman1963 | December 11, 2009, 6:19 pm 6:19 pm
I began applying for a modification with BOA 3/3/09. 4 months ago, I received a “trial period”, or “forebearance”, where my payment would be reduced for 6 months. At the end of all this, so I was told, there would be an evaluation of my situation to discern whether or not a modification would be approved.
On Nov 30, the “trial payment” was made for Dec 1. A few days later, I went to my mail box to find an express mail, from BOA–a modification offer. The offer was time sensitive and demanded up front funds and a notarized signature by Dec 14 (Monday). I spoke to five different representatives today until I found one who was intelligent and helpful. It was discovered that the time frame was in error.
The rep disclosed that there were a “whole slew” of these modifications due to be returned Dec 14. Given the small number of them that have been completed, I believe it is safe to say they are being pushed through the process in a panic, as the feds put pressure on the banks. Unfortunately, there is a great deal of sloppiness involved when documents are drawn up in haste. I won’t believe it until it is official. Another note: late charges continued throughout the “trial period”, as if I was late with each payment. A good way for BOA to make a few extra bucks at over $70 month.
Posted by: laurie | December 11, 2009, 8:37 pm 8:37 pm
We applied for a loan modification with Chase in April 2009. In September 2009 Chase mailed us a letter stating that “the asset information submitted makes us ineligible for program requirements”. We have a few thousand dollars in a college fund for our son. Are we supposed to drain all of our resources and go into bankruptcy or foreclosure before we qualify? I thought the purpose of this program was to help people who’ve had a loss of income. We lost half our income when I lost my job in September 2008. Still, we made all of our payments on time and are current on our loan at this time. We weren’t asking for a handout, just a modification to a lower rate and/or longer term loan so we could lower our payments. So I get very frustrated seeing the news and hearing that only 31,000 Americans are taking advantage of the loan modification program. How many Americans like my husband and I have applied and been denied? I’d bet it’s a lot more than 31,000. That’s the story I’d like to see on the news. I think it would be a real eye opener for everyone.
Posted by: DShingle | December 12, 2009, 4:48 pm 4:48 pm
President Obama made an incorrect assumption when setting up this program. He assumed banks would be willing to help and take a loss. This was a naive assumption. Given the months I have been fighting to keep my home, I finally gave up. It became obvious that my servicers wanted me to go into foreclosure because they could then collect the mortgage insurance and sell the house at a decreased rate. All in all, they would be ahead by using that plan than they would be by helping me. They rejected my proposal to do a short sale because I had $100. too much at the end of my monthly budget. They then declined by request for a deed in lieu of foreclosure. I walked away. It is going into foreclosure.
Posted by: Pat | December 13, 2009, 11:22 am 11:22 am
I have my mortgage with Citi and so far I sent 4 pkts within the last year. Every time is the same answer… ”you don’t qualify”, “try to do a short sale”. I did not qualify for the “Obama” plan because my gross income was couple of hundreds over, for what my answer was…I used my net income to pay my mortgage not the gross income. They don’t care what happen with the houses. The banks prefer to take the houses away from the homeowners and sell it for a lot less to another person.
Posted by: Ada | December 15, 2009, 11:08 am 11:08 am
I’m one of the 271 from CitiMortgage and it took me 10 months to finalize the process (of course I began before Obama was placed in office)but once the amount was set, they changed it when I got the paperwork and it’s more than the 31% intended by the Obama plan and now they’ve managed to also up the amount some more because now I’m behind on my escrow account! This stinks and I’m now paying $1285 rather than $1073 which may cause me to lose the house anyway (so then I’ll become another of the statistics that DIDN’T make it).
Posted by: Pam | December 15, 2009, 11:45 am 11:45 am
The real rate of inflation has averaged 5% and is currently zooming back up through 5%.
Assuming that we stay at a 5% average, in 14 years a home owner will be making dollar denominated mortgage payments at the rate of 50 cents on today’s dollars. In other words, a $200,000 mortgage at 5% interest actually costs nothing in terms of today’s dollars, except for the principal –especially if your income can at least stay even with inflation. At 14 years housing values will have doubled (from whatever they’re now actually worth –and surely to more than your current mortgage). My expectation, however, is that we’ll soon sustain a real inflation rate closer to 10%, so hang in there, home owners!
Posted by: _Craig_ | January 4, 2010, 9:44 pm 9:44 pm
I have been trying to get a modification for 13 months with Bank of America.i hired fidelity corp. to help, and i keep getting told its the bank they are taken there time.i am a singal parent with 2 children.They dont care how many people that will end up on the streets.
GOD HELP USE ALL
Posted by: n jean | April 16, 2010, 12:04 am 12:04 am