"Desperately Seeking Solution's: Patching Up the Marriage Between Lender and Borrower via Loan Modification Still Needs Work.
This past week, the Obama Administration reported new efforts to spearhead a national drive to help borrowers in arrears to modify their mortgages. In fact, the new Chief of the U.S. Department of Treasury’s Homeownership Preservation Office, Phyllis Caldwell, was quoted “We are encouraged by the pace at which trial modifications are now being made to provide immediate savings to struggling homeowner’s and will lead the campaign to convert the trial modifications to permanent ones. This Treasury Announcement contains continued representations of the government’s Herculean efforts to serve the nation and ensure that all who come forward can use these trusted resources. But is it really a case of “seek and ye shall find??”
Let’s run through some of the articles which we’ve been cutting out and saving in our desk drawers
over the past year. Local Newsday articles, going as far back as February of this year, quoted housing experts, presidents of real estate associations, community leaders, and even Pres. Obama, all expressing confidence in these policies, announcing opportunities galore to save our homes from foreclosure. The U.S.Treasury “doubling its $200 billion capital commitment to Fannie Mae and Freddie Mac” directed to keep our homeowners in their homes. Fast forward, 10 months later to the Sunday NY Times article by Gretchen Morgenson. “After months of playing pretend, the Treasury Department conceded last week that the Home Affordable Modification Program, its plan to aid troubled homeowners by changing the terms of their mortgages, was a dud”.
So what happened? Where did the $75billion dollars go? Where did the $200 billion dollars go? Was it ever there, or did our neighbors, colleagues and friends, all who are desperately in need of help, just decide to forget about it? Did our citizens forget about the chaos in their families, marriages, businesses and jobs and bury their heads in the sand as their homes and communities fell into foreclosure?
Ms. Morgenson provides fascinating statistics and the dire consequences of this enormous Federal failure to secure modifications and solve the problem. It doesn’t even stop there. As Ms. Morgenson pointed out, “You (also) have to address the second liens.” Many experts agree that this expanded and troubling issue has not yet entered the national discussion.
Imagine if these positive “Plan B’s” were focused upon by our national leaders who are committed to nothing less than success. The monetary penalties and sanctions against the servicers are included as a part of the recent Treasury accountability bullet points. Those active and concerned in the modification field rarely hear from the borrowers a demand for such action. They don’t seek punishment, embarrassment or penalties against their lenders and servicers. They are desperately seeking solutions to what they perceive to be a “till death do us part” mortgage vow at their closings. Our neighbors do not want foreclosures and board-ups and forced short sales. They are seeking that “Plan B” as called for by Ms. Morgenson. The federal dollars have been committed; that’s what we are told. Unfortunately, it is not getting done and is failing despite submissions for loan modifications. Maybe it takes the Court decisions of voiding mortgages or other sanctions to “solutionize” the process for loan modifications. This ultimate “divorce” is not what I see and hear. I see and hear the concerns for settlement and modification, for counseling rather than divorce, and in essence, for these families and neighbors to return to their closing vows.
