Watchdog report criticizes Obama mortgage plan By WINK News By Associated Press Story Created: Mar 24, 2010 at 6:36 AM EDT Story Updated: Mar 24, 2010 at 6:36 AM EDT A government watchdog is criticizing the Obama administration for establishing a “meaningless” goal for its flagship mortgage assistance program. The report issued late Tuesday by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, says the Obama administration is measuring the performance of the program by a questionable standard. At the program’s launch in February 2009, Obama officials said it would help 3 million to 4 million homeowners. But with only 170,000 borrowers completing the program so far, administration officials now emphasize that the plan’s goal is to merely offer help to those millions. “Defining success by how many offers are given can reasonably be perceived as essentially meaningless,” Barofsky wrote. Instead, the program’s goal “must relate to how many people are helped to avoid foreclosure.” Herbert Allison, an assistant Treasury secretary, acknowledged in a letter written in response to the report that officials’ statements about the plan’s goals “have not always been precise.” But he argued that offers of help is a meaningful measurement because some borrowers who don’t qualify for the government program will still be able to avoid foreclosure. The Obama program is designed to lower borrowers’ monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms up to 40 years. The government has set aside $75 billion in subsidies to entice mortgage companies to participate. More than 100 have signed up. To complete the program, homeowners need to complete a three month trial period and provide proof of their income, plus a letter documenting their financial hardship. But getting banks and homeowners to complete the process has been tough. Barofsky said in his report that an unnamed Treasury official estimated that 1.5 million to 2 million homeowners would complete the program by the end of 2012. That, Barofsky noted, “may only be a small fraction of the foreclosures that will occur in that period.” The report is strongly critical of the government in other areas. Barofsky noted that numerous changes to government guidelines “caused confusion and delay” and said the government did not do enough to advertise the program. In response, Allison noted that the program “is the largest, most complex mortgage modification program of its kind” and said there was little precedent for how to design such an endeavor. Previous article Infantino recalls 1 million baby slings Next article Thousands to participate in National Kick Butts Day
March 24, 2010 | Posted in
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CALL FOR ACTION: Foreclosed Over 40 Cents? Homeowner says mistake was lender’s fault By WINK News Story Created: Feb 11, 2010 at 4:33 PM EST Story Updated: Feb 11, 2010 at 6:33 PM EST LEE COUNTY, Fla- In the middle of the multi-billion dollar foreclosure crisis, there’s a southwest Florida family that could lose their house over a 40 cent mistake. According to the homeowner, that mistake was his lender’s fault. “I’m fearful to send them more money,” said the homeowner, who is also afraid of losing his job for talking about the situation publicly. “Mark” said he modified his mortgage to match his lower income after a layoff and thought everything would be alright, until his lender took an automatic payment incorrectly. “They posted it 40 cents short … three weeks later we get a letter saying you’ve missed your payment so you’re out,” said “Mark”. For three weeks, “Mark” called his lender time and time again trying to resolve the problem. “They said, ‘no problem we assure you everything will get fixed’. Just make the 40 cent payment to make it even.” But the problem did not get fixed and “Mark” had to seek the help of foreclosure attorney Carmen Dellutri. “The extraordinary thing about this case is that the bank made a mistake. They acknowledged it and yet they wouldn’t fix the problem,” said Dellutri, who said he’s never heard of someone almost losing a house over less than the cost of a soda. Dellutri said his phones are ringing off the hook with homeowners just like “Mark” who think they’ve resolved their mortgage issues. “This gentleman contacted me with a situation that I hear about 5 times a week. The banks and mortgage companies will not work with individuals and they renig on the deal,” said Dellutri. Like many homeowners, “Mark” was forced to default on his mortgage payments to get his lender to even start the modification discussion. For two years, WINK News has been uncovering stories of homeowners that say the same thing. Last March, we met Janice Bass who said she was in financial trouble but doing everything she could to keep up with her payments. The Fort Myers resident said she couldn’t get her lender to work out a modification with her until she stopped paying altogether. By July, she had stopped paying and was working out a modification but when we checked back in October she still hadn’t heard anything from her lender. The Making Homes Affordable Act was supposed to save seven to nine million homes, as of February 1, 2010 it’s saved about 850-thousand. “We had a breakthrough oppurtunity in December and January,” said Alvina McHale, the communications and marketing director for the United States Treasury Department. McHale said the Treasury knows there are a lot of problems with the act, so they are making changes. They are going town to town to get troubled borrowers face to face with their mortgage lenders, streamlining paperwork to get people from temporary to permanent lenders and creating new rules for lenders. Those new rules require lenders to acknowelege applications made through the treasury department within ten days, and make a decision within 30. “If people don’t get an answer from their lender, they call our hotline, ask for the MHA desk and we will work with the lender to get an answer,” said McHale. No everyone will qualify for a modification, especially if the homeowner is too upside down in their home of can’t even make the lower payments. But “Mark” said he feels homeowners are getting the raw end of the bargain. Not only could he and his family lose their home over a the bank’s forty cent mistake, but his lender made another big mistake on top of it. One month they took two payments out of his account automatically, stretching his already thinning budget to the last penny. When he called his lender about this problem, they told him they had to keep the payment because he’s technically in default since he stopped making payments to qualify for a modification. However, there is not much “Mark” can do. Attorney Dellutri said there is no law that lets him or anyone enforce modification provisions. In fact, he said the homeowner is better off fighting a foreclosure. “I’ve got a judge, the rules of evidence.. And I’m in a playing field where I know it’s going to be fair,” said Dellutri. Due to “Mark’s” pending litigation, Bank of America would not respond to our inquiries about the situation. The US Treasury’s Hope Hotline number is 1-888-995-HOPE Previous article Fight Over Unleashed Dog, Gun Pulled Next article IRS pulls plug on some E-filers
February 11, 2010 | Posted in
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Proposal would require mediation for homeowners facing foreclosure By Jeremiah Jacobsen Story Created: Feb 9, 2010 at 10:29 PM EST Story Updated: Feb 9, 2010 at 10:29 PM EST FORT MYERS, Fla. – Florida lawmakers are considering whether the law should protect homeowners facing foreclosure. One prominent Southwest Florida foreclosure attorney says: it’s about time! Right now, foreclosure attorneys say one of the biggest problems is lenders aren’t communicating with homeowners. The proposal in Tallahassee looks to change that by forcing both sides to work together to keep people in their homes. “If I had a dime for every person who came in here and said, ‘I wish they would just work with me,” said attorney Carmen Dellutri, who says he’s seen plenty of frustated homeowners who wonder why its such a struggle to get help from their banks. “Look, let’s get these lenders together with the homeowners, across the table, with a neutral third party and get these issues hashed out. Let’s keep these people in their homes, let’s get them paying their mortgages again,” Dellutri said. A plan in Tallahassee would require exactly that: mediation between lender and homeowner. “This bill is to level the playing field. It is a homeowner’s bill of rights and it preserves the right of access to the courts for all Floridians,” said Sen. Dave Aronberg, who proposed the idea in the Florida senate. Aronberg wants to counter a plan by the Florida Bankers Association that would allow lenders to foreclose without a hearing. “The judges aren’t the problem here, the mortgage companies are foreclosing instead of trying to work it out with people,” Dellutri said. Aronberg’s bill would guarantee the judicial system would stay involved. Dellutri says anything would be better than the nothing he believes is happening now on behalf of homeowners. “This should have happened two and half years ago. And I don’t know why it hasn’t. I really don’t,” Dellutri said. Aronberg’s proposal also calls for re-appraising the homes facing foreclosure, to take into account lower property values. There would also be protection for renters whose landlords are being foreclosed on. The plan still faces a vote in both the Florida House and Senate. Previous article Snow causing local hotels to book up Next article Snowy mess felt in SWFL
February 10, 2010 | Posted in
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