Foreclosure Crisis Solutions Addressed at the Senate's Banking Committee Hearing

At November 16, 2010 Senate's Banking Committee hearing lawmakers asked experts for foreclosure crisis solutions. There were three experts in the law which consisted of a state attorney general, a legal services attorney, and a law professor all agreed on this about the mortgage service industry: The problems aren't just technical, and they aren't just with robosigning.(http://banking.sentate.gov/public index.cfm?FuseAction)
Diane Thompson, a legal services attorney with the National Consumer Law Center, told the panel that errors in foreclosures are "a widespread problem throughout the country." She estimated that, in the cases she's seen, about half of the defaults were caused by fees that banks themselves stacked on struggling homeowners.  A small percentage, she estimated, were cases in which homeowners were not in default at all. We've tracked the problems with banks servicing of mortgage loans, both in the foreclosure process and in the loan-modification process. Banks-confronted with employee depositions that show proper processing procedures were not followed - have said that they believe no wrongful foreclosures have occurred because regardless of the procedural errors, the underlying facts in the documents were accurate.  Some have stated in calls with investors that they hope for a quick resolution to the controversy and are refiling the questionable documents. Read more on what the Senate Committee lawmakers asked the three experts about the best possible solutions to the problems as posted in http://www.propublica.org/blog/item/at-hearing

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Loan Modifications HAMP Performance Report

Making Home Affordable Program Servicer Performance Report Through September 2010


Nearly 500,000 Permanent Modifications Granted to Homeowners

Nearly 28,000 permanent modifications reported in September.

Homeowners in active permanent modifications realize a median monthly payment reduction of 36%, or more than $500 per month.

For homeowners in permanent modifications, their median first-lien housing expense falls from 45% of their monthly income to 31%.

Homeowners who do not complete the trial modification phase of HAMP are likely to find an alternative solution such as a proprietary modification or a short sale. Fewer than 16% have gone to foreclosure.
Posted in http://www.financialstability.gov/

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