Private Loan Mods Performing Far Better Than Government Loan Mods

March 17^th, 2010

HOPE NOW, a private sector coalition of mortgage servicers, investors, insurers and nonprofit counselors wrapped up 99,499 proprietary loan modifications in January, twice the amount of 50,364 permanent modifications completed under the Home Affordable Modification Program (HAMP).

Out of all the proprietary loan modifications in the month of January, 74% included a cut in principal and interest payments. HOPE NOW is proud to announce that their proprietary non-HAMP solutions exceeded the number of HAMP modifications by twice the amount. This is sure evidence that the industry continues to explore answers for families and strive to help families remain in their homes.

In 2009, HOPE NOW and its coalition of partners re-evaluated survey data metrics as the problems facing the foreclosure crisis in the United States evolved. The overall result was an expansion and reworking of the data reporting with non-HAMP modifications coupled with other non-HAMP industry solutions.

While HOPE NOW is experiencing success with non-HAMP modifications, it is also ahead in gathering documents in efforts to convert trial HAMP modifications to permanent stages.

Just recently, fifteen HOPE NOW servicers assisted more than 2,700 homeowners all over Arizona in a series of four homeownership events held in the middle of March 2010. The final day for the workshops was an event focusing on document gathering particularly for HAMP modifications.

HOPE NOW boasts of a new web portal known as HOPE Loan Port to efficiently expedite HAMP applications. Housing counselor partners in 25 states and more than 100 cities are now utilizing HOPE Loan Port. The system allows HUD-approved counselors to submit HAMP applications directly to a homeowner’s servicer. Counselors are able to efficiently track the status of the applications and in turn provide applicants with quick timely decisions.

Only 6 servicers including Chase Bank are participating in Loan Port. 3 other banks that have a large number of delinquent borrowers, Bank of America, Wells Fargo Bank and Citi Mortgage have reportedly turned down invitations to join. Bank of America and Wells Fargo claimed that they were exploring ways in enhancing their own efforts in the loan modification process. A spokesperson for Citi Mortgage said they were considering in joining.

The government demanded for new transparency for the loan modification process after many complaints from applicants who got thrown around with missing documents including repeated requests for documents that have already been submitted. Loan Port ensures that once the servicer accesses the application, it is marked or labeled received through the system. Counselors will then be able to track its progress. Servicers are also required to update the file every 10 days.

The creative side of the system also provides adequate information for those who got rejected to qualify for a variety of other solutions. Loan Port is ambitious in opening this option to the public should the system fair well in the long run therefore allowing applicants to apply for a mortgage modification directly online, without the help of counselors. However, the stumbling block for this to happen is the document scanning process.

Counselors at Neighborhood Housing Services of Chicago have started utilizing HOPE Loan Port as of January 2010. The use of the system does not enhance the success rate of loan mod qualification but it helps inform applicants whether they have qualified for a HAMP modification sooner than later.

According to a report on the Chicago Tribune, the initial 33 applications fed through HOPE Loan Port received a decision in 2 to 4 weeks. This is a giant leap if compared to May’s 2009 average of 180 days and January’s average of 153 days from a manually processed application.

In national terms, Hope Loan Port’s average turnaround time for a loan modification decision is 22 days and 17 days for those who don’t qualify. Larry Gilmore, CEO of Loan Port suggested that with more applications fed into the system in months to come, they cannot guarantee that the turnaround time can be sustained similar to the figures above. He said it is still a far improvement.

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News Archive

New Government Short-Sale Program, HAFA To Launch April 5th - February 24th 2010

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U.S Government Wants 500,000 Trial Modifications By Nov 1st - July 28th 2009

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Obama Extends Mortgage Refinancing Program, Raising New Limit To 125% - July 1st 2009

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Bank Of America has modified 50,000 loans in Countrywide settlement - May 26th 2009

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New Government Short-Sale Program, HAFA To Launch April 5th
Due to the poor success rate of the government loan modification plan otherwise known as HAMP which was launched in February 2009, the U.S. government has unveiled a new program called HAFA (Home Affordable Foreclosure Alternatives) in association with Short-Sales and Deed in Lieu of Foreclosure. - GET PROGRAM DETAILS & PODCAST

Citi Allowing Struggling Homeowners To Remain In Homes For Additional 6 Months
Citi launches a new program termed Foreclosure Alternatives Program which allows homeowners to remain in their homes for an additional 6 months provided if they return the deed of their property at the end of the period. - GET PROGRAM DETAILS & PODCAST

How To Avoid A Deficiency Judgment After A Short Sale?
As horrible it is to lose your home to foreclosure, ex-homeowners may still be on the bait for the deficiency amount. This is simply the difference of what is owed on the mortgage and what the bank could sell at an auction. Deficiency judgments can haunt borrowers, years after they have lost their home. - LEARN HOW & PODCAST