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The Obama administration is calling on mortgage servicers to devote more resources to its Home Affordable Modification Program.
While the number of trial modification offers under the federal modification plan has seen a significant “ramp-up” since the detailed guidance was published, the conversion rate into actual trial modifications has been inconsistent among servicers, according to a joint letter from U.S. Treasury Secretary Timothy F. Geithner and U.S. Department of Housing and Urban Development Secretary Shaun Donovan. The letter was reportedly sent to the chief executive officers of 25 mortgage servicers.In addition to the low conversion rate, performance and the borrower experience is deficient at some of the servicers. Geithner and Donovan said far more progress is needed. “We believe there is a general need for servicers to devote substantially more resources to this program for it to fully succeed,” the letter stated. The secretaries called on each of the CEOs to designate a senior liaison who is authorized to make decisions on behalf of the Home Affordable Modification Program. Each of the liaisons will participate in a July 28 meeting with senior Treasury and HUD officials. The meeting will include discussions about full implementation of the program, and the liaisons will be required to submit their written implementation plans by July 23. The letter indicated that results of the modification program will start being publicly reported for each servicer by Aug. 4. The reports will include the number of trial modifications extended, the number of plans underway and — eventually — the long-term success of the modifications. The government also plans to improve the metrics by which the program’s success is measured. Among the planned new metrics are the wait time for inbound borrower calls, the accuracy and completeness of information given to borrowers and response time for completed applications. In addition, the administration plans to use Freddie Mac as a compliance agent to review a sample of declined modification requests. The government-run and government-sponsored enterprise will address specific cases and systemic weaknesses with individual servicers. “We are asking that all servicers expand servicing capacity and improve the execution quality of loan modifications,” the administration officials said. “This will require adding more staff than previously planned, expanding call centers beyond their current size, providing an escalation path for borrowers dissatisfied with the service they have received, bolstering training of representatives, developing extra on-line tools and sending additional mailings to borrowers who may be eligible for the program.” |
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