|Several organizations agree that loan modifications have failed so far — though barometers vary. Bank regulators plan to use new data to analyze the level of success. Meanwhile, an online merger is expected to increase the supply of modification leads and a number of firms are courting delinquent borrowers with help.National banks and thrifts will be required to report more details about the affordability and sustainability of loan modifications they process, according to a joint statement Friday from the Office of the Comptroller of the Currency and the Office of Thrift Supervision. The regulators are trying to determine how loan modifications impacted total principal and interest paid on modified loans last year.
The new data — including how many loans modified during the first-half 2008 have become at least 60 days delinquent within six months — will be reported in the joint Mortgage Metrics Report expected to be released next month. That report will reflect around 2.4 billion pieces of information and include about 30 more data elements than the June 2008 report.
The data enhancement follows criticism of findings reported by Comptroller of the Currency John C. Dugan in December that indicated 53 percent of loans had re-defaulted within six months of being modified. That report reflected 30-day defaults — though critics claim the 60-day delinquency rate is a better yardstick.
A press release yesterday indicated that GlobalDataUSA and LeadMailbox have integrated their Web sites. Among the benefits of the integration are an increase in available loan modification leads.
San Diego-based Peoples First Financial has been accused of charging $1,295 to help a Massachusetts couple modify their mortgage even though the modification was never completed and the house was ultimately foreclosed on, according to an announcement last week from MFI-Mod Squad. California prohibits upfront loan modification fees from defaulted borrowers.
“Peoples First Financial is in direct violation of California Department of Real Estate guidelines, which require all modification companies that charge an advance fee to be approved and have their fee agreements approved,” MFI stated. “Peoples First Financial is currently under a Desist and Refrain order by DRE.”
Modification.org, which claims to have “one of the highest success rates in the nation,” is offering its loan modification services at a 25 percent discount to government employees, a press release today said. Last week, the discount was offered to students, teachers and education professionals.
Think Debt Relief issued a statement Friday indicating mortgage servicers are throwing up so many roadblocks to loan modifications that foreclosures are not being prevented in many cases. The Phoenix-based firm quoted U.S. Rep. Maxine Waters, a California Democrat who reportedly said the average borrower will not be able to get a modification done. Think Debt claims borrowers trying to contact their servicers are “repeatedly being placed on hold, disconnected, transferred from department to department, and shuffled between their lender and their servicer without ever making any progress on getting their mortgage renegotiated.”
MortgageLoan.com announced last week an information guide for borrowers seeking loan modifications. In addition to explanations, the guide links directly to government and lender Web pages that discuss various modification programs.
Cambridge attorney Terrence Parker issued a statement indicating he joined the National Association of Consumer Bankruptcy Attorneys last month in Washington, D.C., to lobby for bankruptcy cramdowns.
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