|Following a meeting today with the Obama administration, U.S. servicers stepped up their commitment to moving mortgage modifications more quickly. In order to ensure full servicer participation, the administration has enlisted Freddie Mac as big brother.
Senior administration officials met earlier with top executives from servicers participating in the Making Home Affordable modification program, the Treasury announced.
At the meeting were the Treasury’s Assistant Secretary for Financial Institutions Michael S. Barr and Assistant Secretary for Financial Stability Herb Allison. The U.S. Department of Housing and Urban Development sent FHA Commissioner David Stevens and HUD Senior Advisor to the Secretary William Apgar.
The meeting focused on addressing challenges to completing loan modifications and strategies for improvement. The participants discussed common goals between the administration and the industry.
In the statement, Treasury Secretary Timothy Geithner said more than 200,000 trial modifications are in process. He added that “we are on track” to reach the goal of initiating 500,000 trial modifications by Nov. 1.
HUD Secretary Shaun Donovan noted in the announcement that the goal can be reached with more transparent reporting, better communication and a strong commitment from servicers.
“Servicers in attendance committed to significantly increasing the rate at which they are performing loan modifications,” the statement said.
For its part, the administration said it will begin publicly reporting HAMP results by servicer on Aug. 4, including the number of trial modifications, the number of final modifications and the long-term success of the program. It will also develop metrics for turnaround, the accuracy of information provided to borrowers and document handling.
The administration also said it has asked Freddie Mac — which is currently under government control — to develop a second-look process that will minimize the chance of modification applications being overlooked or inadvertently denied. Freddie will audit a sample of denied modifications then address general operational weaknesses and systematic errors with each servicer.
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