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Loan Modification Outlet offers mortgage modification relief for homeowners that are struggling with an adjustable rate mortgage or an employment issue that caused a loss of income. LMO offer loss mitigation solutions with low rate loan modifications that stop foreclosure!

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September 2009
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Home loan investors say they need further protection from more significant home price depreciation than the US government is presently providing them in return for agreeing to offer loan modification programs on their mortgage portfolios.  Mortgage investors continue to report problems on the secondary market because of re-defaults from loan modifications that still were not affordable enough for these distressed homeowners.

Obama’s mortgage relief czar rolled the Home Affordable Modification Program, which pays incentive fees to loan servicing companies that agree to renegotiate home loan terms, includes extra payments to investors that consent to mortgage loan modifications in dropping real estate markets. FHA refinancing loans have made an attempt to help struggling homeowners get a lower fixed rate, but not enough people qualify.  These loan payments, for as much as $5,000, are meant to compensate the investor for the risk that the borrower will end up re-defaulting again and the home will be forced into a foreclosure and ultimately sold in an even lower property value market.  Hedge fund company, Magnetar Capital LLC has started lobbying the government to provide much greater downside protection for holders of privately owned mortgage-securities and wholesale home loans. Article was written by Kate Berry.

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CNN reported that 360,165 delinquent homeowners received mortgage relief with a loan modification and the US Treasury wants loan servicers extend more options that prevent foreclosures.  The Treasury Department said Wednesday mortgage service companies placed 12% of eligible borrowers into trial period to receive loan modifications under President Obama’s foreclosure prevention plan.

The progress report, the second issued by the government, says that 360,165 homeowners who were at least two months behind in payments received relief through August. A month ago, just 9%, or 235,247 homeowners, were in the process of receiving a loan modification. The Obama administration has come under fire for the program’s rocky start. Officials, who met with servicers in Washington in late July, said they are on track to hit their goal of 500,000 loan modifications under way by November 1. “Our progress in implementing these programs to date has been substantial, but we recognize that much more has to be done to help homeowners,” said Michael Barr, an assistant Treasury secretary.

The $75 billion initiative was announced in February and the first institutions to join began accepting applications in April. The plan, which is projected to help up to 4 million homeowners, calls for servicers to lower the mortgage payments of eligible homeowners to no more than 31% of their pre-tax income.  Some 47 servicers are participating in the Obama program, up from 38 servicers a month ago. Financial institutions, borrowers and home loan investors all receive incentives for participating in the program. By releasing the servicers’ progress reports each month, the administration is hoping to hold institutions responsible for their performance. The updates will allow the public to see which institutions are lagging in implementing the plan.

After the August report came out, servicers acknowledged they needed to improve their performance and promised to do better in the future. Homeowners continue to complain that loan service companies are not responding to their calls for mortgage refinancing and loan modifications applications applications, losing their paperwork or not making decisions. The financial institutions said they are ramping up their staffing and computer systems to handle the crush of applications. Moving quickly is important. The number of people falling behind on their payments continues to mount, especially as unemployment rises.

A record number of foreclosure filings were posted in July, according to RealtyTrac. There were more than 360,000 properties with foreclosure filings — including default notices, scheduled auctions and bank repossessions — an increase of 7% from June and 32% from July 2008

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The California Assembly passed a new bill that claims to protect homeowners from mortgage modification scams who charge fees in advance to satisfying the homeowner with mortgage relief.  But the reality is that the Senate Bill 94 could end up having the unintended consequence of eliminating a homeowner’s ability to retain a loan modification lawyer, or a mortgage relief attorney to help them save their home from foreclosure.  So the bill completely ignores the fact the THOUSANDS of homeowners have had great results from loan modification companies that successfully lowered their mortgage payment while preventing them from losing their home to foreclosure.

The bill, which has an “urgency clause” attached to it, now must pass the State Senate, and if passed, could be signed by the Governor on October 11th, and go into effect immediately thereafter.  SB 94’s author is California State Senator Ron Calderon, the Chair of the Senate Banking Committee, which shouldn’t come as much of a surprise to anyone familiar with the bigger picture.  Sen. Calderon, while acknowledging that fee-for-service providers can provide valuable services to homeowners at risk of foreclosure, authored SB 94 to ensure that providers of these loan modification services are not compensated until the contracted services have been performed.

SB 94 prevents loan modification companies, brokers, individuals… and even lawyers… from receiving fees or any other form of compensation until after the contracted services have been rendered.  What loan modification company in their right mind would go through 120 days of work negotiating a loan modification with their client’s lender only to have the client say, sorry we don’t have the money to pay you for your services.

The loan modification bill will now go to the Democratic controlled Senate where it is expected to pass.  Loan modification executive, Glen Silver said in a recent press conference, “Too bad for genuine loan modification companies, Bush couldn’t get a third term, because he wouldn’t have signed it, but we know everyone’s buddy Obama would sign a national bill as soon as he smells political success.”  Silver continued, “The President would be able tell his buddies on capitol hill that he saved Americans from loan mod scams, but really he is just going to kill the loan mod business and lenders will get their leverage back.  I guarantee the lender lobbyists created this bill.

Watch this Video Proclaiming Salvation from their Short-Sided Loan Modification Bill

Supporters of the loan modification fraud bill say that the state is literally teeming with con artists who take advantage of homeowners desperate to save their homes from foreclosure by charging hefty fees up front and then failing to deliver anything of value in return.  They say that by making it illegal to charge up-front fees, they will be protecting consumers from being scammed.

Yes there have been some shady brokers who committed predatory lending abuses that took advantage of distressed homeowners, but thousands of borrowers benefitted from genuine mortgage relief negotiations from trust-worthy loan modification firms across California. The actual number of loan mod scams remains unclear.  Now that we’ve learned that lenders and servicers have only modified an average of 9% of qualified mortgages under the Obama plan, it’s hard to tell which companies were scamming and which were made to look like scams by the servicers and lenders who failed to live up to their agreement with the federal government.

In fact, ever since it’s come to light that mortgage servicers have been sued hundreds of times, that they continue to violate the HAMP provisions, that they foreclose when they’re not supposed to, charge up-front fees for mortgage loan modification plans, require homeowners to sign waivers, and so much more, who can be sure who the scammers really are.  Let’s consider how the President is cracking down on corruption…Bank of America, received the worst grade of any bank on Obama’s report card listing because they only modified 4% of the home loans from borrower’s who were eligible for mortgage relief since the plan began.  Didn’t the government give Bank of America 200 billion in the bank bail-out of the century?  Bank executives assert that the loss mitigation department is running into obstacles handling the incoming phone calls.

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