Will Mortgage Settlement Avoid Repeating Obama’s Foreclosure Failures?

Will Mortgage Settlement Avoid Repeating Obama’s Foreclosure Failures?

by Paul Kiel ProPublica, Feb. 10, 2012, 10:55 a.m.Answers to homeowners’ questions about the Independent Foreclosure Review.The administration’s website for the foreclosure prevention program. Provides an FAQ, homeowner examples, and other tools to see whether you might qualify for the program.A list of HUD-approved housing counseling agencies nationwide.Tips for homeowners from the Federal Trade Commission.These rules lay out how mortgage servicers are supposed to conduct the program.A finance and economics blog that provides news and metrics on the state of the housing market.

Yesterday, administration officials stood alongside state attorneys general to announce a $25 billion mortgage settlement. It was reminiscent of a big announcement by administration officials three Februarys ago involving an even bigger number: $50 billion. That money was supposed to go to the administration’s signature mortgage modification program, which eventually became HAMP.

Three years later, HAMP (the Home Affordable Modification Program) is widely considered a failure. That failure provides key context to yesterday’s announcement.

According to the state attorneys general and the administration, a major selling point of the new settlement is that it won’t repeat HAMP’s mistakes. This deal, they say, is different.

“If people are eligible for a loan modification, the banks won’t screw up those decisions anymore,” said Iowa Attorney General Tom Miller.

North Carolina Attorney General Roy Cooper made a rather pointed reference to HAMP: “I think strong, court-ordered enforcement with teeth distinguish this deal from those earlier efforts to help homeowners.”

As we’ve reported extensively over the past several years, homeowners seeking to avoid foreclosure by gaining a loan modification have often been frustrated by banks’ errors and delays. In the worst cases, the banks’ shoddy mortgage servicing has led to wrongful foreclosures. The errors have sometimes continued even after homeowners got an elusive modification.

When HAMP was launched, it came with the promise that mortgage servicers would have to abide by clear rules. The handbook laying out these rules now approaches 200 pages. But as we’ve detailed, enforcement of those rules has been lacking.

According to the state attorneys general, the settlement directly addresses that. The five big servicers 2014 Bank of America, JPMorgan Chase, Wells Fargo, Citigroup and Ally Financial (formerly GMAC) 2014 that will sign on to the not-quite-finalized deal have agreed to follow a raft of new rules. Some of these rules, like how quickly a bank must respond to a homeowner’s completed modification application, come straight from HAMP.

What’s different this time, they say, is that there are clear consequences for rule-breaking. But plenty of questions remain, and only time will tell if the latest promises of mortgage-servicer accountability will be kept.

“The big picture is that these new rules are only good if servicers follow them,” said Alys Cohen of the National Consumer Law Center. “Enforcement will really matter.”

As critics like Firedoglake blogger David Dayen have pointed out, the new system relies to some extent on “self-assessments” by the banks to identify violations of the new rules. But Miller, the Iowa attorney general, notes that consumers will be able to complain to their state’s attorney general, who will make sure their complaints are heard.

The settlement does create a “monitor” who will have the power to impose penalties. The administration says a bank could be fined up to $1 million per violation and up to $5 million for repeat violations. But the details released so far don’t show how violations will be applied or counted. (If thousands of homeowners, for instance, have been wrongly denied modifications, will that be counted as one violation or thousands?)

HAMP came with no penalties for participating mortgage servicers that broke the rules. It was only in the past several months that the Treasury Department decided to address servicer noncompliance 2014 by temporarily withholding the program’s subsidy payments. (As for the millions of dollars in incentives that Bank of America, JPMorgan Chase and the other servicers were paid over the previous years, they get to keep that.)

The settlement is not only supposed to have more sticks than HAMP, it’s also a chance for the administration to breathe life back into the old program. Treasury recently made major revisions to HAMP to allow more homeowners to qualify for modifications.

“The extension and expansion of HAMP are designed to be complementary to the settlement,” said Treasury spokeswoman Andrea Risotto.

For instance, the program was set to end at the end of 2012 but now will accept new homeowners until the end of 2013. (The banks will operate under the umbrella of the settlement through 2014 or so.) In addition, Treasury has broadened some of the criteria to make it easier to qualify.

Some of the millions of homeowners who were rejected might be eligible for a second shot. Hundreds of thousands of homeowners were originally granted “trial modifications” through the program in 2009 and early 2010, only to be denied permanent modifications many months (and sometimes more than a year) later. Most of those homeowners started those trials by just giving their income information over the phone. They’ll be eligible to reapply, according to the proposed rules.

One of the recent changes to HAMP could reduce the cost of the settlement for banks 2014 and leave taxpayers footing a chunk of the bill.

As part of yesterday’s deal, the five banks agreed to reduce billions in mortgage debt for homeowners in danger of foreclosure. Most of those principal reductions 2014 about 85 percent according to Housing and Urban Development Secretary Shaun Donovan 2014 will likely be for loans that the banks hold on their own books.

HAMP also has long offered investors incentives to encourage principal reductions. For loans owned by banks, the money goes right to them. In January, Treasury tripled those incentives. In cases in which a loan qualifies for HAMP, the government will now pay investors, often the banks themselves, up to roughly two-thirds the cost of a principal reduction.

The banks have agreed to perform at least $10 billion worth of principal reductions as part of the settlement. Because it’s unclear how many of the principal reduction modifications will be done through HAMP, it’s impossible to say how much of that will be covered by the government subsidies.

So far, about 40,000 HAMP modifications have been done through HAMP’s principal reduction program at a median reduction of $67,196, meaning that roughly $2.7 billion in principal has been reduced. If the banks find HAMP more attractive because of the increased incentives, that amount might increase sharply, and HAMP could experience something of a renaissance.

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4closureFraud.org

Comments
10 Responses to “Will Mortgage Settlement Avoid Repeating Obama’s Foreclosure Failures?”
  1. neidermeyer says:

    Obama hasn’t had any failures so far , his plans are progressing nicely … although you must make a distinction between the stated goals and the actual goals.

    • lvent says:

      Niedermeyer…..these sure aren’t OBAMAS evil plans. These are the evil plans of his owners….. against ALL OF US and America and they began not long after the founding..The day Congress instituted the FED RESERVE and they stopped coining our own currency is the day the American people should have executed EVERYONE OF THE TRAITORS. ..TO THIS DAY THE SAME MONEYED ELITE PLAYERS, THEIR MINIONS AND COHORTS….AKA THE TRAITORS FROM WITHIN HAVE BEEN TERRORIZING AMERICA AND THE WORLD WITH THEIR RIGGED MONETARY SYSTEM…TO DATE …NONE OF THEM….HAVE BEEN HELD ACCOUNTABLE FOR THE ATROCITIES THEY HAVE COMMITTED WITH THEIR RIGGED MONETARY SYSTEM..AKA. ,.THE MARK OF THE BEAST….THE TRUTH ABOUT THESE MANIACS AND ALL OF THEIR CRIMES AGAINST HUMANITY HAS BEEN CLEVERLY HIDDEN FROM MOST UNTIL NOW..THEY HAVE NEVER BEEN HELD ACCOUNTABLE FOR THEIR CRIMES…THEY HAVE BEEN LARGELY COVERED UP WITH COUNTLESS LIES AND DECEIT..SO THEY COULD GET AWAY WITH WHAT WE ARE ALL LIVING RIGHT NOW…….THEY ARE THE REASON FOR ALL OF THE FRAUD……BECA– USE THEY AND THEIR MONETARY SYSTEM ARE A FRAUD…..THEY MANUFACTURED IT ALL…..THE WARS, MURDER, DRUG AB– USE, POVERTY, HUNGRR, MONETARY CRISES, MAFIA, THE KKK, THE ASSASSINATIONS…9/11 …THIS MANUFACTURED CRISIS AND STRIFE ..MOST OF THE SUICIDES…THE ILLNESSES.THE MENTAL BREAKDOWNS….YOU NAME IT…IT IS ALL THEM….DIABOLICAL. MANIACAL RUTHLESS…THEY ARE THE HATERS OF THE WORLD….HIDING BEHIND THE SCENES…THEY — USE PERPS AND SPIES TO CARRY OUT ALL OF THEIR EVIL WORK…..THEY HATE EVERYONE AND EVERYTHING….THEY HAVE NO RESPECT FOR YOU, ME, HOW HARD YOU HAVE WORKED FOR EVERYTHING..AND THE TRUTH OF THE EVIL CAN BE SEEN BEING PLAYED OUT BY THEIR JUDGES, THAT THEY OWN, IN FRAUDCLOSURE COURTROOMS ACROSS AMERICA….THEY WANT TO STEAL IT ALL…UNDER THE GUISE OF ALL OF THEIR LIES, DECEIT AND FRAUD….MOST IMPORTANTLY…..THEY WANT EVERYONE TO BELIEVE THAT THEY OWN IT ALL AND THAT THEY OWN ALL OF US……….WHEN THEY HAVE NEVER LENT ANYONE ANY OF THEIR OWN MONEY…ALL THEY DO IS TRY AND MAKE THE MASSES BELIEVE ALL OF THEIR LIES…..TO HIJACK AND STEAL IT ALL…THIS MANUFACTURED FINANCIAL CRISIS, IS THEIR EVIL END GAME PLAN ….AND WE THE PEOPLE ARE ALLOWING THEM TO GET AWAY WITH….FIRST THE THEFT OF EVERYTHING THAT WE THE PEOPLE FUNDED AND PAID FOR..AND THEN THE NEXT PHASE WILL BE THEIR GOLD STANDARD BACKED DOLLAR..AND THEIR MICROCHIP…..THE PROBLEM IS THE FEDERAL RESERVE BANK…..THEIR PRIVATE BANK…….AND THE TRAITORS FROM WITHIN CONGRESS AND THE SENATE WHO HAVE ALLOWED IT….NO PRESIDENT OR POLITICIAN CAN CORRECT THIS ALONE…IT IS GOING TO BE UP TO ALL OF US…WE THE PEOPLE TO MAKE THE CHANGE….AND REJECT THE FEDS MONETARY SYSTEM….THE MICROCHIPPED…MARK OF THE BEAST…THROW OUT THE FED…HOLD ALL POLITICAL TRAITORS ACCOUNTABLE…ISSUE OUR OWN CURRECY BACKED BY OUR OWN NATURAL RESOURCE REVENUES…OUR OWN HIJACKED, STOLEN WEALTH…THAT WILL INSURE OUR NAIONAL SOVEREIGNTY AND THEREFORE OUR FREEDOM AND PROSPERITY…….this is THE TRUTH….and that is why there is a disclaimer in the right hand column…!

  2. Ken Jansen says:

    This is a really bizarre article. For starters Paul, the “settlement” doesn’t exist. And, it is yet another Obama failure.
    The proper title should be, ‘Will Bank Bailout help Obama’s relection?”

  3. readdocs says:

    You cannot reduce something you don’t own. What happens when the real creditor finally shows up?
    Leaves the borrower out to dry on a swinging tree branch.
    One more layer of lies added to that already teetering on the verge of collapse.
    By the time this thing runs its course the only thing left will be flotsam.
    It’s better to default, walk away, and when they come begging for your signature give them
    the finger.

    • Ali says:

      You are so right. And principal reductions for “Responsible” homeowners will put them in the same situation that we are in. They too will recieve a min. #. Let the games begin. I will not be signing anything for the banks. If after over three yrs of being in our home shows me is that they don’t have or are entittled to forclose without the legal right to do so. I be will filing soon. I hope people who are invited to renance with the banks will read their docs carefully before they sign anything, and become victems of this ponzi scheme. The investors already signed signed a disclaimer when when they decided to own a peice of real property that actually belongs to the people who were cheated and lied to. This ponzi scheme was probably stated by the goverment intentionally, and fannie mae and freddie were instumental in causing this global scheme, not “robo-signing”, their failed attempt to cover their asses.

    • lvent says:

      readdocs..you cant write down or modify or refy $700 trillion dollars in mortgage derivatives fraud..there is an estimated total $1.2 quadrillion in total derivatives fraud……. UNSUSTAINABLE DEBT…DEBT THAT CAN NEVER BE REPAID NO MATTER…IT IS A HIDDEN DEBT NUKE…HIDDEN IN THEIR SHADOW BANK….ALL ELECTRONIC FRAUD….THE TRUTH IS…THESE CROOKS OWE EVERYBODY ON THE PLANET AND IT IS THE CROOKS WHO CANT PAY THEIR BILLS..,..THESE BANKS /WALL STREET OWE THEIR OWNERS ……WHO WERE ALSO THE …………INVESTORS………AND THEIR CRIMINAL FRIENDS AND COHORTS………ITS HIDDEN DEBT FRAUD AND ITS FREAKING MASSIVE …….YOU SEE READDOCS….THEY ALL GAMBLED ON OUR SIGNATURES….GOT FILTHY RICH OFF OF THE FRAUD…..THEY REALLY WERE INVESTING IN NOTHING AT ALL…AND THEY GOT FAT…..AS……PIGS………FROM NOTHING……..AND THEY NEVER LENT ANYBODY ANY MONEY,………….THEY ALL PAID TO PLAY…….AND ALL OF THEIR INVESTMENTS CRAPPED OUT WHEN THE ILLUMINATI INTENTIONALLY CRASHED THE STOCK MARKET IN 2008….SEE THE YOU TUBE VIDEO…..CNBC SAYS ILLUMINATI CRASHES STOCK MARKET……THE CROOKS ROBBED ALL THE PEOPLES WEALTH BECA– USE THE CROOKS COULD NOT COLLECT ENOUGH MONEY……TO PAY THEIR FUCKING BILLS……..THE REAL CREDITOR …..IS THE U.S. TAXPAYERS……WHO PAID FOR AND FUNDED EVERYTHING …..WE MADE GOD KNOWS HOW MANY DOWN PAYMENTS…..I PUT $100 G DOWN ON MY HO– USE…..AND MADE 18 YEARS IN FRAUDULENTLY INDUCED MORTGAGE PAYMENTS FOR MONEY THEY NEVER LENT ME!!!!!…EVEN THE PENSION FUNDS AND 401 K INVESTMENTS WERE ONLY INVESTED IN THE FRAUD…..WE THE PEOPLE WERE THE ONLY ENTITY WHO HAD ANY SKIN IN THEIR LIARS GAME…..ELECTRONIC GAMBLING CASINO……!!! NONE OF THAT QUADRILLION….CAN EVER BE REPAID…IT IS ALL DERIVED OF THE ORIGINATION FRAUD…THE INVESTORS…..THE OWNERS OF THE FED …THE SO CALLED MONEYED ELITE ARE HOLDING THE WORLD HOSTAGE…..FOR DEBT THAT CAN NEVER BE REPAID…..NO MATTER HOW MUCH THEIR FEDERAL RESERVE OR THEIR BANKS STEAL FROM THE PEOPLE….OR THE THEIR MINIONS AND COHORTS…..THE ……………….POLITICIANS ALLOW THE CROOKS TO STEAL…….ALL OF THIS WAS PLANNED BY THE OWNERS OF THE FED…ON DOWN……WAS CREATED AND INSTITUTED BY THE TRAITORS IN ……CONGRESS AND THE SENATE….. BECA– USE THIS IS WHAT THEIR OWNERS WANTED……IT IS ANOTHER SNEAKY HITLER PLAN…..AND THE NAZIS ARE ALL HERE…….GLOBALIZATION IS A SHAM AND A…..,…………….. FRAUD….IT…… DOES NOTHING BUT ROB THE PEOPLE OF THEIR, WEALTH, JOBS AND. .,……….FREEDOM….ALL WEALTH STAYS IN THE HANDS OF THE WEALTHIEST CROOKKS….WHO LEND NO. …………..MONEY OF THEIR OWN……THE PLUTOCRATS AND THE OLIGARCHS ….. THEY FULLY INTEND TO BANKRUPT THE PEOPLE…….DECLARE US BROKE FOR ALL OF THE FRAUD COMMITTED BY THEIR PERPS….WHO LENT OUR MONEY…….NO MONEY OF THEIR OWN….AND THEY — USED OUR SIGANATURES TO CREATE HUNDREDS OF TRILLIONS IN WEALTH FROM SELLING INTEREST IN ANYTHING WITH A. …………,………….MONEY FLOW….,………….,BIG LIES……. ….NO SKIN IN THE GAME…….CNBC REPORTED OVER A YEAR AGO THAT WALL STREET AND THEIR OWNERS MADE 60 TRILLION FROM DERIVATIVES IN 1999……….THIS IS ALL ABOUT STEALING OUR NATIONAL SOVEREIGNTY….OUR FREEDOM….DECLARING AMERICA BROKE…….A BIG LIE…..AND INSTITUTING THEIR GOLD BACKED DOLLAR AND THE MICROCHIP…ALL BEING DONE UNDER THE GUISE OF THE FAILURE OF CAPITALISM…..BUT THAT WAS ONLY CA– USED BY FRAUD……COMMITED BY THE CRIMINAL IMPOSTERS AT THE TOP OF THE PYRAMID……THEY WANT ALL ELECTRONIC WEALTH….NO SOVEREIGN NATIONS….NO OWNERSHIP OF ANY WEALTH OR PROPERTY BY THE PEOPLE….THEY WANT A SMALL A SMALL PRIVATE GLOBAL GOVERNMENT ….A GLOBAL INDENTURED SLAVE PLANTATION…..ALL CREATED FROM FRAUD…..UNDER THE GUISE OF MONEY LENDING……WHEN NONE OF THEM LENT ANY MONEY…..THEY HAVE HIJACKED AMERICA VIA THE FEDERAL RESERVE BANK….CREATED BY TRAITORS IN CONGRESS…….AMERICA IS OUR HO– USE….THE PEOPLES HO– USE…..WE THE PEOPLE ARE WHO PAID FOR AND FUNDED EVERYTHING THESE CRIMINAL IMPOSTERS HAVE DONE….UNDER i.THE GUISE OF MONEY LENDING…THEY HAVE NO RECEIPTS..THEY NEVER LENT ANY MONEY….WE THE PEOPLE MUST REJECT ANY AND ALL FIXES FOR THEIR FRAUD…..STOP PAYING THEM……BURN THEIR FRAUDULENTLY INDUCED DEBT…….OCCUPY AND DEFEND OUR HOMES AND COUNTRY…..NEVER BACK DOWN…REJECT THEIR MICROCHIP…..THE CREDIT AND DEBIT CARD…..WE MUST ISSUE OUR OWN CURRENCY BACKED BY OUR OWN NATURAL RESOURCE REVENUES….OPEN STATE BANKS…THROW OUT THE FED…HOLD ALL POLITICAL TRAITORS IN CONGRESS. ACCOUNTABLE…..SLAUGHTER ALL HOGS….OCCUPY…..GUTS…GUNS…GOD….!! NATIONAL SOVEREIGNTY AND FREEDOM WILL PREVAIL…..GOD BLESS AMERICA!!!!!!!!

      • lvent says:

        WAKE UP AMERICA…..SMELL THE TYRANNY AND THE FASCISM….THE NAZIS ARE HERE…CLOSE AT HAND…ON OUR SOIL!!!! READ MY COMMENT ABOVE…..THE SO CALLED MONEYED ELITES EVIL PLANS FOR MANKIND……STOP WATCHING THE DUMMY BOX…STOP PAYING THESE THIEVES WHO NEVER LENT YOU ANY MONEY….REJECT THEM AND ALL OF THEIR EVIL FIXES FOR FRAUD….MASSIVE UNSUSTAINABLE DEBT….$1.2 QUADRILLION IN DERIVATIVES FRAUD….THE FEDERAL RESERVES DEBT CAN NEVER BE REPAID….! THROW OUT THE FED AND THE POLITICAL TRAITORS IN CONGRESS AND THE SENATE…..THEY WANT AMERICA TO FAIL….THEY ARE INVESTED IN OUR FAILURE….THEY INSTITUTED THIS WHOLE EVIL PLAN….WE THE PEOPLE MUST INFILTRATE AND RECLAIM CONGRESS….ISSUE OUR OWN CURRENCY…BACKED BY OUR OWN NATURAL RESOURCE REVENUES….U.S. BANK NOTES….STATE BANKS…..HOLD ALL POLITICAL TRAITORS ACCOUNTABLE!!!!! NATIONAL SOVEREIGNTY WILL PREVAIL!!!!!! REJECT THEIR OFFERINGS OF PORN…LOTTO…AND BOOZE!!!! AND OTHER DIVERSIONS THESE TRAITORS CREATE FOR US…WHILE THEY ROB AND STEAL OUR COUNTRY!!!…WAKE UP AMERICA….THE NAZIS ARE HERE…! THIS WAR AGAINST THE PEOPLE BY THESE FASCIST CRIMINAL IMPOSTERS BEGAN ON 9/11…! IN REALITY IT BEGAN THE DAY THE TRAITORS IN CONGRESS CREATED THE FEDERAL RESERVE….THEIR EVIL PLAN RAMPED UP THE DAY THEY ASSASSINATED JFK….WHO OPPOSED THEIR EVIL..MONOLITHIC PLANS FOR MANKIND…SEE THE YOU TUBE VIDEO SPEECH BY JFK ABOUT THEIR EVIL PLAN ENTITLED…..SECRET SOCIETIES….! THEY ARE HERE..AND THEY WANT TO OWN US…WITH THEIR FRAUD AND MICROCHIP!!!!…OCCUPY….INFILTRATE CONGRESS…..WE MUST DEFEND OUR HO– USE…THE PEOPLES HO– USE….THE UNITED STATES OF AMERICA…..!…..REMEMBER WHO CODIFIED THE NDAA BEFORE OBAMA EVEN SIGNED IT………!! CONgress!!!!!!! OFF WITH THEIR HEADS!!!!!!

      • lvent says:

        AMERICA…COME OUT OF THEIR ETHER!!!…OCCUPY YOUR COUNTRY….OCCUPY CONGRESS..THE CAPITALS..THE SENATE……THE STATE HO– USES….OUR HO– USES ..THE NAZIS FROM WITHIN CONGRESS AND THE SENATE ARE STEALING YOUR COUNTRY!!!!!…….TRAITORS!!!!

      • lvent says:

        The end to this monolithic and evil plan and my suggestions for the proper corrections and therefore what I firmly believe are the only solutions to the complete theft of all of our wealth, our freedom and National Sovereignty are stated in my comments above..THIS IS URGENT!

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