![]() Customer Communications for Customer Management.Customer Communications for Collections.Consortium Scores for Account Management.“I guess it’s good that it didn’t matter where I worked,” she said. They tried to talk with their loan servicer, American Servicing Co., which is part of Wells Fargo, about a modification but were rebuffed, said Neagle, who works for Wells Fargo as a collateral specialist in Irvine. He earned his bachelor’s degree in 1999, but the Neagles ended up with about $600,000 in debt and, as the housing market started to crash, a home that was worth only a little over $400,000. Neagle and her husband were close to paying off their home loan in the early 1990s when they decided to refinance and take out some equity to help pay for their son to study aerospace engineering at Cal Poly Pomona. The demand for modifications has become so pressing that Bank of America, which services more home loans than any other company, said last week that it had 6,400 employees working on mortgage restructurings. You do that and you are destined for real misery down the road.” “And people end up making really bad decisions, like borrowing against their 401(k) to make their house payments. “There is so much confusion out there,” Isaac said. He said that when he meets with struggling borrowers, he finds that getting the bank’s attention has been one of their biggest problems. Isaac has been holding seminars encouraging people to hire attorneys like himself to help them through the loan modification process. “If they can work something out with a borrower, they are going to try to work it out because they don’t want to recognize these losses,” said Steve Hable, a loan modification administrator who works for San Diego attorney and AM radio show host Jeff Isaac. But foreclosures won’t necessarily follow the same trend, experts say, because banks don’t want to overtax a housing market already flooded with cut-rate properties repossessed by lenders. With the unemployment rate - now 8.5% nationally and 11.2% in California - expected to continue rising, economists believe more people will be struggling to make their mortgage payments, leading to a continued uptick in defaults. “California loans are so far underwater that people won’t fit into that narrow window,” said David Leibowitz, a bankruptcy and foreclosure attorney at Lakelaw in Chicago. To qualify for one of Obama’s programs, a mortgage’s balance must be no more than 105% of the value of the home. And the centerpiece of Obama’s plan, the Homeowner Affordability and Stability Program, is aimed at people who are current on their loans.īut many troubled borrowers in California are not eligible for help under Obama’s plan because they owe much more on their loans than their homes are worth. The various federal efforts now underway do offer some incentives for banks to help homeowners in default - including a $1,000 payment to loan servicers for every successful loan modification.īut the incentives are even better for loans that are current - $1,500 in those cases. Fannie and Freddie announced at the beginning of April that they would begin foreclosing on homes again. all followed suit, saying they wanted to give President Obama time to work out the details of his housing plan. Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp., Morgan Stanley and Wells Fargo & Co. Late last year, the country’s two biggest buyers of home loans - Fannie Mae and Freddie Mac - stopped foreclosures on many of the loans under their control. Defaults jumped 10% over the same period, to 306,785. Nationally, foreclosure numbers also have fallen.ĭata firm RealtyTrac of Irvine said Wednesday that the number of homes taken over by banks dropped to 190,543 in the first three months of the year, a 13% decrease from the last three months of 2008. ![]() “There’s also a chunk of it that could be the lender pushing the borrowers into default to get the modification rolling or the borrowers doing it themselves to qualify.” “Some of these outlets weren’t staffed enough to process all these loans, and so they had this huge backlog that we’re starting to see work its way through,” said Andrew LePage, a DataQuick analyst. That also led to procedural delays for banks and other lenders, which in many cases were not prepared to handle the additional paperwork. Much of the drop stems from a change in state law that made it more cumbersome for lenders to foreclose, DataQuick analysts said. ![]() Foreclosures peaked in the third quarter of 2008 at 79,511. Meanwhile, the number of actual foreclosures, in which the home was repossessed by the lender, fell to 43,620 in the first quarter, a 6% drop from the last three months of 2008 and a 7.6% decline from the year-earlier quarter. ![]()
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