According to the U.S. Treasury Department only 4 percent of home owners who signed up for loan modifications — fewer than 31,000– had received them by the end of November,
Of the largest lenders, Bank of America Corp. had the worst results. It completed a total of 98 modifications. With 7,100, GMAC Mortgage completed the most.
Lenders have blamed their lack of success in part on the failure of borrowers to complete the paperwork necessary for the process.
So lenders are blaming home owners? Well, I don’t think so. I think the banks don’t really care about doing loan modifications. They are very efficient at nickel and diming you with fees for everything, from taking money out of an ATM machine to walking into the bank and talking to a teller. Loan modifiications are at the bottom of their list of things to do.
A great story appeared recently in the New York times that illustrates just how bad, one bank, Wells Fargo has been handling loan modifications.
Here’s a small portion of the article:
“PHOENIX — Bobbi Giguere had no luck in securing a loan modification from her mortgage servicer. For months, she had sent the bank the financial documents it requested to process her modification. But each time she called to check on the request, she was told to send her paperwork again.
In court, Mrs. Giguere questioned Joe Ohayon, right foreground, of Wells Fargo. He confirmed she had not been asked for a crucial worksheet.
“I submitted the paperwork three times, and nothing happened,” said Mrs. Giguere, 41, who has a high school education and worked as restaurant manager before losing her job.
On Thursday, something happened. She questioned a Wells Fargo official about the bank’s lack of response — under oath.
The spectacle of a high-ranking banking executive being grilled by an ordinary homeowner was the result of an unusual decision by Judge Randolph J. Haines of the United States Bankruptcy Court to summon a senior executive from Wells Fargo to appear in Mrs. Giguere’s bankruptcy case.
At the hearing, Judge Haines made it clear that he was acting out of concerns about Wells Fargo’s mortgage modification practices generally.
“This is certainly not an isolated case,” he said. “The kind of story I hear from this debtor is one that I and other bankruptcy judges around the country are hearing over and over and over again.”
Under preliminary questioning by one of the bank’s lawyers, Mr. Ohayon stated that Mrs. Giguere had repeatedly failed to provide a financial worksheet, a critical document in processing a loan modification.
Under cross-examination by Mrs. Giguere (who had a little assistance from Judge Haines), the bank’s defense withered. From her files, Mrs. Giguere produced a letter from Wells Fargo describing the paperwork that she needed to file for a loan modification. In the witness chair, Mr. Ohayon read the letter.
“Mrs. Giguere is right,” Mr. Ohayon concluded. “The letter did not ask for a financial worksheet.”
Wells Fargo has been criticized for its slow pace in modifying mortgages the U.S. Treasury Department’s foreclosure prevention initiative, which was begun in April. The bank has started trial modifications on about 20,000 home loans under the program, or 6 percent of those who meet the program’s guidelines. JPMorgan Chase, by comparison, has begun modifications on nearly 20 percent of such loans. The banks’ information was issued in a recent report from the Treasury on the progress of the program.”
Read the entire article at New York Times
By the way, I’m still keeping track of one of Wells Fargo’s loan modifications for a client of mine. It’s been going on since June of this year. It’s the same old thing, no one in Wells Fargo talks to each other in doing the loan modification. I’ll let you know if they make the modification.
John O’Dell
Real Estate Broker