The report below from Bloomberg.com demonstrates how bad we need a revival of the mortgage cramdown provisions proposed a few months ago. These corporate institutions are run by greedy bastards. They are elitist. They care nothing for people. They steal and they cheat and they commit fraud at will. Their attitude is “sue us, we don’t care that we violate federal law with regularity and we really don’t care about you or your kids. Just get out of the home you’re behind in payments on. Nevermind that we really don’t have a financial stake in this anymore since we were paid in whole on your loan years ago.”
I even love the name “cramdown.” This is exactly what homeowners and consumers need to do these institutions… cram it down their throats. Use the resources on this blog and elsewhere and fight. Give ‘em hell.
Also, important note. Bloomberg.com reports that Bank of America and Wells Fargo & Co. are the worst. There are PLENTY of really bad companies out there. Some that come to mind from first hand experience helping homeowners are:
- Taylor Bean and Whitaker (which also happened to be raided by the FBI yesterday in their corporate office in Ocala, FL)
- Suncoast Schools Federal Credit Union - considering that their client base is made up of teachers, nurses, police officers and the like, you’d think they be pretty good about working with their members who have run into difficulty. Think again. Suncoast is HORRIBLE! I would never have my bank account with them. Not in a million years.
- Countrywide – yes, it’s Bank of America now but you still have to deal with Countrywide people and these guys are nothing short of a disaster.
- Fifth Third Bank - Terrible. Bastards. If you have money in an account with them, I’d pull it. Exercise your right to NOT support an institution that simply does NOT care about people.
You have foreclosure rights if you’re facing foreclosure. Exercise those rights vigorously. Contact me if you need help…
Aug. 4 (Bloomberg) — Bank of America Corp. and Wells Fargo & Co. were the worst performers among the biggest U.S. banks in modifying loans for struggling homeowners, according to a Treasury Department report.
Bank of America began 27,985 trial loan modifications, or 4 percent of its eligible loans, under the government’s Making Home Affordable program started in March, the report today shows. Wells Fargo had a 6 percent rate, trailing JPMorgan Chase & Co.’s pace of 20 percent, and Citigroup Inc.’s 15 percent.
“Some of the servicers could have ramped up better, faster, more consistently,” Michael Barr, the assistant Treasury secretary for financial institutions, told reporters in a conference call today. “We expect them to do more.”
The government is trying squeeze better results out of its main anti-foreclosure program, which has put about 235,000 borrowers on the path to loan modifications out of the 4 million targeted for help. National Economic Council Director Lawrence Summers has said the Treasury report is an effort to create transparency about which mortgage servicers are helping most.
“The biggest servicers certainly have the biggest ships to turn,” Seth Wheeler, a deputy assistant Treasury secretary for federal finance said in an interview yesterday before the report was released. “Some of the strongest performers are smaller servicers, but it’s not a uniform correlation.”
The report shows the levels of homeowner assistance for the 38 companies participating in President Barack Obama’s $75 billion loan modification program. The Obama administration said last month that it’s setting a goal of starting at least 500,000 trial modifications by Nov. 1.
‘A Little Nimbler’
Wachovia Corp., which San Francisco-based Wells Fargo acquired, had a rate of 2 percent, the data shows.
Many banks don’t yet have the capacity to process the volume of loan modifications being demanded, said David Sisko, the head of default management services for Deloitte & Touche LLP. He said modification specialists have gone from processing an average of 50 to 100 loans a month to 200 to 300.
“The smaller banks and servicers are probably a little nimbler,” Sisko said.
Pasadena, California-based Wescom Central Credit Union had a 28 percent rate for its 136 eligible loans, the best performer on the list. Morgan Stanley’s Saxon Mortgage Services had begun trials on 25 percent of 84,130 eligible loans, the second-best performance. Aurora Loan Services, a former unit of Lehman Brothers Holdings Inc., had started modifications for 21 percent of 72,838 eligible loans. GMAC Mortgage Inc. was at 20 percent.
Eligible Loans
Eligible loans are those that are at least 60 days past due, in foreclosure or bankruptcy, and originated prior to 2009. The underlying property must be owner occupied and conform to Fannie Mae and Freddie Mac loan limits, which can be as high as $729,750 in some areas. The data excludes Federal Housing Administration and Veterans Affairs loans.
The Making Home Affordable program requires banks that received federal aid from the Treasury’s Troubled Asset Relief Program, or TARP, as well as mortgage-finance companies Fannie Mae and Freddie Mac to lower the monthly payments for borrowers at “imminent risk” of default. Banks can lengthen repayment terms, lower interest rates to as low as 2 percent and forbear outstanding principal, among other methods.
“A lot of these modifications are very hard to do, it takes time and you can’t rush it,” said Paul Miller, a bank analyst for FBR Capital Markets in Arlington, Virginia.
Bank of America modified 150,000 loans through other programs in the first half “as we ramped up to make” Obama’s program operational, Dan Frahm, a spokesman for the Charlotte, North Carolina-based company, said yesterday.
Bank of America, Citigroup
“Just as you can’t judge a student’s performance for the semester by looking at their grade for one class, Making Home Affordable is one component of a comprehensive program Bank of America has in place to support homeowners,” Frahm said.
Citigroup is “pleased with our numbers and with what we have been able to accomplish in the past two months,” Mark Rodgers, a spokesman for the New York-based bank, said. “But we can, and want to, do more. We look forward to continuing to work with the government, industry participants, non-profits and others to help keep more distressed American borrowers out of foreclosure and in their homes.”
Citigroup and Bank of America each received about $45 billion from TARP, while Wells Fargo took $25 billion.
Faster Pace
Loan servicers send out bills, collect debts and keep records for mortgage lenders. A group of servicers met with Obama administration officials on July 28 and pledged to step up the pace of loan modifications to keep more homeowners from sliding into foreclosure, according to the Treasury.
JPMorgan Chase is happy with its progress so far, said Christine Holevas, a spokeswoman for the New York-based company.
“That always has to be tempered with the fact that the demand is great; we know that we have more to do,” Holevas said. “We believe we’ve made significant progress. We’ve ramped up, we’ve hired people, we’ve added office space, we’ve invested in technology.”
JPMorgan Chase said June 30 that it approved 87,100 loans for modification under the administration’s plan since April 6.
Under Pressure
Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, assailed the administration at a hearing last month for the sluggish results from anti-foreclosure programs, while industry executives spoke of “confusion and delay” from how the government sets rules for the programs.
“The government is under a lot of pressure to react and they announce these programs where the infrastructure is not in place to service the program,” Miller said.
More than 1.5 million properties received a default or auction notice or were seized by banks in the six months through June, Irvine, California-based RealtyTrac Inc. said July 16 in a statement. That’s a 15 percent increase from a year earlier.
Barr said officials are seeing some “encouraging signs” that “our mortgage markets may be beginning to reach a point of stabilization.”
“It’s obviously still early to tell the nature of the mortgage markets what direction they may be headed,” Barr said on the conference call. “These encouraging signs are helpful, but it took a long time to create the financial crisis we are in and it will take a long time to get out of it.”
To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net;
