Curator Melissa Wolfe talks about the inspiration we can all take away from the Columbus Museum of Arts newest exhibition showcasing the work of home town hero George Bellows. George Bellows and the American Experience through January 4, 2014. This exhibition follows on the heels of a major retrospective of the artist organized by the [...]
Pace of Mortgage Loan Modifications Under Obama Plan Painstakingly Slow
Listen to the Story
The number of U.S. households on the verge of losing their homes rose 7 percent from June to July in part because the foreclosure crisis continues to outpace government efforts to limit the damage. There seems to be an abundance of help at every turn, but are banks modifying loans as fast as they possibly can?
Banks in the U.S. are working to resolve the overwhelming mortgage foreclosure crisis. But the scope of the problem is staggering. Faith Schwartz works for Hope Now, an agency that helps people avoid foreclosure. Schwartz says millions of Americans are in trouble with their mortgages.
“Just to give you a sense of the numbers, 3.1 million loans are past due over 60 days,” Schwartz says. “That’s a lot of loans.”
The Obama administration has weighed in with its own plan for assistance. While it might not have the alliteration of Cash for Clunkers, the administration’s Making Home Affordable plan is designed to help homeowners in arrears. But Cindy Flaherty of the Ohio Housing Finance Agency says the pace of loan modifications is painstakingly slow.
“Right now I would say that it is much slower than anybody had hoped,” Flaherty says. “We are still working with borrowers who called us when the program first started and they have yet to get a modification back from the servicer or lender that they’re working with. In other cases we are starting to see some results and it does depend on a number of factors.”
Flaherty says it might be as simple as a bank lacking enough employees to slog through piles of paperwork. But she wonders aloud if banks are purposefully slowing down the process.
“I would like to give the servicers the benefit of the doubt and say that they are trying,” Flaherty says. “And I don’t think that’s true across the board though we have too many examples of counselors being treated rudely; of packages being repeatedly mislaid; ‘will you fax it again.’ You have to wonder if there isn’t another motive in those cases to slow down the process.”
Ohio Bankers League lobbyist Mike Adelman says that he believes banks are doing the best that they can.
“To the best of my knowledge banks and thrifts are working hard every day with customers to keep them in their homes, certainly if you have a willing and able borrower the lender will want to try and work out a deal so that the property’s being maintained, so the taxes are being paid,” Adelman says. “It’s a win-win situation for everybody involved.”
The U.S. Treasury Department said earlier this month that more than 400,000 modification offers have been extended and that more than 230,000 trial modifications have already begun. At that pace, according to Treasury, it will take the next three years to help three million to four million clients.
J.P. Morgan Chase, with large-scale operations in Columbus, is among the largest loan servicers in the country. The company says since 2007, it’s helped prevent some 600,000 foreclosures. Chase says it’s already modified 117,000 loans under the Obama plan.
At the Ohio Housing Finance Agency Cindy Flaherty says the key for borrowers is perseverance. She says that as more banks add staff and as updated loan rules are written into banking guidelines, more work outs and loan modifications will occur.