U.S. to mortgage firms: Pick up the pace

Pummeled by complaints from borrowers, loan servicers commit to more mortgage modifications. White House wants 500,000 trial mods by Nov. 1.

NEW YORK (CNNMoney.com) -- Loan servicers will "significantly" increase the pace of mortgage modifications under the Obama foreclosure prevention program, the Treasury Department said Tuesday.

The Obama administration wants to see 500,000 trial modifications in place by Nov. 1. Currently, 200,000 are underway.

Officials called executives from 25 servicers participating in the program to Washington Tuesday to discuss improving the 5-month-old plan's implementation.

Both the Obama administration and the industry are feeling mounting pressure from borrowers who say their servicers are not responding to their calls and applications, losing their paperwork or not making decisions.

"[T]oo many homeowners are at risk of foreclosure right now," Treasury Secretary Tim Geithner said in a statement Tuesday. "Today's meeting was an opportunity to identify ways to accelerate the program and bring relief faster."

Announced in February, the loan modification plan allows eligible borrowers who are in or at risk of default to lower their monthly payments to no more than 31% of their pre-tax income through a loan modification. The adjustments are made permanent after the homeowner makes three on-time payments. Homeowners, servicers and mortgage investors receive incentive payments in hopes of increasing participation.

So far, the government has committed $20 billion to the effort and has said it would provide $75 billion overall.

Thank you for checking my blog out. If you or anyone you know have any questions about what the banks are offering in way of Mortgage Solutions. Please contact me at my office (562) 685-8159

Robert Vaughan
Vice President

Are You Eligible??

Are you are among the 7 to 9 million homeowners who may be able to benefit from Making Home Affordable.

HUD SECRETARY DONOVAN ANNOUNCES EXPANDED ELIGIBILITY FOR MAKING HOME AFFORDABLE REFINANCING
Announces eligibility for borrowers up to 125% underwater in Las Vegas with Senate Majority Leader Harry Reid and Congresswoman Dina Titus
WASHINGTON - U.S. Housing and Urban Development Secretary Shaun Donovan today announced an expansion of the Obama Administration's Home Affordable Refinance Program to include participation by borrowers who are current but up to 125 percent underwater on their mortgage. Under authorization provided by the Federal Housing Finance Agency, borrowers whose mortgages are currently owned or guaranteed by Fannie Mae and Freddie Mac will now be allowed to refinance those loans according to the terms of the Home Affordable Refinance program established earlier this year.

Secretary Donovan made the announcement while touring a neighborhood in Las Vegas with Senate Majority Leader Harry Reid (D-NV) and Congresswoman Dina Titus. Las Vegas leads the nation in foreclosures and approximately 67 percent of the current mortgage holders have mortgages that are higher than the worth of their homes.

"I am here in Las Vegas because it is ground zero of the foreclosure crisis," Secretary Donovan said. "I am pleased to join Senator Reid and Congresswoman Titus to make this announcement today, which I believe will make a critical difference in our ability to help many more Americans, particularly those here in Nevada, to stay in their homes. The president's Making Home Affordable plan is already helping far more families than any previous foreclosure initiative and with today's announcement we will extend its reach still further."

"I am pleased Secretary Donovan accepted my invitation to come to Nevada and see firsthand the challenges homeowners here are facing," Senator Reid said. "His announcement that the loan-to-value requirement for the Administration's refinance program has been raised to 125 percent is good news for Nevadans fighting to stay in their homes. The neighborhood we visited today represents the hardships caused by the housing crisis and the hope that is being restored through the neighborhood stabilization program and the Home Affordable refinance program."

"I am pleased to welcome Secretary Donovan to Las Vegas and thank him for coming. This is an opportunity to show him firsthand the magnitude of the foreclosure crisis in Southern Nevada," Congresswoman Titus said. "His announcement that the Making Home Affordable program will be expanded to help those further underwater, something I have advocated for, is welcome news that will help thousands of Nevadans stay in their home. I will continue working with Senator Reid, Secretary Donovan, and the rest of the Administration to find more ways to help the hardest hit areas like Southern Nevada, as every new foreclosure prolongs the housing crisis and hampers our country's ability to move out of the current recession."

"This decision is part of our ongoing efforts to maximize the effectiveness of the Making Home Affordable program and adapt to an ever-changing housing market," said Treasury Secretary Tim Geithner. "By expanding refinance eligibility, we can bring relief to more struggling homeowners more quickly. It's a crucial step in our broader efforts to get America's housing market and economy on the path to recovery."

Currently, only those borrowers whose first mortgage does not exceed 105 percent of the current market value of the property are eligible for the Obama Administration's Home Affordable Refinance Program. For example if the property is worth $200,000, the borrower must owe $210,000 or less. Today's announcement will allow more homeowners to become eligible for the program, by increasing the eligibility to 125 percent.

Making Home Affordable, a comprehensive plan to stabilize the U.S. housing market, was first announced by the Administration on February 18. In just a few months, more than 200,000 borrowers have received offers for trial loan modifications, tens of thousands of refinances and trial modifications are under way, and informational mailings about the program have been sent to more than one million borrowers who may be eligible.

Donovan toured a neighborhood that has experienced several foreclosures in recent years, negatively impacting the property values of surrounding homes. The neighborhood has been targeted for Clark County's Neighborhood Stabilization Program, which will use funds to purchase and rehab foreclosed homes, provide downpayment and closing cost assistance to those purchasing foreclosed homes, and provide housing counseling to potential buyers.

If you have any questions please contact me. Thank you so much for the continued support.

Robert Vaughan
Vice President
562-673-1136