USA TODAY
A federal program that has cut mortgage payments for more than 500,000 homeowners since spring is falling well short of what's needed to fix the nation's foreclosure crisis, warns a congressional panel's report out Friday.
"We're concerned that not enough foreclosures will be prevented," said Elizabeth Warren, who chairs the Congressional Oversight Panel for the $700 billion financial bailout program approved last year.
The panel's report says the government's mortgage modification program has three key problems:
•The kinds of mortgages that will make up growing numbers of foreclosures exceed the program's eligibility requirements.
•With a goal of modifying only 25,000 to 30,000 loans a week, fewer than half of the predicted foreclosures would be avoided. One in eight homes are currently in foreclosure or default and 250,000 additional foreclosures are initiated monthly.
•Many modifications so far are still in a three-month trial period. As of Sept. 1, only 1,711 homeowners had received permanent modifications under the federal program. And after five years, many will see higher payments.
"The result for many homeowners could be that foreclosure is delayed, not avoided," the report says.
Warren noted that the foreclosure problem has moved beyond subprime mortgages and that rising unemployment will cause more foreclosures.
The government's program "appears to be targeted at the housing crisis as it existed six months ago rather than as it exists today," she says.
Her panel's cautionary report follows a more positive assessment Thursday by administration officials.
Under the federal program, the pace of trial modifications now exceeds the weekly pace of completed foreclosures, said Housing and Urban Development Secretary Shaun Donovan.
That means there are more families getting modifications through the federal program each month than families losing their homes to foreclosure, officials say.
"The fact we now have a pace of trial modifications that exceeds the pace of weekly foreclosures is a very important milestone," Donovan said. "We believe we've reached an important turning point."
Administration officials acknowledge that the start of a housing turnaround could still sour.
"We're still living with the risk that housing is going to be a source of weakness in the economy," says Treasury Secretary Timothy Geithner.
Modification activity by servicer
| Servicer | Participation Date | Estimated Eligible 60+ Day Delinquency1 | Trial Plan Offers Extended | Trial Plan Offers as Share of Estimated Eligible 60+ Day Delinquencies | Trial Modifications Started2 | Trial Modifications as Share of Estimated Eligible 60+ Day Delinquencie |
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| American Home Mortgage Servicing | 7/22/2009 | 114,272 | 6,817 | 6% | 440 | 0% |
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| Aurora Loan Services | 5/1/2029 | 72,912 | 37,831 | 52% | 23,889 | 33% |
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| Bank of America, NA3 | 4/17/2029 | 875,917 | 156,120 | 18% | 94,918 | 11% |
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| Bayview Loan Servicing | 7/1/2009 | 8,987 | 2,158 | 24% | 196 | 2% |
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| Carrington Mortgage Services | 4/27/2009 | 17,149 | 1,584 | 9% | 584 | 3% |
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| CCO Mortgage | 6/17/2009 | 4,648 | 879 | 19% | 3% | |
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| CitiMortgage | 4/13/2009 | 208,427 | 88,472 | 42% | 68,248 | 33% |
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| Franklin Credit Management | 9/11/2009 | 2,635 | 0 | 0% | NA8 | NA |
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| GMAC Mortgage | 4/13/2009 | 73,498 | 31,720 | 43% | 19,331 | 26% |
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| Green Tree Servicing | 4/24/2009 | 4,114 | 810 | 20% | 474 | 12% |
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| HomeEq Servicing | 8/5/2009 | 39,934 | 444 | 1% | 0 | 0% |
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| Home Loan Services | 4/20/2009 | 45,822 | 279 | 1% | 26 | 0% |
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| J.P. Morgan Chase Bank, NA4 | 4/13/2009 | 437,652 | 163,617 | 37% | 117,196 | 27% |
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| Litton Loan Servicing | 8/12/2009 | 107,341 | 13,567 | 13% | 2,229 | 2% |
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| MorEquity | 7/17/2009 | 2,244 | 11 | 0% | 0 | 0% |
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| National City Bank | 6/26/2009 | 40,582 | 9,267 | 23% | 3,845 | 9% |
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| Nationstar Mortgage | 5/28/2009 | 29,846 | 16,974 | 57% | 8,413 | 28% |
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| Ocwen Financial Corporation | . 4/16/09 | 68,088 | 10,650 | 16% | 5,193 | 8% |
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| OneWest Bank | 8/28/2009 | 109,222 | 23,017 | 21% | 5,217 | 5% |
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| Residential Credit Solutions | 6/12/2009 | 1,831 | 364 | 20% | 313 | 17% |
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| RG Mortgage Corporation | 6/17/2009 | 3,473 | 173 | 5% | 64 | 2% |
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| Saxon Mortgage Services | 4/13/2009 | 79,921 | 38,332 | 48% | 32,931 | 41% |
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| Select Portfolio Servicing | 4/13/2009 | 60,848 | 32,024 | 53% | 15,706 | 26% |
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| US Bank NA | 9/9/2009 | 28,356 | 6,925 | 24% | 863 | 3% |
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| Wachovia Mortgage, FSB5 | 7/1/2009 | 75,074 | 2,896 | 4% | 2,019 | 3% |
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| Wells Fargo Bank, NA | 4/13/2009 | 310,716 | 106,427 | 34% | 62,989 | 20% |
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| Wilshire Credit | 4/20/2009 | 29,153 | 6,412 | 22% | 2,929 | 10% |
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| Other SPA servicers6 | -- | 4,684 | 185 | 4% | 102 | 2% |
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| Other GSE Servicers7 | -- | 242,959 | NA | NA | 18,808 | 8% |
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| Total |
| 3,100,305 | 757,955 | 24% | 487,081 | 16% |
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Posted via email from WESTCHESTER COUNTY DISTRESSED PROPERTY INFORMATION
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