Our Rancho Cucamonga loan modification attorneys were pleased to see that the Obama administration has learned to put at least some teeth into its Home Affordable Modification Program. The Los Angeles Times reported Dec. 1 that the administration plans to increase accountability of lenders participating in the program, through both closer scrutiny and fines for noncompliance. A meeting between federal officials and the biggest mortgage lenders is planned for the week of Dec. 7, and Treasury Department officials will travel to the lenders this week to help troubleshoot problems and work with borrowers. The goal, the Times said, is to identify mortgage servicers that have failed to convert temporary modifications to permanent ones and publicly "shame" them into doing better.
HAMP got off to a bad start when very few loan servicers allowed trial modifications during its first few months. Pressure from the federal government helped increase the number of trial modifications to 650,000 as of Oct. 30, but borrowers are now complaining about similar bureaucratic runarounds when it's time to make those workouts permanent. The Treasury Department said the number of conversions is low, but that 37% of eligible homeowners have submitted the necessary documents. In addition to calling the meetings, the government plans to require participating lenders to submit updates about each individual mortgage, as much as twice a day, and fine those who don't meet standards. Consumer advocates criticized the plan, saying that shaming companies isn't fast enough to stop foreclosures and that the government can't do more than kick non-compliant servicers out of HAMP. They said they would prefer to see Congress pass bankruptcy cramdown legislation instead.
As Westminster loan modification lawyers, we agree that bankruptcy cramdowns, which would allow bankruptcy judges to reduce principal owed on a primary-home mortgage, would provide lenders a powerful incentive to consider loan modifications instead. But cramdowns are not looking likely at the moment, and we absolutely support the Treasury Department's efforts to pressure lenders. Over the course of this year, it has become clear that the administration's focus on voluntary compliance was too optimistic. Loan servicers have shown that appearing compliant was important to them -- but actually granting loan modifications is not the same as merely appearing to do so. Putting any backbone into the program is an improvement, even if it's not the ideal solution for consumer advocates.
Throughout the mortgage crisis, Howard Law LLP has helped California borrowers pursue loan modifications, even when lenders refuse to play fair. We have successfully altered many loans, winning reductions in interest rates, longer repayment periods or even changes in the structures of exotic or subprime loans. Our Pico Rivera loan modification attorneys have been able to win changes to loans even when our clients had no luck on their own, a success we attribute to the fact that we are attorneys. When we call, loan servicers understand very well that a lawsuit will soon follow. In fact, we can and will file a lawsuit in every case where the facts support it, including cases of predatory lending, unfair foreclosures or gross negligence in handling the borrower's application. We want to leave every client with a sustainable, realistically sized monthly mortgage payment.
If you're facing default or foreclosure on your home loan and your loan servicer isn't returning your calls, Howard Law can help. To set up a free, confidential evaluation of your case, please contact us through our Web site or call 1-800-872-5925 today.