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Report Finds One Mortgage Servicer Responsible for Half of HAMP Permanent Loan Modifications

October 14, 2009

As Fountain Valley loan modification lawyers, we have followed with great interest the reports from the Congressional Oversight Panel responsible for tracking the results of last year's $700 billion federal "bailout." That panel gave its report to Congress Oct. 9, and while the bulk of the news was not as encouraging as hoped, one piece of data stuck out. According to an analysis of the data by the Huffington Post Oct. 13, one mortgage servicer, Ocwen Financial, is responsible for about 45% of the loan modifications that have been converted from temporary to permanent under the federal Home Affordable Modification Program.

The finding is a bright spot for mortgage servicers, who have been roundly criticized by government and the media for their seeming reluctance to make modifications. HAMP was announced in the spring, but as of August, most loan servicers had modified fewer than 20% of their loans that were eligible for modifications. According to the analysis, Ocwen had 1,058 borrowers enter trial modifications through HAMP; more than 72% of those trials became permanent. By contrast, the average conversion rate for all servicers was 1.26%. It also has a re-default rate -- which measures how many modified loans go back into default -- of nearly half the rate for the industry as a whole. Regulators said the amount of data they have on permanent modifications is small, but they were still concerned about the industry's very low conversion rate.

One fact in the article stuck out for our Chino loan modification attorneys: Ocwen believes that making loan modifications under HAMP is a way for the firm to make money. There are other reasons cited in the article for Ocwen's much greater success, but we believe this positive attitude goes a long way toward explaining it. As we have written here several times before, we believe servicers' actions show that they don't really want to make loan modifications. How else to explain how so many major corporations could continually lose paperwork, route customers from phone to phone and incorrectly deny modifications? At least one study from the Boston Fed backs up this belief. Ocwen's data shows that, despite excuses from other servicers, mortgage companies are fully capable of modifying loans if they're willing to put some effort and resources into it.

At Howard Law LLP, we represent people throughout California who are in default on their mortgages -- or will be soon -- and know they need a lawyer's help to address it. Our San Bernardino County loan modification attorneys have gotten results for many clients who were unable to get their lenders' attention on their own, in part because we are attorneys. Banks understand that when attorneys are on the job, they had better pay close attention to whether they are violating their customers' rights. In fact, we start every case by reviewing the loan's history for evidence of predatory lending or other legal violations -- and if we find it, we are not afraid to file a lawsuit to stop it. Our goal is not to end up in litigation, but to help clients secure loan modifications that lower payments enough keep them out of default and in their homes.

If you're facing foreclosure and your lender isn't responding to your requests for help, you should call Howard Law for a free, confidential consultation. To learn about how we can help, you can reach us toll-free at 1-800-872-5925 or contact us through the Internet