Banks must improve loan modifications
U.S. Treasury Secretary Timothy Geithner participates in a question and answer session at the Time Warner Center in New York City, where he discussed the Obama administration's efforts to repair and strengthen financial systems.
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KAI RYSSDAL: The White House has spent a lot of time and energy and political capital on home loan modifications. The administration's Making Home Affordable program is supposed to modify mortgages for as many as 4 million people at risk of losing being foreclosed on. Today, Treasury Secretary Timothy Geithner let it be known he thinks banks and loan servicing companies aren't doing their part. And he's going to be watching.
From Washington, Tamara Keith has more.
Tamara Keith: Rena Somar is a counselor at Neighborhood Housing Services of Baltimore, Md. She guides homeowners through the often frustrating process of getting a loan modification. Somar spends a lot of time calling loan servicing companies.
And holding, for 20 minutes, sometimes 45. But the waiting doesn't stop there.
Somar says some servicers have told her it will take as much as 90 days to consider a clients application.
Rena Somar: When you call an ask them, why is it taking so long? "Well ma'am, this is because there are so many people that we're trying to resolve." I believe they are, I believe they are. It's just, I wish they could just tell the client yes or no.
The letter sent to loan servicers makes it clear, the Obama administration has heard these complaints and is applying pressure. The Treasury Department will soon release information about how many loans each servicer has modified, so it will be easy to tell which companies are doing a good job and which ones aren't. Treasury is also tracking things like telephone hold times and how long it takes to process an application.
Faith Schwartz is the executive director of the Hope Now Alliance, which includes all of the major banks and loan servicers.
Faith Schwartz: This is tricky. It is an unprecedented volume. But I believe they're getting their arms around it and you'll just see a better outcome in a couple of months than you're seeing today.
Servicers say they're hiring staff quickly and trying to get up to speed on what is still a new program. Schwartz's advice to homeowners? Be tenacious. And patient.
In Washington, I'm Tamara Keith for Marketplace.