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Help calls bog down mortgage program

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TESS VIGELAND: The number of homeowners facing foreclosure rose again in June. And that's prompting lots of questions about the government's Making Home Affordable program. The Obama Administration launched it back in March and told banks to try to lower mortgage interest rates so people could keep up with their payments.

Tamara Keith reports that so far the results have been mixed -- at best.


Tamara Keith: Michelle McKiver's days are filled with a whole lot of this . . .

Automated voice: All of our representatives are still assisting other customers. Please hold and your call will be answered momentarily.

McKiver is a housing counselor at Neighborhood Housing Services of Baltimore, Md. The agency's services are free to just about anyone who needs help with their mortgage. McKiver's job: To help people keep their homes. And that means working the phones.

Michelle McKiver: Oh great, we just want to follow up with you. We know this account right now is in foreclosure and we want to know first of all, is there a sale date?

All day she talks with banks and loan servicing companies, trying to renegotiate the terms of her clients' mortgages. And in theory it should be easier these days. The idea of the Making Home Affordable Program was to simplify the process. It gives lenders and loan servicers financial incentives to cut payments. And it trims mortgage payments down to an amount borrowers can actually afford, no more than 31 percent of their monthly income.

But McKiver says still it can be a confusing and frustrating process.

McKiver: Sometimes you'll get someone that doesn't know what they're talking about and you'll hang up and you'll call and get somebody else. You'll hang up and then maybe, maybe you'll get somebody that actually knows what they're talking about.

McKiver says it can take months for a servicer to consider a loan modification request. She says the banks and servicers she calls just seem overwhelmed.

Matthew, Bank of America staff member: Thank you for calling the Home Retention Division. My name is Matthew. Can I ask who I'm speaking with today?

In Simi Valley, Calif., hundreds of people in cubicles are answering the phones at this Bank of America call center. They've been fielding nonstop requests for loan modifications.

Matthew: For May's installment you made that payment by the grace period. You were also able to make the payment for June within the grace period. Your account is current. Is there some kind of hardship that I'm not seeing?

One of the goals of the Making Home Affordable Program is to catch people before they fall behind on their payments. But borrowers have to prove they're actually in trouble. They need to provide tax documents and pay stubs, and they can't have too much in savings.

Tammy Tipton: Hi, it's Tammy, Bank of America, how are you?

Tammy Tipton is one of some 7,500 people in the bank's Home Retention Division. She's a loan workout specialist. That means she has the ability to modify someone's mortgage,

Tipton: Tell it to me straight. Tell me what your situation is, and I will represent you as best I can.

But it's not all up to her. Homeowners may send their checks to a company like Bank of America, but their loan has most likely been bundled up into securities and sold to investors. Tipton uses a computer program called Home Saver to figure out whether those investors will be better off with a foreclosure or a loan modification. In most cases, Tipton says a loan modification is best.

Tipton: The investors are seeing more and more willingness within themselves to say, "We need to work with these people. We need to not say no. Assisting is better than not getting anything at all. Assisting is better than having more homes that are empty.

The next step is bringing the payments down so the homeowner can afford them. With the blessing of the investors, Tipton can cut interest rates to as low as 2 percent or take a 30-year mortgage and extend it out to 40 years.

Seems simple enough. So why are borrowers and housing counselors complaining about long waits on hold and longer waits for answers? There are just too many people in trouble. Bank of America has doubled its staff in the Home Retention Division in the last eight months. But it has more than a million-and-a-half customers behind on their payments.

Tipton says it's overwhelming.

Tipton: I work probably, maybe, three hours of overtime a day, and maybe one Saturday a month. And I'm still swimming and drowning. But that's OK, because that's what we're here for right now.

Banks and loan servicers all over the place are having a hard time keeping up. Michael Barr is an assistant secretary at the Treasury Department who helped develop the Making Home Affordable program.

Michael Barr: A number of firms are doing a good job ramping up the infrastructure they need to make this work and a number of firms don't have that in place yet and need to do a much better job in the coming weeks.

Housing Counselor Michelle McKiver says she's starting to see some results. A loan modification for one of her clients just went through after only a month of back and forth with the bank. The homeowner's payments have been slashed in half.

So far, the Treasury Department says more than 270,000 loan modification offers have gone out. The Treasury doesn't have data on how many have been accepted. But the Making Home Affordable program is supposed to help 3 to 4 million homeowners. Some of them are probably sitting on hold right now.

In Washington, I'm Tamara Keith for Marketplace Money.

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I'm really scared that I'll lose my home, My mom and I have no where to go and I need a miracle we have to deal with American General/Spring Leaf Financial. They don't want to work with me and are telling me it is too late to save my home. They want to sell my house and I have Disabilities and my mom is elderly. I don't know what to do and I'm scared. Come Monday our house will be posted on the internet up for sale because of a real-estate company wanting to sell the house and give the money to the creditors. Can someone please help us before it's too late or is it too late already? Please tell me it's not? You're our only hope, please help if you can please?

How would you know that you have not been tricked in paying a portion of what is owed monthly and charged late fees and interest for the portions left unpaid each month? If a lender/servicer approves a loan modification, are the documents different from the "real loan modification"? Please provide us with guidelines to avoid of being tricked by lenders/servicers.

To all of you folks who believe you are at fault with your mortgage, Fear not, YOU ARE NOT TO BLAME! It is true all parties need to come to a compromise. Originally, a bank was formed to make money.We know this, no one even a layman would not like to make money.
I take mortgage, pay principle an interest over time. They make money.But now the banks are asking for more than this. New scheme is to "FOLLOW THE MONEY. " Get principle, interest, late fees, cancellation fees, take half the money from the client, show the balance as a loss, an cry to the goverment the client is no good, help me.They then take our unpaid balance use towards thier profits to show a loss to offset any gains, an keep the goverment bailout in their back pocket.
While in turn , most of us are trying to contact the banks, make agreements to make payments, extend our 30 year loans to 40. Or as most ask , give me a few months of no payments, stick it to the end of the mortgage an I'll pay any late fees an balances then. I DON'T SEE THIS AS RUNNING AWAY FROM MY RESPONSIBIILTY.
Why is it that houses that are up an auction an bidders bid, it always goes back to bank. Why is it, a bank ask for you to go threw a short sale, an they refuse the offers, numerous times.THEN GO TO FORECLOSURE.
If they sold it, an made a loan isn't that the start of jumping the economy.Maybe, the house needs work an they hire someone.Jump starting economy.
I may in most eyes of people think in simiple terms.But my word is my word.I don't ask for any more than I deserve, just be fair to get at least a chance to try.

My mom is in mortgage with Citi mortgage company and in 2009 I called Citi to see if they could help my mom with her payments after my dad passed in Jan. Of 09 and they game her the plebeian called home modifications which cut her payment in half from $666.17 to $305.00 and we made them payments faithfully up to July 9 2010 she received a letter saying she was about $2,000 behind on her payments and they were fixing to foreclose on her home and we are still fighting with them she can't get no help at all I saw the story on abc world news with the couple about to lose their home because what bank of America did to them that's exactly same thing that happened to my mom so I'm begging for some help from you Please she can't afford to lose her home so if would please help ASAP!!!! Thank you and if you want my number I will be more than glad to give it to you just email me

does abc news have bruce boguslav s phone number.

Next month I will be 24 months Post-Heart Transplant Thus having a reduction in income also. This caused my wife and I to fall behind on our mortgage. We have been trying to get Bank Of America to modify our loan and they did just after the transplant. Now here is the kicker, our loan was $210,000 after modification $255,000 and we are now $120,000 upside down. They lowered our payments from $1,640 to $1,600 and we have still been asking and we are now once again three months in the rear. So I asked BOA if we where under stress at $1,640 don't you think that we are still in dis-stress at $1,600? They asked for a new reason and the reason is the same so once again they said no. We had asked for a Principle reduction of lower out payments to $1,000 as my wife is working and have taken a pay cut I am now on disability because of my health. We just seen the spot on ABC
World News about Bruce Boguslav helping some people I wished he contact us and see if he could go to bat for us with BOA.n As I told BOA we aren't walking away like so many others have. but As my own doctors have told me "if you don't get your stress under control you won't be here for your wife and children. Thanks for allowing me to vent and I pray I may be able to speak with someone about this on-going situation.

This is awful and I hope you are doing better. You can reach us at either 508-304-9992 or via email at info@hsitrust.org. Thank you - Bruce

It would be more accurate to blame and compartamentalize the actions of middle men and intermediaries for the presant mortgage default problems. How often does it happen that mortgage brokers give buyers a loan with an unnecessarily high rate, so that they can get more comission pay, while the borrower pays several times what the benafets to the middleman are. How about the reverse mortgages that paid mortgage brokers more than the upfront loans that don't go up in future and make themselves impossible to pay. Likewise the stories about Realtors and their myopic interests in deals is the stuff of legend. To have third party middlemen , be the ones to have a fair and objective view of matters and fix them...ha ha.

I would guess that anyone who suggested that option, had their own self interest in that approach and by extention a biased view on the matter. If someone wants to place blame in such a simplistic and myopic way, then they ought to start with the middle men in the real estate and mortgage industry who more often than not have a conflict of interest with the wishes of home owners and borrowers. Conflicts of interest wherein their interests effect the borrower and home owner far disproportionately compared to the benafets of the middleman. In this case it is not only a conflict of interest, but a very disproportionate conflict of interest. Now we're gonna have the middlemen solve the problem.. what a joke.. How much do you make as a middleman dragging out the process and delaying things? Do you get paid when a modification is done, or monthly as things drag out? I say double the money that presantly goes to the FBI from 9.6 to 19.2 Billion and focus on the "middleman menace." It is more at fault for the presant problems than anything else.

As for fixing the issues through loan modificationss. It would be helpful to have accountants and legal professions handle the problems for the borrower. That is a start. An accountant who has a responsibility to be truthful about borrowers true financial status makes it fair for borrower and lender alike. The simple financial reality of things is a start towards being fair for both parties without a conflict of interest. Facts have a tendency to speak for themselves and numbers don't lie.

Having middlemen with conflicts of interest and leverage for doing fraud and schemes against borrowers and home owners... That certainly isn't the answer for anyone but a simpleton middleman with alterior motives.

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