Lawmakers are talking the talk, but mortgage lenders are having a hard time walking the walk when it comes to helping at-risk borrowers.
By Jeanne Sahadi, CNNMoney.com senior writer
September 26 2007: 5:53 PM EDT
NEW YORK (CNNMoney.com) -- The bullhorn message from the government to mortgage lenders has been: Bend. Do what you can to help struggling homeowners.
The message to troubled homeowners has been: Call your lender. You may be able to work something out.
Despite the persistent blare, there is not a whole lotta "loan modifying" going on yet.
A survey by Moody's found that most subprime-loan servicers this year had modified only about 1 percent of their adjustable-rate mortgages (ARMs) that had reset to higher rates by the end of July. Servicers, which may or may not be the original lender, collect mortgage payments and deal with defaults and foreclosures.
Read more . . . money.cnn.com/2007/09/26/...ns/index.htm
By Jeanne Sahadi, CNNMoney.com senior writer
September 26 2007: 5:53 PM EDT
NEW YORK (CNNMoney.com) -- The bullhorn message from the government to mortgage lenders has been: Bend. Do what you can to help struggling homeowners.
The message to troubled homeowners has been: Call your lender. You may be able to work something out.
Despite the persistent blare, there is not a whole lotta "loan modifying" going on yet.
A survey by Moody's found that most subprime-loan servicers this year had modified only about 1 percent of their adjustable-rate mortgages (ARMs) that had reset to higher rates by the end of July. Servicers, which may or may not be the original lender, collect mortgage payments and deal with defaults and foreclosures.
Read more . . . money.cnn.com/2007/09/26/...ns/index.htm
-
Re: Subprime: Big talk, little help
Thu, September 27, 2007 - 10:27 AMgreat link!
"if a borrower is behind because of the rate hike, in general that is not enough of a reason to modify the loan. The borrower needs to have a reason [e.g., losing one's income or a medical crisis] and proof they can make the modified payment," said Erica J. Sandberg, CCCS of San Francisco's financial education and communications advisor.
And lenders are not likely to even consider a modification unless a borrower is already behind in their payments, Sandberg said."
so true! seems like a catch 22 for a homeowner/borrower that knwos trueble looms yet the servicer may not be able to make changes without the investors approval, those same investors that are no longer buying loans in secondary market....by helping people early in the process the spiral can cool down, yet here is where wall street needs to jump in....yet fall so short....
