Wikinvest Wire

Treasury Foreclosure 'SWAT Teams'?

Monday, December 14, 2009

NPR reports that the Treasury Department is sending SWAT teams out to call centers at the nation's big banks to see if they can speed up the home loan modification process that seems to have stalled, now threatening the nascent recovery for the U.S. economy

The administration says it is cracking down on mortgage companies that aren't doing enough to implement President Obama's program to prevent foreclosures. The government hopes to help 3 million to 4 million people. But many economists say the program is stumbling, and that greater oversight is needed.

About 750,000 people have had their mortgage payments reduced so far through the president's Making Home Affordable plan. But the vast majority of those people — more than 95 percent — are just in the temporary trial stage of the program. Meanwhile, the foreclosure crisis remains one of the biggest threats to the economy.
A few months ago NPR did a story on one of the main call centers run by Bank of America. Some homeowners were getting rescued from foreclosure and offered more affordable payments. But there were also some problems. At one point, a call center worker, Crystal Ingram, told a homeowner that he didn't qualify for help through the Obama plan. She told him, "At this point, sir, I'm not getting a recommendation for a modification." After punching his information into her computer system, it rejected the homeowner for help. But it shouldn't have.

When NPR pursued the issue with supervisors, it turned out the person actually did qualify. And the homeowner was later offered a loan modification.
Maybe they ought to just dispatch NPR staff out to the call centers. Based on the results above, they seem to be pretty effective at getting things moving along.

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Anonymous said...

Loan modifications haven't been working out as advertised. The default rate post modification is absurd.

People can't afford to repay these loans. Period. The purchase price was too high.

bevo said...

Until they cut the value of the mortgage, the default rates will continue to climb.

If you want to speed up modification, though, then threaten the banks' charters. We bailed out their asses. We cover their losses. They owe us (the American people). Either they modify the mortgages or we pull the charter.

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