Mortgage Relief Program: Is Government Debt Relief an Option ...

If it?s broke, don?t fix it,? seems to reflect the current administrations response to the continued abysmal performance of the large Servicers in implementing programs to keep people in their homes. I recently spoke to a colleague at one of the Mega-Servicers who shared with me that out of the last 20,000 Home Affordable Modification Program (HAMP) packages sent to homeowners that only 400 of those packages resulted in a completed loan modification. Our firm?s analysis of the work-flow processes of the Servicers clearly demonstrates ?large service and technology gaps? that explains why only a very small percentage of homeowners have actually benefited from loan modifications.

If you have been facing problems in paying off the loan in the recent past, then you should go through this incentive plan before you call it quits. According to the American Recovery and Reinvestment Act of 2009, anybody who has taken a loan from the Federal Housing Administration (FHA) is eligible for refinancing their loan. This refinancing is done through the Economic Stimulus Act that was introduced in 2008.

Helping Families Save Their Homes Act is another package given by the government to assist families that are facing problems in making their monthly payment on mortgage relief program. This is part of the HOPE Plan, which was amended. Under this Act, people, who are facing difficulties in clearing their mortgages on a monthly basis, will be granted a reprieve. The financial relief is provided by way of reduction in the origination fees, providing some form of incentive to the lender and a reduction in administrative formalities.

?Right? Party Contact Matters
Servicers use inadequate methods to contact and engage the borrower in order to evaluate whether a work-out can be accomplished. With so many consumers capitulating due to delinquent mortgage, and unsecured consumer debt such as credit card debt and personal lines of credit, a growing number of homeowners simply do not bother to answer their phones to avoid the stress of dealing with high pressure collection agents. A vast majority of the Servicer?s infrastructure and staff is consumed by servicing collection calls, chasing consumers that are delinquent and barraging households with multiple phone calls daily that are generated by automatic dialers. To be clear, the purpose of these calls is to collect on delinquent mortgage and credit card debt payments, not to offer a proactive approach in helping the borrower understand his/her options. As Director Demarco has clearly stated, Servicers were never prepared to handle the acceleration of nonperforming loans; but after several years of failure it is now time for the Servicers to embrace some new processes and technologies to better manage, track and automate the loan life-cycle.

Employing a ?Right Party Contact Model? that utilizes licensed Field Services Agents that make multiple trips to the home and talk to neighbors in order to make direct contact with the actual borrower is becoming a intregal step in work-flow process. When paid for by the Servicer, a real time financial interview is conducted and the homeowner?s current income and employment information are fed into an Automated Analytics Engine to determine whether a note holder qualifies for a loan modification; if so, a HAMP Package is generated to be printed and hand delivered to the note holder. Upon completion, the HAMP package is then checked over for accuracy and completeness by the Field Service Agent (or processing center) then forwarded directly to the Servicer for final approval. In the current Servicer model so many note holders are simply overlooked as the Servicer possesses no predictable process to ensure the note holder outreach, qualification, delivery, processing of documents and approval for a note holder that would normally receive a completed loan modification if the proper process technologies were in place.

Learn more about Obama Mortgage Relief Plan Qualifications.

Posted by John Roney on Jul 21st, 2011 and filed under Mortgage. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

Source: http://www.chillicious.com/mortgage/mortgage-relief-program-is-government-debt-relief-an-option/

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