Obama’s foreclosure prevention program has helped far fewer homeowners than expected

And no one in the media is reporting that the HAMP program was never met to help a majority of homeowners when in fact no one is discussing that many of the loans have been securitized and sold on Wall Street and investors and note and deed have been split into pieces.

When the Obama administration announced a massive effort to help distressed homeowners in 2009, it set high expectations. The program, government officials said, would keep up to 4 million borrowers out of foreclosure.

“It will give millions of families resigned to financial ruin a chance to rebuild,” Obama said at a event announcing the effort. “By bringing down the foreclosure rate, it will help shore up housing prices for everyone.”

Six years later, Obama is preparing to leave office, and the Home Affordable Modification Program, or HAMP, accepted its final applications Friday having helped a fraction of the homeowners government officials initially expected. About 1.6 million borrowers have seen their mortgage payments lowered through the program so far, but about a third of those people eventually fell behind on their payments again.

Read on.

Fannie, Freddie replace HAMP with new foreclosure prevention program

(Update 1: A previous version of this article stated the Flex Modification foreclosure prevention program replaced HARP. The article is now updated to say it replaced HAMP only)

Fannie Mae and Freddie Mac announced on Wednesday their replacement for the Home Affordable Modification Program. The government sponsored enterprises revealed the Flex Modification foreclosure prevention program, which is designed to help America’s families by offering reductions to their monthly mortgage payments.

The government’s Home Affordable Modification Program is slated to end on Dec. 31, 2016, concluding a seven-year government program designed to save struggling homeowners who are behind on their mortgage, or in danger of imminent default due to financial hardship.

HAMP’s sibling, the Home Affordable Refinance Program, which was created at the same time, was extended in August until Sept. 30, 2017 in order to create a smoother transition period for a new refinance product.

“The new Flex Modification announced by Fannie Mae and Freddie Mac (the Enterprises) today was designed based on lessons learned from crisis-era loan modification programs to help borrowers stay in their homes and avoid foreclosures whenever possible,” the FHFA said in a statement.

The Flex Modification also reflects input received over the course of extensive engagement with lenders, mortgage insurers, consumer advocates, and other stakeholders, the statement adds.  By avoiding the high costs associated with foreclosures, the Flex Modification will result in significant savings for the Enterprises and taxpayers, the FHFA said, and it will provide borrowers who face permanent hardships with a sustainable modification.

“The Flex Modification is an adaptive program that will allow us to continue to assist struggling homeowners in a changing housing environment and simplify the process for servicers to deliver those solutions,” said Bill Cleary, Vice President of Single-Family Servicing Policy, Fannie Mae. “We believe the program is flexible to adjust for regional and even local differences in housing. It provides the greatest amount of assistance to those areas in need.”

Read on.

Say goodbye to HAMP: Dec. 31, 2016 marks the end of a seven-year government program

Dec. 31, 2016 marks the end of a seven-year government program designed to save struggling homeowners who are behind on their mortgage, or in danger of imminent default due to financial hardship.

The government’s Home Affordable Modification Program also came with incentives for servicers and investor, which worked to help unify the industry after the financial crisis.

HAMP’s sibling, the Home Affordable Refinance Program, which was created at the same time, was extended in August until Sept. 30, 2017 in order to create a smoother transition period for a new refinance product. HAMP, on the other hand, is still slated to end at the end of this year.

Read on.

Homebuyers beware of fake HAMP offers

Housingwire:

With Home Affordable Refinance Program extended into 2017, it also means that the threat of scammers pretending to offer government-sponsored modifications isn’t going away. Beware.

The threat, as mentioned in a blog piece from PennyMac, focuses on the Home Affordable Modification Program, which will still end at the end of the year, but borrowers should always be on guard for scammers.

PennyMac stresses that borrowers need to beware of fraudulent “Making Home Affordable” offers.

“Owning a home can be expensive and, as one of your largest assets, it’s important to protect. As a homeowner, you may receive hundreds of offers a year to refinance or modify your home loan, promising a lower monthly payment. Unfortunately, not all offers are legitimate,” the blog stated.

The scam:

There are companies out there targeting homeowners with fraudulent offers. These scammers call and mail homeowners pretending to be your mortgage servicer or a representative from the Federal Government’s Home Affordable Modification Program. They prey on unsuspecting homeowners by offering fake loan modifications and “trial payment plans”, along with promises of lower monthly mortgage payments. And while these scammers may send genuine-looking letters with your mortgage company’s logo and account number, they also provide deceptive contact information in an effort to route your payment away from your servicer and directly to them. In fact, they may also call from telephone numbers that show up on caller ID as the homeowner’s actual mortgage company

If borrowers for any reason are uncertain about the offer, PennyMac urges them to contact their lender.

Unfortunately this isn’t the only account of mortgage scams happening, back in March, the Federal Trade Commission and the National Association of Realtors issued a warning to consumers, advising them that they could be the next victim of a mortgage closing cost phishing scheme.

According to the FTC and NAR, scammers were hacking the email accounts of consumers and real estate professionals to obtain information about upcoming real estate transactions.

Bank of America to Defend Racketeering Claims

(CN) — Homeowners can sue Bank of America for claims it feigned compliance with a mortgage assistance plan that was a condition of the bank’s $45 billion bailout in 2008, the 10th Circuit ruled Monday.
Bank of America hired Urban Settlement Services dba Urban Lending Solutions to administer its Home Affordable Modification Program, or HAMP.
The bank was required to participate in HAMP as a condition of receiving a $45 billion bailout from the federal government to shore up the bank’s bad loans during the 2008 financial crisis. The government also guaranteed $118 billion in potential losses at the bank.
HAMP required Bank of America to collect financial information from at-risk borrowers, and evaluate their eligibility for a loan modification that would allow them to pay a lower interest on their mortgage.
The program allowed eligible borrowers to enter a trial period plan to demonstrate their ability to make lower monthly payments, and permanently modified loans if the borrowers made regular payments.
But a class of homeowners led by Richard George say Bank of America and Urban conspired to obstruct and delay their HAMP loan modification applications.

Read on.

Feds propose guidelines to replace expiring foreclosure relief efforts

Begun as the government’s response to the foreclosure crisis, the Treasury Department’s Home Affordable Modification Program wasn’t supposed to last forever.

The Dec. 31 end of the foreclosure relief program, which offered a more affordable payment by adjusting interest rates, extending the loan term, and reducing or forbearing principal, will leave a gap that the government is trying to fill.

The Consumer Financial Protection Bureau, created under the Dodd-Frank Act of 2010, is proposing consumer protection principles to guide mortgage servicers, investors, government housing agencies and policymakers as they develop foreclosure-relief solutions to replace what is better known by its acronym HAMP.

The Home Affordable Refinance Program, known as HARP, which was designed to help homeowners who’ve seen a drop in home values refinance with better mortgage terms, also expires Dec. 31.

Read on.

SIGTARP: Mortgage Servicers Have Wrongfully Terminated Homeowners Out of the HAMP Program

WRONGFUL TERMINATIONS OF HOMEOWNERS FROM HAMP BY TOP HAMP SERVICERS, Q4 2014 TO Q3 2015 Servicer Wrongful Terminations of Homeowners from HAMP Bank of America, N.A. X CitiMortgage Inc X JPMorgan Chase Bank, N.A. X Nationstar Mortgage LLC X Ocwen Loan Servicing, LLC X Select Portfolio Servicing, Inc. Wells Fargo Bank, N.A. X X Wrongful terminations of homeowners from HAMP found by Treasury. Source: Treasury’s servicer compliance examination reports covering Q4 2014 through Q3 2015, as provided to SIGTARP

Ugh!

Stopforeclosurefraud:

TARP’s major foreclosure prevention program, the Home Affordable Mortgage
Program (“HAMP”), was created to provide sustainable and affordable mortgage
assistance to homeowners at risk of foreclosure.1 Although this program is at a
turning point in its lifecycle, mortgage servicers administering HAMP will continue
to need strict oversight in upcoming years. While HAMP was already scheduled to
stop accepting homeowner applications on December 31, 2016, Congress recently
terminated HAMP as of that date, but protected homeowners’ ability to stay in
HAMP and receive TARP-funded assistance for up to six years.2
To give homeowners in HAMP the best shot at keeping their homes, the
greatest concern going forward should be helping the homeowners who are in
HAMP to stay in HAMP for the full six years. Already, as of December 31, 2015,
507,359 homeowners with permanent HAMP modifications fell out of the program
by missing three payments (referred to as “redefaulting”) – which is almost one out
of every three homeowners in HAMP.3,i

The harm to a homeowner falling out of HAMP is significant, as they are
no longer eligible to receive TARP incentive and other benefits.ii According to a
Treasury survey of HAMP servicers:4
• 23% of all homeowners who redefaulted out of HAMP moved into foreclosure,
• 12% of redefaulted homeowners lost their homes through a short sale or deedin-
lieu of foreclosure, and
• 28% of redefaulted homeowners received an alternative modification,
usually a private sector modification that is less advantageous than a HAMP
modification.iii

Given the high percentage of homeowners falling out of HAMP and known
problems with servicers not following HAMP rules, in October 2013, SIGTARP
recommended that Treasury research and analyze whether, and to what extent, the
conduct of HAMP mortgage servicers contributed to homeowners redefaulting on
HAMP permanent mortgage modifications.iv Although Treasury has not conducted
a full analysis, Treasury has partially implemented SIGTARP’s recommendation,
and reviews samples of 100 homeowners who had redefaulted out of HAMP at
each of the largest HAMP servicers each quarter as part of Treasury’s on-site and
remote compliance testing at each of the largest servicers.

SIGTARP’s concerns over servicer misconduct contributing to homeowner
redefaults in HAMP have been borne out. Treasury’s findings in its on-site visits to
the largest seven mortgage servicers in HAMP over the most recent four quarters
show disturbing and what should be unacceptable results, as 6 of 7 of the mortgage
servicers had wrongfully terminated homeowners who were in “good standing” out
of HAMP.v

These staggering findings clearly show that servicer misconduct is contributing
to some homeowners falling out of HAMP. Homeowners were wrongly terminated
from HAMP by their servicer despite making timely mortgage payments, putting
them at risk of losing their home. These homeowners were forced out of HAMP
through no fault of their own. Mortgage servicers did not give these homeowners a
fair shot. As these instances were found through sampling, Treasury does not know
how many other homeowners were also wrongfully forced out of HAMP.

IN THE LAST YEAR, SIX OF THE SEVEN LARGEST
HAMP SERVICERS WRONGFULLY TERMINATED
HOMEOWNERS OUT OF HAMP WHO WERE PAYING
THEIR MORTGAGE

Here is SIGTARP report. Click here.

Obama Administration’s Major Federal Foreclosure Prevention Program Will Come To An End In 2016

The Making Home Affordable (MHA) Program, which was launched in 2009 to assist millions of distressed homeowners facing foreclosure, is set to expire on December 31, 2016. Under this program, homeowners with non-GSE mortgages (i.e. mortgages not owned or guaranteed by FannieMae or Freddie Mac) may apply and be reviewed for refinancing, loan modifications, short sales, deeds-in-lieu, and unemployment assistance with their lenders in accordance with stringent guidelines set forth in the Making Home Affordable Handbook. Many homeowners who were approved for loan modifications under the Home Affordable Modification Program (HAMP) were also eligible for free HUD-approved credit counseling to assist them in creating a household budget that lowers the risk of default in the future.

Previously set to expire on December 31, 2015, MHA was extended through 2016 due to its widespread success and the continuing need for relief for millions of homeowners nationwide. However, the number of applications under the MHA program have declined overall in recent years due to both the stabilizing housing market and drop in the unemployment rate. At the end of 2015, RealtyTrac reported that there were 1,083,572 properties with foreclosure filings nationwide—a significant drop from the peak of 2,871,891 properties with foreclosure filings in 2010. As of May 2016,RealtyTrac reported a total of 896,913 properties in default, at auction or repossessed by the banks.

The Obama administration has not yet announced another one-year extension to the program through 2017, and it is unclear at this time whether such an extension will be granted. The unknowns that are involved with the looming presidential election make the possibility of an extension even less clear. Though the foreclosure rate is down, there is still a great need for the MHA program for the many properties currently in foreclosure and the many millions more that are still at risk for default.

Read on.

Ocwen to pay $30 million in settlement over alleged FHA, HAMP violations

Will pay $15 million to U.S., $15 million to consumers

Ocwen Financial disclosed Thursday morning that it will pay $30 million to settle a pair of lawsuits that accused the nonbank of falsely certifying that it was in compliance with Federal Housing Administration and Home Affordable Modification Program rules.

Ocwen revealed the settlement in a filing with the Securities and Exchange Commission.

In the filing, Ocwen stated that it reached an agreement in principle to settle two related cases, U.S. Ex rel. Fisher v. Homeward Residential, Inc., et al and U.S. Ex rel. Fisher v. Ocwen Loan Servicing, LLC, et al, which are referred to as the Fisher Cases.

Read on.

UNITED STATES OF AMERICA ET AL V. OCWEN: JUDGE RULES DOCS ADMISSIBLE IN HAMP FALSE CLAIMS ACT CASE

“In 2009, Ocwen Financial Corp. participated in the U.S. Department of Treasury’s Home Affordable Modification Program and the relators allege the company lied about its compliance with the program’s guidelines, according to court documents. HAMP helps homeowners avoid foreclosure by lowering interest rates and payments, extending terms and forgiving principal, but in OFC’s case, it allegedly led to homeowners losing their properties while executives took nearly $2 billion in incentive payments from the government.”

A Texas federal judge on Tuesday determined that banking documents related to a state government investigation into Ocwen Loan Servicing LLC’s financial practices, which the company claims to have “inadvertently disclosed” to relators bringing a pair of False Claims Act suits, are not privileged and can be used at trial.

Ocwen Loan Servicing, and subsidiaries Ocwen Financial Corp. and Homeward Residential Inc. are facing a pair of lawsuits brought by relators Michael J. Fisher and Brian Bullock alleging the companies provided false information to a federal loan program. U.S. District Judge Amos L. Mazzant on Tuesday rejected an argument from Ocwen that the reports produced by the West Virginia Division of Financial Institutions, according to West Virginia law, “shall be confidential,” because the documents discuss the financial condition of the loan servicing company.

The court found that the state’s laws actually explicitly say that in the context of a civil enforcement brought by a state or regulatory authority, that information can be disclosed. In this case, the relators “stand in the shoes of the state,” he wrote, which permits disclosure.

Rest here…