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A Plan to Stem Foreclosures, Buried in a Paper Avalanche [View All]

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azurnoir Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Jun-29-09 01:32 AM
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A Plan to Stem Foreclosures, Buried in a Paper Avalanche
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Source: NYT

LOS ANGELES Somewhere on earth, there must be a more difficult task than this: persuading American mortgage companies to lower payments for homeowners who can no longer afford their loans. But as Karina Montenegro struggles to accomplish this feat for a troubled borrower, she strains to imagine a more futile pursuit.

Ms. Montenegro, an intern at a local company that seeks loan modifications, dials Washington Mutual to check on the status of an application for a homeowner whose income has plummeted. She endures a Muzak-scored purgatory while on hold. Syrupy-voiced customer service representatives chide her for landing in the wrong department. She learns that the documents her company sent in have simply vanished for the third time since November.

Ms. Montenegro and her colleagues suffer these sorts of excruciating exchanges all day long. It is a potent indication of the difficulties afflicting the $75 billion taxpayer-financed program created by the Obama administration in an effort to avoid foreclosure for as many as four million distressed homeowners.

Mr. Wasser has already negotiated a solution: GMAC will accept only $270,000 in repayment, allowing the couple to get a fixed rate mortgage from another bank.

But that suddenly is in disarray. The Piercys have been making their payments, but GMAC has been putting their checks aside, holding the money as loss mitigation fees, until their application is completed. It has notified credit bureaus that their loan is more than 90 days delinquent, which has lowered their credit score, disqualifying them for the next mortgage.


Read more: http://www.nytimes.com/2009/06/29/business/29loanmod.ht...



IMO this is a shell game banks and mortgage companies are playing with tax payers
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