Wells Prioritizes HAMP, While CRL Calls For Cramdowns

Posted by Orb Staff on August 05, 2009 No Comments
Categories : Mortgage Servicing

l industry members have weighed in on the Treasury's Home Affordable Modification Program (HAMP) report, which showed that 9% of eligible 60+ day delinquencies have begun trial modification plans. Wells Fargo, for one, says it has recently undertaken steps that enable the company to qualify most borrowers for a HAMP trial mod during the initial point of contact. In a company [link=https://www.wellsfargo.com/press/2009/20090804_HAMP][u]statement[/u][/link], Co-president Mike Heid conceded that the company has "fallen short of our customer service goals in some cases." Wells Fargo has started trial mods on 20,219 loans, or about 6% of its eligible 60+ day delinquencies. "Now that the program details are largely complete, our company has been accelerating our use of HAMP," Heid said. "We're confident we can achieve our portion of the government's goal to reach 500,000 HAMP trial modification starts by Nov. 1." The Financial Services Roundtable released a [link=http://www.fsround.org/media/htm09/statement_of_roundtable_and_hpc_on_administrations_first_servicer_performance_report.html][u]statement[/u][/link] Tuesday saying it believes HAMP's impact will grow as it becomes more fully implemented, but that "more can be done." "We continue to work hard to provide solutions to homeowners who have a desire and an ability to pay their mortgage with some assistance," the group's statement says. "The HAMP program will be an effective option for a growing number of homeowners." The Center for Responsible Lending (CRL), meanwhile, [link=http://www.responsiblelending.org/media-center/press-releases/archives/loan-servicers-show-failing-performance.html][u]argues[/u][/link] that servicers deserve a failing grade for their voluntary modification efforts. The CRL, while saying the Treasury's initial performance report was a significant first step, urges the publication of more detailed modification information. The group also maintained its position that bankruptcy cramdowns be allowed. "The same lenders who have received a taxpayer bailout have spent millions of dollars lobbying against a reasonable solution to the foreclosure crisis that would require no tax funding: allowing judges to modify primary mortgages in bankruptcy courts," according to the CRL statement. "For over three years, lenders have insisted they can handle this crisis on their own, but today's report shows that the time for voluntary action is over." SOURCES: [link=https://www.wellsfargo.com]Wells Fargo[/link], [link=http://www.fsround.org]Financial Services Roundtable[/link], [link=http://www.responsiblelending.org]CRL

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