Mortgage Lenders Sign Non-Binding "Compacts" on Foreclosure Crisis
Submitted by Jeff on Mon, 04/07/2008 - 3:00pm.
I'm not optimistic that this will do much good, ultimately.
After eleven mortgage lenders refused to sign agreements with the state by the deadline set last fall (November 8th), the state has continued to negotiate with them and now nine have signed agreements that they will "work with borrowers to modify those loans or at least notify borrowers several months in advance of when their loans will reset." Gov. Strickland hailed the agreements as "historic" and said they "will reduce foreclosures in Ohio and bring stability to the families and communities affected by this crisis."
However, the agreements are "non-binding" and the companies' obligations appear to be qualified, as least if the description in the press are accurate (the lenders will "try" to modify mortgages and make "good-faith efforts" to contact borrowers). The agreements appear to consist of generalized goals that the companies will decide how to implement.
I'll be interested to hear what Bill Callahan has to say about these compacts, but they seem too vague and watered-down to do much good, especially since many of these subprime mortgage lenders have previously proclaimed that they were assisting borrowers when in fact they were not. I think the state still needs to be investigating the causes of the mortage meltdown and taking appropriate legal action against the perpetrators, not relying on these non-binding agreements.
Too late for voluntary
Although I applaud Governor Strickland for making this effort, I agree with Jeff that any voluntary agreement amongst a fraction of the lenders in our state will probably not resolve this crisis.
Lenders could be working to resolve this problem right now, but too many are doing nothing substantive. PR? Yes. Modified loan terms? Not so much.
I think that this story from the Toledo Blade illustrates the problem. Right now, there are measures that lenders could take (and indeed some are) but many lenders are doing nothing.
Our mortgage on this house was originated by a small savings and loan which was acquired by a larger bank which was itself acquired.
The servicing on the mortgage was subsequently sold FOUR TIMES before finally winding up with Homeside. There is nothing I can say about that outfit which is suitable for a "G" rated blog...
Their computers were hacked and we were one of almost 300,000 (!) customers whose personal data was stolen! And our account was "hijacked." Someone changed the address on our account to a mail drop in El Cajon, Ca! Those IDIOTS at Homeside were too STUPID to realize that you can't pick up a house (even one this small!) and just move it across the country. They continued to send mail to us at the crook's address and then (get this!) charged us 150 BUCKS to send some clown to our house with a notice that our payments weren't being credited to our account.
So, do I have much faith in a voluntary strategy?
Well, uh, no, actually...
Postscript: It was several years before the damage was removed from our credit history. Fortunately, we were finally able to get a new mortgage from a local company that services over 98% of their mortgages "in house", and a MUCH lower rate to boot. If you live in NW Ohio and are looking to refi, I suggest you contact our loan officer. She's the best.