Obama Government lashes out at Tardiness of Foreclosure Prevention Steps

The Obama government is lashing out at the tardiness of foreclosure prevention steps and is planning to hit out at the mortgage firms that are not doing enough to help the harassed borrowers.

The sluggish pace of the efforts to prevent foreclosures has angered the administration and in the forthcoming weeks it will focus on taking steps against the firms who are responsible for this slowness. Recently the officials of the Treasury said that they would put pressure on 71 mortgage firms that have been taking part in the plan involving $75 billion to arrest the foreclosure crisis.

A SWAT team comprising of three persons would be sent by the government to scrutiny the activities of 8 jumbo mortgage firms and ask from them to submit daily two reports detailing their progress.

The mortgage firms are also the loan servicers. The latter has been having difficulties of its own trying to make the borrowers submit relevant papers. The numbers are so staggering that the servicers are not being able to cope with the rush. About 60% of the borrowers numbering 375,000 who are eligible for loan modification have submitted by the close of this year incomplete documents. Some have not given any papers at all.

Phyllis Caldwell heading the homeownership preservation office of the Treasury said, “Borrowers must understand the urgency of getting their completed paperwork in so they do not miss out on the opportunity for more affordable mortgage payments.” The programme initiated by the Obama government permits the lowering of interest rates to as much as 2% for a period of 5 years.

The government is under tremendous pressure from the legislators and consumer advocates to expedite the measure. Till the first week of September only 1,700 homeowners had completed filing all the related documents and shifted to permanent modification status. A third of all those who have completed their applications and submitted the same are still hanging around for confirmation.

In order to make the companies feel ashamed for their tardiness and to give them a poke to hurry up, the Treasury would soon publish the names of the offending mortgage firms. Jumbo lenders like Wells Fargo and Citigroup have made good progress as regards number of trial modifications but others like Ocwen Financial and American Home Mortgage Servicing have only increased the numbers by 6% since last July.

Original Post: http://www.foreclosure1.com/blog/foreclosure/obama-tardiness-foreclosure-prevention-steps