---

---

Published: October 2008

Mortgage companies asked to do more to help at-risk homeowners

In a letter to mortgage servicers accused of doing little to help at-risk homeowners, U.S. Senator Barbara Boxer (D-CA) asks that they temporarily suspend foreclosures and participate in the Hope for Homeowners Program.

The 21 companies in question were identified as "difficult to work with" in a report published by the California Reinvestment Coalition. The report was based on a statewide survey of mortgage counselors working with at-risk homeowners in California.

Click here to download the report

The Hope for Homeowners Program, which was passed by Congress and signed into law by the President in July, aims to prevent foreclosures by providing $300 billion in Federal Housing Administration (FHA) backing to lenders who agree to take a loss and provide borrowers with new, long term, fixed-rate loans they can reasonably be expected to repay.

The companies receiving the letter were Accredited Home Lenders Holding Co.; American Home Mortgage Servicing/Option One; Aurora Loan Services; Carrington Mortgage Services; Chevy Chase Bank; Citigroup; Downey Savings and Loan Association; First Federal Bank of California; GMAC ResCap; HomeEQ; HSBC North America Holdings Inc.; JPMorgan Chase; Litton Loan Services; Ocwen Financial Corporation; PHH Mortgage; Saxon Mortgage Services, Inc.; Select Portfolio Servicing; Wachovia; Washington Mutual; Wells Fargo; and Wilshire Credit Corporation.

Also named in the report but not receiving Boxer's letter were Indymac Bank, which is now under FDIC control and Bank of America, along with its recent acquisition, Countrywide, which together have agreed to temporarily suspend foreclosures and begin renegotiating some 400,000 mortgages on December 1st as part of a nationwide settlement.

The text of the letter from U.S. Senator Barbara Boxer (D-CA) follows:

Recently, Congress passed major housing legislation that included a program that promises to provide immediate relief to worthy homeowners while limiting losses to lenders. As one of California's major mortgage servicers, I strongly urge you to participate in this "Hope for Homeowners" program and ensure its success. The program, which was also expanded in the Emergency Economic Stabilization Act, officially began October 1, and I am writing to urge you to participate in the program, delay foreclosures, and include as many eligible homeowners as possible.

The Hope for Homeowners Program will allow servicers and investors to take a single loss now, but avoid the cost of foreclosure, and eliminate the risk of future loss. In exchange for taking this loss and providing the borrower with a new loan she or he can reasonably be expected to repay, lenders receive the government's guarantee that any future losses will be covered by the Federal Housing Administration's mortgage insurance program. With your help, this program can keep thousands of people in their homes, slow the decline in housing prices, and help stabilize the overall housing market.

The program will not work, however, if lenders and servicers fail to participate. Should they continue their reluctance to make reasonable loan modifications, Congress can be expected to take a closer look at lender and servicer practices to determine what additional measures will be needed.

It is my hope that the Hope for Homeowners Program will bring servicers, lenders, investors and homeowners together to make strides in bringing our homes and our communities out of this economic crisis. I urge your participation and look forward to working with you toward that future.

For More Information

California Reinvestment Coalition

---

Download File

No Download Available

Category

Congress   ♦   Housing   ♦