Mortgage loan servicers negotiated 1.76 million permanent loan modifications for homeowners last year, but more than two-thirds of them were completed in-house and not part of the federal government’s Home Affordable Modification Program.
A year-end report Wednesday from Home Now, a private-sector group of mortgage servicers, investors, insurers and non-profit counselors, showed that mortgage servicers arranged 1.24 million proprietary permanent modifications, compared to the 512,712 modifications begun under the government’s more rigorous HAMP program. In 2009, more than half of the total number of loan modifications made were through HAMP.
It’s unclear how many of those permanent in-house modifications received during 2010 are still current. On Monday, the Treasury Department said one in five homeowners who received a permanent HAMP modification during 2009’s final quarter was at least 60 days delinquent on their mortgage payments at the end of 2010.
In an indication of the serious difficulties that lie ahead for consumers and the housing market this year, the number of consumers who were at least 60 days behind on their mortgage totaled 2.87 million in December. Still, 60-day loan delinquencies are 30 percent lower than they were at the end of December 2009.
Hope Now’s data also showed a significant fourth-quarter drop in foreclosure starts and sales, compared with the third-quarter, but that is largely the result of mortgage servicers temporarily suspending foreclosure actions while they and states investigated their back-office procedures.
Maybe this will get the attention of Treasury and the White House, and get some real action on bank abuses in the mortgage mess.
One of the nation's biggest banks — JP Morgan Chase — admits it has overcharged several thousand military families for their mortgages, including families of troops fighting in Afghanistan. The bank also tells NBC News that it improperly foreclosed on more than a dozen military families.
The admissions are an outgrowth of a lawsuit filed by Marine Capt. Jonathan Rowles. Rowles is the backseat pilot of an F/A 18 Delta fighter jet and has served the nation as a Marine for five years. He and his wife, Julia, say they’ve been battling Chase almost that long.
The dispute apparently caused the bank to review its handling of all mortgages involving active-duty military personnel. Under a law known as the Servicemembers Civil Relief Act (SCRA), active-duty troops generally get their mortgage interest rates lowered to 6 percent and are protected from foreclosure. Chase now appears to have repeatedly violated that law, which is designed to protect troops and their families from financial stress while they’re in harm's way.
A Chase official told NBC News that some 4,000 troops may have been overcharged. What’s more, the bank discovered it improperly foreclosed on the homes of 14 military families....
The saga began in 2006 when Rowles went on active duty. Under the SCRA, he could get his mortgage interest rate, which was adjustable and rising, lowered to 6 percent.
But Chase took a few months to lower Rowles' rate, overcharging the family, Rowles says, by as much as $900 a month. In the fall of 2006, Chase finally began charging Rowles the correct 6 percent rate. For the next year or so, everything went relatively smoothly.
Then, two years ago, the Rowles family says, Chase began hitting them with collection calls that escalated to sometimes three a day, claiming they owed as much as $15,000.
"Saturday, Sundays, middle of the night. It did not matter if it was a holiday," Julia said. "Collection calls at 3 in the morning. He would state, "I'm in California. I'm stationed here in Miramar. It's 3 in the morning. What are you doing calling me?" "Well, sir, this is an attempt to collect a debt."
She said they threatened to take the house and report the family to a credit agency, even though the Rowles family didn't owe the bank anything and never missed a payment.
The Rowles' records show that while they kept making payments on their mortgage at 6 percent, the bank wrongly had been charging them at rates above 9 or 10 percent. They kept calling the bank to explain there had been a huge mistake but say no one would listen. They say they kept being harassed for money they did not owe.
Fed up, Capt. Rowles got a lawyer and sued Chase, for himself and other members of the military.
It's fantastic that Chase is owning up to the fact that it ripped off these families and is doing something about it (finally, after being sued). But what about all the other families who have been subjected to the same kinds of errors? We know they are legion. Given that the new White House chief of staff was most recently vice chairman of this very bank, JP Morgan Chase, now would be a really good time for the White House to finally act on foreclosure fraud. If for nothing else than the optics.
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