CA Consumers Push Repossession Property Prevention Drive
Distressed homeowners in California are being helped by 275 public and nonprofit organizations which have been working to reduce repossession property numbers under their umbrella association called California Reinvestment Coalition.
This week, the coalition released to the media and to the public their finding that mortgage lenders and servicers in the state have not been cooperating with the federal government in helping consumers and homeowners under the repossession property prevention program.
The coalition surveyed 54 nonprofit home loan counselors and nonprofit legal service agencies across the state. Most of them said they failed to obtain loan modifications for the homeowners they counseled in March despite California’s own repossession property prevention schemes.
Only18 percent of survey participants said they were able to work out loan medications for distressed homeowners.
A stunning 75 percent of the housing counselors said most of the mortgage loans they evaluated were unaffordable to those who took them out. Nearly 70 percent said the repossession property problem has grown so fast that many consultants advertised their services as foreclosure prevention and loan modification specialists and charged high consultation fees.
Kevin Stein, one of the directors of the coalition, said the media is full of statements from mortgage lenders and servicers that they have been completing a lot of loan modifications, but according to counselors, most loan modification applicants are being turned away.
Stein said that the loan servicers and lenders have already obtained $15 billion in assistance from the federal government’s repossession property prevention program, but have not yet put their systems in place to help troubled homeowners.
In response to the coalition’s claims, Dustin Hobbs, spokesperson for the California Mortgage Bankers Association, stated that the survey ignored more reliable data about the results of the Making Home Affordable program.
Hobbs pointed to a document from the Federal Housing Administration which showed that loan modifications have increased by 57 percent nationwide among mortgage loans guaranteed by mortgage companies Fannie Mae and Freddie Mac.
Hobbs also said that the California Department of Corporations reported on June 15 that mortgage lenders in the state have been voluntarily increased their efforts to modify more loans and help more homeowners.
He added that the percentage of successful loan payment modifications out of all mortgage workouts being negotiated has surpassed the 60 percent level and that the number of loan modifications under the government’s repossession property prevention program have exceeded 62,000 during the first quarter.
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