Gov't to rate how lenders treat borrowers: AP

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Gov't to rate how lenders treat borrowers: AP

Gov't to rate how lenders treat borrowers: AP

Very simple.

 

Posted on Mon, May. 3, 2010

Gov’t to rate how lenders treat borrowers

By Alan Zibel

AP Real Estate Writer

WASHINGTON (AP) – The Treasury Department is planning to rate mortgage companies on how they treat customers as part of the Obama administration’s $75 billion foreclosure relief effort.

The new report will include measurements of how each company is handling borrowers and is expected by July, Treasury Secretary Timothy Geithner told Senate lawmakers on Thursday.

More than 100 companies participate in the program, which is designed to help up to 4 million borrowers avoid foreclosure.

Speaking in unusually strong language, Geithner said many companies “are not responding to the needs of responsible and increasingly desperate homeowners.”

If they don’t comply with the program’s rules, he said, “we will withhold incentives or demand their repayment.”

The program is designed to lower borrowers’ monthly payments by reducing mortgage rates to as low as 2 percent for five years and extending loan terms to as long as 40 years. Mortgage companies get taxpayer incentives to reduce borrowers’ monthly payments. Homeowners have to complete at least three months of payments to qualify for permanent loan modifications.

About 231,000 homeowners have completed this process so far. That’s about 20 percent of the 1.2 million borrowers who started the program over the past year.

Many experts say that’s inadequate. “Families are tragically being foreclosed on when foreclosure was preventable,” said Richard Neiman, New York’s top banking regulator and a member of the independent Congressional Oversight Panel. The panel was set up to oversee the government’s financial bailout programs.

And the number of dropouts is rising. About 155,000 homeowners didn’t complete the initial trial phase. Another 2,900 fell out even after their loans were modified. Many more are still in limbo.

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2 Responses to “Gov't to rate how lenders treat borrowers: AP”

  1. kimmatthewthomas says:

    This is a joke that is not funny.The obama administration has failed at this program completely.
    People that have made every payment are still denied and pushed coser to forecloure in which the pre-tender lenders or servicer’s plan is to take thier home.
    On the other side of the spectrum we need to appraise housing at todays value and then work the program at the reduced interest rate and terms.Otherwise what good is it serving the homeowner/renter in this case as they would have a home in which will take over adecade to come back even maybe longer.Sounds like a good deal for the banks and the government to get the heat off thier backs and start the cash flow and we will foreclose on them in five years even bettering our position. No thank you.

  2. dinsfla says:

    Talk about a biased “poll” – who will be asked? You? Me? The millions who have not even been processed for a trial loan mod??

    Not that I dare to even ask for one…because they are garbage!

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