Friday, June 10, 2011

Tried to get a loan mod lately? Was it difficult? You weren't alone; read this

I know business news is boring, but this article from today's L.A. Times is a must read.  The headline says it all: "3 banks lose loan mod incentives" from the federal government.  Those three are BofA, JPMorgan Chase and Wells Fargo.  The government says these banks need to improve their loan modification practices to qualify for the money.  I'll say. Several other loan servicers were judged to be poor performers too: Ocwen, American Home Mortgage Servicing, Citigroup, GMAC, Litton, OneWest Bank and Select Portfolio.

Some short sale experts I've spoken with believe that the small amount of money that the government is offering these banks is a joke, and this article quotes others who say the same.  And the U.S. House of Representatives recently voted to end the program. To me, whether or not the banks get money for modifying loans, it's bizarre that banks would force their own customers into foreclosure instead of knocking points of their interest rates.  How does that scenario make sense?

1 comment:

  1. Anonymous8:25 AM

    It does not make sense, but fits right into the same logic of letting people not making any mortgage payments for 2-5 yrs remain in their homes. The financial and economic blogs/news is filled with those tales.

    Strange times, indeed, but there is only so long the games can go on or we will become Japan (20 yrs stagnant home prices).