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St Louis Mortgage Refinancing and Real Estate News –

News: Surprising Banking Disclosure Reveals Missing Loan Modification Paperwork that May Plunge Approximately 450,000 Homeowners Into Unexpected Foreclosure

The federal loan modification program also known as HAMP seemed to be lauded as the ‘financial savior’ for homeowners facing imminent foreclosure. Now for the unsettling news.

While fiduciary responsibility and small town honesty seem to be traits of a by-gone era, nothing could devastate this economy more than news hinting that hundreds of thousands of homeowners who are already making lower mortgage payments on a trial basis are now at risk of being kicked out of President Obama’s foreclosure-prevention program.

Before this financial snafu materialized, the original goal was to clear up this inordinate backlog of borrowers repressed in what was being labeled ‘temporary trial modifications.’

Under this federal plan,  a homeowner’s monthly payment is lowered to no more than 31% of pre-tax income.

Now it appears that some banking regulators are concerned about the real success of this program and may be rightfully so.

January 31, 2010 was to be the deadline for mortgage servicers to review all trial modifications that have been underway under the Home Affordable Modification Program (HAMP).

During this review period, servicers must determine whether borrowers have made all their payments and have handed in all the necessary paperwork.

Those who have not complied with these demands will be receiving letters giving them 30 days to comply.

Richard Neiman, superintendent of the New York State Banking Department made the comments that “about 450,000 homeowners currently have HAMP trial modifications and have demonstrated a willingness and ability to make timely payments for at least three months.”

He continues:  “Now, unfortunately and very alarmingly, these same homeowners face the prospect of foreclosure strictly on account of documentation issues.”

Although no federal program is going to perform perfectly especially in light of this ever growing mortgage fiasco,  the major stumbling block for the president’s foreclosure-prevention program has been this intial paperwork.

The million dollar question is, where does the blame lie?

Homeowners complain that their servicers continuously lose the documents they send in while financial institutions argue that borrowers have not been sending in their paperwork at all.

The Treasury Department said it would issue new guidelines concerning this process.

But what will these new guidelines be, when will they be released and of more importance, how will this financially help or hurt these homeowners who are currently stuck in mortgage limbo?

The obvious uncertainty lies in the plausible deluge of bankruptcies now facing these disillusioned homeowners and what course of action will be available to them.

The St. Louis Refinancing Group news team will continue to report on any changes that the Federal government releases involving the (HAMP) loan modification program.

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Tags: HAMP, loan modifications, st louis mortgage, st louis mortgage news, st louis mortgage refinancing, st louis refinance, st louis refinancing

This entry was posted on Monday, February 22nd, 2010 at 2:45 am and is filed under st louis mortgage news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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