Foreclosing on foreclosures

by admin ~ October 18th, 2008.


Iowans who have loans with Countrywide Financial Corp., the nation’s biggest subprime mortgage lender, will be the beneficiaries of a loan modification program starting on Dec. 1.  About 1,100 borrowers in the state facing foreclosure and loss of their homes are expected to get relief under a settlement reached by Attorney General Tom Miller and Countrywide, which was acquired by Bank of America on July 1.  Foreclosure prevention programs are essential to combat the economic enemies that bad for everybody, said Bob Brammer, spokesman for the Attorney General’s Office. What is good for the homeowner is also good for the street, and for the hometown, and for the economy. The plan was modeled after a program launched during the 1980s farm crisis, Brammer added.  The mediation saved an awful lot of farms at that time, he said.

The outcome of this program gave the attorney general the leverage to pursue a similar course of action and pressure companies to modify loans so homeowners can stay afloat and continue to make payments.  We are keeping pressure on companies to gear up for this, Brammer said.  Miller urges Iowans who are having trouble making mortgage payments to call the Iowa Mortgage Help Hotline at 877-622-4866, where trained mediators will assist them with the modification of loans.  Mediation is a win-win situation, Brammer said. We have a strong conviction that mediation is the way to go… Foreclosure is extremely expensive for the company and bad for the market.

Permanent relief to borrowers could equal about $8 billion nationwide, with about $11 million headed for Iowa, Countrywide estimated.  This is what we have been looking for, Miller said. This agreement provides for the kind of systematic and streamlined loan modification program that is critical right now.  Between one-fourth and one-half of Countrywide’s subprime loans in Iowa are delinquent, depending on the type of loan.

A report issued last week by the State Foreclosure Prevention Working Group led by Miller concluded that industry measures to keep homeowners out of foreclosure had slipped since the Working Groups previous report in April, and that nearly eight out of 10 seriously delinquent homeowners are not on track for any loss mitigation outcome.  The mortgage financing industry’s failure to develop systematic approaches to prevent foreclosures has only spurred declines in home values and further increased expected losses on mortgage loan portfolios, the report concluded.  Article written by Anelia Dimitrova.

Category: Foreclosure news | Tags: ,

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