Homeowner Toolbox Estimates 80 Percent of Loan Mods Are Denied

Started by 30yrs_RE_20_in_REO

over 16 years ago

Posts: 9877

Member since: Mar 2009

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This could easily be absolute BS snake oil salesmanship, but I thought it was interesting anyway: Homeowner Toolbox Estimates 80 Percent of Loan Mods Are Denied Carrie Bay | 07.01.09 Irvine, California-based Homeowner Toolbox Inc. is helping homeowners wade through the complexities of the loan modification process and showing them how to avoid the roadblocks that prevent consumers from getting a... [more]

This could easily be absolute BS snake oil salesmanship, but I thought it was interesting anyway: Homeowner Toolbox Estimates 80 Percent of Loan Mods Are Denied Carrie Bay | 07.01.09 Irvine, California-based Homeowner Toolbox Inc. is helping homeowners wade through the complexities of the loan modification process and showing them how to avoid the roadblocks that prevent consumers from getting a modification. Based on its work with borrowers who have already been told %u201Cno%u201D by their servicers, Homeowner Toolbox estimates 80 percent of loan mod applications get turned down. The company says most homeowners are unaware that they can be denied a workout for being off by just $10 from, what the company calls, the lender%u2019s unique %u201Csweet spot.%u201D Andy Firoved, CEO of Homeowner Toolbox, explained, %u201CCurrently only 20 percent of loan modifications are being approved. Consumers often feel they have to exaggerate their financial hardship or be delinquent on payments in order to qualify for a modification. This is absolutely false, and we have the successful modifications to prove it.%u201D Homeowner Toolbox has introduced a proprietary tool called the Probability Meter to help facilitate successful modifications. The company says the meter accurately predicts the likelihood of a positive lender modification, moving up or down in real-time depending on the data the borrower enters into an online Financial Worksheet, a central requirement of any loan modification package. The company says its Probability Meter is lender-specific and helps a homeowner zero-in on their lender's target disposable income amount. According to Homeowner Toolbox, the tool shows that it is possible for a homeowner to obtain a modification even without being delinquent %u2013 a point the company says is a widespread misconception. Homeowner Toolbox's financial evaluation is available to homeowners at a fraction of the price of other modification solutions or consultants %u2013 only $99. The homeowner is also provided with a print-ready, submission-ready package that can be sent directly to their lender to help speed the process and ensure documentation accuracy. [less]

Response by 30yrs_RE_20_in_REO

over 16 years ago

Posts: 9877

Member since: Mar 2009

Then at the same time you have this:

Bank Regulators Report Mod Increase
Carrie Bay | 07.01.09

Loan modifications made by mortgage lenders and servicers spiked during the first quarter of the year, according to a report issued Tuesday by the Office of the Comptroller of the Currency (OCC) and the Office of Thrift Supervision (OTS). The regulators said the trend toward more sustainable modifications with lower monthly payments continued, however delinquencies and foreclosures on first-lien mortgages also climbed.

The agencies' report, based on data from loan servicing companies that manage 64 percent of all first-lien U.S. mortgages, shows that the number of loan modifications made by these institutions significantly increased during the first three months of the year. Servicers implemented 185,156 new loan modifications – up 55 percent from the previous quarter and 172 percent from the first quarter of 2008.

The proportion of payment-reducing modifications also increased. The regulators said servicers were focused on achieving more sustainable mortgages, with more than half of the modifications in the first quarter resulting in lower monthly principal and interest payments. Modifications that reduced monthly payments by 20 percent or more jumped 19 percent from the previous quarter, to 29 percent of all modifications. By contrast, actions that resulted in increased payments constituted only 19 percent of modifications, a drop of 25 percent from the prior three-month period.

The OCC and OTS noted that modifications which reduce payments have lower delinquency rates over time. The regulators' report showed that although delinquencies on modified loans increased each month following modification, delinquency rates were considerably lower for mortgages in which monthly payments were reduced. Six months after modification, only 24 percent of the mortgages that had monthly payments reduced by 20 percent or more were 60 or more days past due, compared with 54 percent of mortgages with monthly payments left unchanged, and 50 percent with higher monthly payments.

The regulators found that seriously delinquent mortgages also rose during the first quarter. Mortgages 60 or more days past due or involving delinquent bankrupt borrowers increased as economic pressures continued to take their toll on homeowners. Prime mortgages, which represented two-thirds of all mortgages in the portfolio, had the highest percentage increase in serious delinquencies, climbing by more than 20 percent from the prior quarter to 2.9 percent of all prime mortgages.

Foreclosures in process increased as well as moratoriums expired, totaling 844,389 during Q1, or about 2.5 percent of all serviced loans. This increase represented a 22 percent jump from the previous quarter and a 73 percent rise from the first quarter of 2008.

With servicers obvious push to provide substantive assistance to struggling homeowners, the regulators' report showed that servicers most often change multiple terms when modifying mortgages to achieve sustainable modifications. Capitalization of delinquent interest, fees, and advances, combined with interest rate reductions and extended maturities, were th predominant combinations during the first quarter. Interest rate and payment freezes, principal reductions, and principal deferrals were less prevalent.

Data also showed a continuing emphasis on preventing avoidable foreclosures to keep families in homes and mitigate losses, as servicers continued to implement more home retention actions (loan modifications and payment plans) than home forfeiture actions (foreclosures, short sales, and deed-in-lieu-of-foreclosure actions). Prime borrowers received about twice as many home retention actions as home forfeiture actions, while subprime borrowers received more than seven times as many.

Comptroller of the Currency John C. Dugan commented, “While I’m very concerned about the rise in delinquent mortgages and foreclosure actions, the shift in emphasis by servicers to more sustainable, payment-reducing modifications is a positive step that should show significant benefits in the coming months.”

The OCC-OTS report covers the performance of 34 million loans totaling more than $6 trillion in principal balances from the beginning of 2008 through the end of the first quarter of 2009. The agencies said that the impact of the increase in modifications, particularly those with reduced monthly payments, will become evident in future reports, adding that the Q1 data does not reflect modifications made under the administration’s Making Home Affordable program, which was announced in March and began after the reporting period.

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Response by 30yrs_RE_20_in_REO

over 16 years ago

Posts: 9877

Member since: Mar 2009

Sorry, forgot the attribution:

http://www.dsnews.com/

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