wjctmortgagecrisis

Recent Article in Washington Post about Benefits of Housing Counseling

Troubled homeowners who receive housing counseling are 60 percent more likely to avoid foreclosure and have their mortgage payments lowered significantly than borrowers who navigate the process themselves, according to a study to be released Wednesday.

For the rest of the article go to: http://www.washingtonpost.com/wp-dyn/content/article/2009/11/18/AR2009111800010.html

Test Used to Analyze Loan Modification Requests Flawed (and Secret)

Many people who are behind in their mortgage payments try to contact the company collecting or “servicing” their loan to see if they qualify for a loan modification.   These consumers find themselves at the mercy of overworked employees and a computerized loan modification program which many claim is flawed.  A test that is often utilized by the servicers is often referred to as the NPV test.  This computer program software was designed to evaluate factors such as the value of your property, your ability to pay your  mortgage debt and the cost of foreclosure.  Anecdotal information provides that it is common for the servicer to continuously lose the paperwork submitted by consumers before applying the test, failing to apply the test at all before denying the modification or fail to accurately input the required information.

In an article appearing in Pro Publica at

the author points out this test may even provide a negative result for consumers most likely to succeed with a modified loan.  “A “huge driver” of the test, according to (Diane) Thompson, is the relationship between the current value of the home and the unpaid portion of the loan. If a house is worth more than the remaining mortgage balance, “there’s a benefit to the investor from foreclosing. It will recover the entire value of the loan if it forecloses, not if it modifies,” she said.”

In other words, if you have equity in your home, the owner of your loan may make more money by foreclosing on your home rather than allowing you to modify the loan.  This is not the purpose of the loan modification programs required by Congress and other governmental agencies.

Unfortunately, the test and the results are secret and the servicers are overworked and  vague about why your request for a modification is denied.  You may not get a fair chance when seeking modification.  If  you think you have been wrongfully denied a modification or you are only given the option to accept a modification you can not afford you should seek legal counsel to assist you in trying to navigate the process with an advocate on  your side.

You can read the transcript of a Morning Edition report on NPR describing the trials of  homeowners who were not given a fair opportunity for loan modification at

http://www.npr.org/templates/story/story.php?storyId=112660935&sc=emaf

Perspectives: The Faces of Foreclosure

WJCT’s Karen Feagins updated radio documentary examines the impact of foreclosures on the larger community. Jacksonville, FL.
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Q/A: Foreclosure Process

Q/A: Receiving a Late Notice

Q/A: Falling Behind on My Mortgage

Q/A:Options for Keeping My Home

States Move To Help Tenants Stung By Foreclosure

Morning Edition, May 19, 2009 · With foreclosures at record highs, a growing number of tenants are finding themselves out on the street — even though they’ve paid the rent long after the landlord defaulted on the mortgage. Now, efforts are under way to protect tenants, whose first inkling of a problem may come when they get an eviction notice.
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Frontline: What Obama Inherited

All of the federal government’s efforts to stem the tide of the financial meltdown have added hundreds of billions of dollars to an already staggering national debt, a sum that is expected to double over the next 10 years to more than $23 trillion. In Ten Trillion and Counting, FRONTLINE traces the politics behind this mounting debt and investigates what some say is a looming crisis that makes the current financial situation pale in comparison.

Frontline: First Tremors (video)

On Thursday, Sept. 18, 2008, the astonished leadership of the U.S. Congress was told in a private session by the chairman of the Federal Reserve that the American economy was in grave danger of a complete meltdown within a matter of days. “There was literally a pause in that room where the oxygen left,” says Sen. Christopher Dodd (D-Conn.).