Mortgage plan gives people runaround
TEXT OF STORY
Steve Chiotakis: We’re just about an hour away from the latest Case-Shiller Home Price Report, and economists expect property values have dropped around 18 percent in major metro areas from a year earlier. It doesn’t take a housing expert to deduce that declining home values and widespread job losses have, in part, led to a big rise in foreclosures.
Now, the Obama administration has been trying to do something about the mess. But a loan modification program to keep people in their homes hasn’t had the results many were hoping for. Mortgage servicers will be at the White House today to explain why. Marketplace’s Mitchell Hartman reports.
Mitchell Hartman: Mortgage servicers — companies like Wells Fargo, Bank of America, and GMAC — can get $1,000 from the government for each loan that they modify. The idea is to help cash-strapped borrowers stay in their homes.
Stuart Brown of Valley Mortgage in Newburg, Ore., tries to help his clients negotiate with those big lenders:
Stuart Brown: They can negotiate for a reduction in the principal balance, for a temporary or a permanent reduction in the interest rate, or a reduced payment with deferred interest so they can get back on their feet.
But Brown says many people have gotten the runaround.
That’s also the charge from critics in Congress and housing advocates. They accuse mortgage servicers of delays getting the program off the ground. And, of misinformation: like telling homeowners they have to default before they can get a loan modification, and charging inappropriate up-front fees.
I’m Mitchell Hartman for Markeptlace.
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