Feldman Law Center - One Million Foreclosures - Feldman Law Center

According to The Center for Responsible Lending (CRL) more the 1 million foreclosures have been filed in the U.S. so far this year. It’s a staggering number that shows no sign of slowing despite government efforts to encourage and incentivize lenders to modify loans. The CRL, a nonprofit research and lobbying group that pushes for aggressive policies to help troubled homeowners is estimating that there are 6,500 new foreclosures filed every day. At that pace the center calculates that the number of foreclosures through the end of the year will total 2.4 million based off of figures from the Mortgage Bankers Association that are adjusted to reflect the entire mortgage market.
While still very early in the game it’s apparent that the Obama Administration’s Homeowner Affordability and Stability Plan (HASP) is, at best, off to a slow start. Government officials seem to be trying to put on a happy face with recent comments to the media regarding the number of loan modifications being done, using trial modification statistics to buttress their case but even there the numbers are unimpressive. For example, Treasury department officials recently estimated that “55,000 homeowners had been helped so far by the Obama administration’s loan modification plans, including some 15,000 borrowers who were in trial modifications with Chase Home Mortgage, and 3,000 who were in a trial with Wells Fargo.”
These numbers are, to be frank, a joke in light of the million foreclosures that have occurred during the first five months of the year. Making it worse, trial modifications are just what they sound like; the bank lowers a borrower’s monthly payment for a period of time while they determine whether a real loan modification can be done. During the trial, should the borrower be even one day late with their monthly payment they are jettisoned from the trial as quickly as kilos off a cigarette boat under pursuit in the Caribbean. Additionally, these are a couple of the biggest banks in the country so 15,000 at Chase and 3, 000 at Wells in trials is a drop in the bucket.
Other statements from the Treasury are not inspiring much confidence either. Take a look at the progression of statements starting three weeks ago:
* Three Weeks Ago - Treasury department officials estimated that more than 55,000 homeowners had been helped so far by the Obama administration’s loan modification plans. Inadequate, but at least it’s a start.
* Two Weeks Ago – Treasury spokeswoman, Jenni Engebretsen estimates that the total number of completed loan modifications is less than 55,000 but more than 10,000. Literally, a gap so big you could drive a truck through it. Also, what happened to the “over 55,000 loan modifications”?
* This Week – When asked again this week how many loan modifications had been completed to date, Engebretsen declined to give a number stating “… that the Treasury was working with mortgage companies to fine tune reporting systems.” Does that mean the number is now fewer than 10,000? If the CRL is correct, there will be that many foreclosures in the next day and a half.
The New York Times recently noted that the latest figures show some 5.4 million Americans either delinquent on their mortgages or in some state of foreclosure so it’s very realistic to expect another million foreclosures by time this coming fall. The rate of foreclosures and ineffective government programs trying to deal with make it look like this wave has some time before it plays out.