More than 140,000 behind on mortgage payments
Here's the mortgage mess, Maryland-style, in a snapshot -- a chart that shows the growth in the number of homes whose owners are at least one payment behind.
It's been trending down a bit this year, good news if that continues. The 3 percent drop in the summer was the first year-over-year decrease since 2006. But I'm not hearing a lot of optimism out there about the possibility of big improvement soon, given the state of unemployment.
(These figures, in case you're wondering, are drawn from a Mortgage Bankers Association survey that covers nearly 90 percent of loans outstanding. The statistics aren't grossed up, meaning that the tally above is most but not all delinquencies.)
From the beginning, some firms have profited off the crisis by taking homeowners' money to negotiate for loan modifications but doing little or nothing. The Federal Trade Commission issued new rules last week banning fees until a loan agreement is hammered out that the homeowner finds acceptable. It also announced that it had convinced a federal court to temporarily halt operations at a Halethorpe mortgage-relief company that the agency said was taking advantage of clients.
A mortgage investors' group, meanwhile, contends that mortgage servicers -- the organizations receiving modification requests -- are themselves profiting when they choose to foreclose.
Mortgage 101 for those whose heads are spinning: Mortgage investors own the loans. Mortgage servicers oversee those loans for the investors, collecting the monthly payments and dealing with delinquency.
Servicers responding to public complaints about high levels of foreclosures vs. modifications have frequently said, "Don't blame us, we're just following the investors' guidelines." But the Association of Mortgage Investors, which says it represents private investors, pension funds and endowments, issued an "oh yeah?" statement recently that says homeowners are being "victimized" by servicers:Thoughts?It should be noted that the major servicers harm homeowners while benefiting themselves in the following ways:
Servicing Fees: Servicers generate significant servicing and late fees throughout the delinquency and foreclosure process. They can be reluctant to find quick sustainable solutions for homeowners. This is clearly evidenced by long call waiting times and high call abandon rates that homeowners experience when calling servicers.
Profits from Affiliated Companies: Servicers generate profits through affiliated companies during the process of repurchasing, insuring and liquidating homes from distressed homeowners. Servicers can be reluctant to aggressively pursue short sales and other viable options to foreclosure due to these above-market fees generated by affiliated companies.
Second Liens: Servicers own the second liens behind the first liens they service for investors. Their interest in the second liens can cause them to advise homeowners to defer payments on the primary mortgage while aggressively collecting on second liens to avoid losses to their own portfolio and balance sheet.
Categories: The foreclosure mess
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Comments
It’s ludicrous to call someone with a mortgage a homeowner. You’re not the owner until you make the last payment. There are on homeowners with mortgage problems, if you actually owned your home you would not have a mortgage. It’s impossible for an owner to be in foreclosure. This is not a matter of semantics it is a matter of truth and liberty. When you make an owner into someone who has to make payments to keep what they have you make liberty into slavery. Failure to make a distinction between what should be call "investorship" and what is ownership creates a society that will never allow its people to acquire the freedom they deserve. "Nothing is ours, which another may deprive us of" Tomas Jefferson
Although it verges on insanity to call someone with a mortgage a homeowner, the sad fact is because of property tax no one can truly own their home. The American Dream of homeownership is the greatest lie ever told. The owner is the one that can acquire possession of the property when the debtor fails to make payments. It’s obvious the state actually retains ownership of your home with property tax. Your home is their cash cow. I find it extremely offensive that the term homeowner is abused the way it is.
No rational person on the planet would call an owner some one who has to make payments or lose possession of their property. This is absurd and a complete contradiction of ownership yet every authority imaginable continues to lie about it and call people homeowners. No one will argue with you if you insist on the truth, they can’t for they have no logical recourse. Regardless the next day after you get your county commissioner, realtor, news paper reporter or state representative, etc. to admit that you don’t really own your home they will be calling people homeowners as if your conversation never existed. For some 40 years I’ve been calling people on this issue and have yet to get anyone in the establishment to change their tune. Why! Why must they lie about it?
Posted by: tomas | November 22, 2010 4:25 PM
Trouble is, tomas, that everything people buy on credit is considered in today's parlance something they "own" -- cars, engagement rings, you name it. Is that good for society? Probably not. But I'm not going to invent a new word for "homeowner" when that's the one 98 percent of society agrees on. ("Borrower" is a useful word, but it's not as specific as homeowner. It doesn't say what, exactly, you're borrowing money for.)
Posted by: Jamie Smith Hopkins | November 22, 2010 11:07 PM
"Although increasing numbers of courts are continuing to reject improper and fraudulent foreclosures, the Congressional Foreclosure Panel examination of mortgage services and foreclosure practices did not include foreclosure lawyers.
Lawyers are officers of the court; knowledge of applicable laws and civil procedure is not required from mortgage lenders. In states that require judicial foreclosures, lawyers are the ones who file lawsuits to seize and sell property; and lawyers are responsible for filing and recording foreclosure property deeds.
An investigation could prove helpful to sorting out whether improper and illegal foreclosure proceedings are linked to any self-dealing conduct disadvantaging lenders, investors, homeowners, and city governments. . .”
Request for fraudulent foreclosure investigation http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#
Posted by: Barbara Ann Jackson | November 23, 2010 3:00 AM
Jamie Smith Hopkins... Thank you for explaining to me WHY you will continue to lie about homeownership.
However, I know of no one whom considers they own a car until they have paid it off and have the title. With your residence you can never pay it off because of property tax. You are placed in endless debt and the government has the right to murder you and your family by throwing them into a hostile environment if you can’t pay for their jobs and retirement benefits.
Don’t you think we should have at least the option of picking cotton (say for a month) instead of using money to pay our property tax so that we could protect our families from being made homeless? Medieval surf could pay with chickens, some other farm product or labor why must us modern day surfs be limited to paying with cash.
As far as new word for homeowner goes we could call some with a mortgage a homeower and some who has paid their mortgage a homesteader, just to name a few.
Posted by: tomas | November 23, 2010 6:47 AM
I like the debate here on what to call the "homeowner" vs. "homeowner witha mortgage"
How bout we just call anyone with a mortgage "screwed"?
In Arizona, a divorce doesn't get you out of a mortgage obligation.
Posted by: Arizona Divorce | November 23, 2010 3:38 PM
Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#
Posted by: lawgrace | November 24, 2010 11:17 AM
"In Arizona, a divorce doesn't get you out of a mortgage obligation."
Arizona- um why should it? It doesnt in any other state either nor does it for car loans or credit cards. YOU borrowed the money with YOUR spouse. Why should the bank relieve you of your obligation just because of issues in your personal life?
Posted by: elweedz | November 24, 2010 4:21 PM
elweedz -
don't be so narrow-minded. It is just guerilla marketing.
Posted by: Dana | November 24, 2010 8:14 PM