March 24, 2011

Housing counselor: Mortgage servicers 'routinely and blatantly ignore HAMP guidelines'

Baltimore resident Michael F. Molloy's letter about a relative's struggles to get a loan modification prompted a lot of comments from readers and full-fledged commentary from a foreclosure-prevention counselor at St. Ambrose Housing Aid Center in Baltimore.

Counselor Bryan Sheldon argues: "It's not that there aren't programs available to assist most homeowners. The problem is that servicers and investors have no real need to follow program guidelines or assist borrowers in default."

The Obama administration's HAMP loan-modification program has been roundly criticized for the low number of homeowners assisted, but Sheldon contends that "many more may have been helped if mortgage servicers did not routinely and blatantly ignore HAMP guidelines."

Other links that might catch your interest:

The Center for Responsible Lending says it ran simulations of the foreclose-or-modify test used by servicers and determined that investors really do make out better with modifications, even though servicers -- who are supposed to be acting in investors' interests -- overwhelmingly opt to foreclose.

A Georgia jury awarded $21 million in damages to an Army staff sergeant who contended that a servicer hurt his credit by reporting him late on payments that it hadn't properly credited him for. The servicer, calling the award "grossly disproportionate to any damages ... sustained," promised to appeal. (Hat tip to the Consumerist for noticing this.)

And on a (slightly) more lighthearted note: Foreclosure buyers hire witches to cleanse properties of "bad vibes" (The Wall Street Journal)

Posted by Jamie Smith Hopkins at 6:00 AM | | Comments (7)
Categories: Links, links, links, The foreclosure mess
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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
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