Another Note on Yesterday’s Treasury Report
As a quick addition to Mary’s thoughts on yesterday’s Treasury Department report confirming the reluctance of mortgage servicers to modify loans through the administration’s Making Home Affordable program, it’s worth noting that some of the poorest-performing banks are the same institutions that appeared before Congress just a few weeks ago with declarations that they were cooperating wonderfully.
Bank of America, for example, has modified loans for just 4 percent of borrowers (or 27,985 homeowners) who have missed at least two mortgage payments, the Treasury report reveals. Yet on July 16, BoA’s Default Management Executive Allen Jones told the Senate Banking Committee that the company was bending over backward to get people enrolled. “In the first six months of this year, modification offers have been accepted or rate relief has been provided for more than 150,000 customers,” Jones said in his written testimony.
Meanwhile, Mary Coffin, head of Wells Fargo’s mortgage servicing division, testified that the company has helped nearly 1 million customers this year with refinancings and modifications. Yet Treasury records show that the banking giant has modified just 6 percent (20,219) of its deliquent borrowers.
It’s a good lesson for the federal officials overseeing the MHA program. Yes, the banks are refinancing and modifying mortgage loans, but they’re not doing it for the families most in need of the help. It’s not quite what the program was designed to do.