Before the financial crisis and the “avalanche” of mortgage delinquencies that began in 2007, loan modifications to prevent foreclosures were case-by-case and disconnected efforts by mortgage servicers.
With little standardization, the foreclosure crisis overwhelmed servicers – as evident by the slow and troubled federal campaign, Home Affordable Modification Program, HAMP, which has been deemed ineffective on some levels by its official watchdog.
According to Ingrid Beckles, Freddie Mac’s senior vice president for Default Asset Management, servicers generally managed portfolios for multiple investors, meaning they had “to juggle the different loan modification do’s and don’ts each investor prescribes.”
Those investor-specific requirements “made it that much harder for servicing staffs to handle the avalanche of delinquencies that began in 2007.”
“Mortgage servicing will never be the same again,” Beckles writes in an article published today on Freddie Mac’s website. “The unprecedented volume of delinquent loans over the past three years has triggered within the industry a sweeping re-examination and re-engineering of its delinquency and loss mitigation management practices.”
Beckles said a transformation is taking place among servicers that should improve foreclosure mitigation.
She said this new cohesiveness will result in more borrowers being assisted before becoming delinquent, a new focus of HAMP’s attempt at combating ‘underwater” borrowers – those who owe more than the value of their homes.
“The individual servicer processes and investor requirements are beginning to converge into a standardized, industry-wide ‘waterfall’ of workout options, borrower eligibility and documentation requirements, greater transparency, and performance benchmarks,” Beckles writes.
She said daily workgroups are helping create a more streamlined campaign. These sessions are led by the servicing industry, the Obama Administration, and the financial community, she said, to explore “more solutions to address different areas impacted by the crises.
The bad thing about all of this e-note stuff, is the fact that it does not have basic law to support it. e-notes are worthless. The mortgages out in the U.S. are not valid, and soon most will begin to understand this. The banks,mortgage servicers, whoever, did this, destroyed the secured debts. This is truth. Read the laws to understand this.
Most do not, because they confuse the paper laws, with the electronic laws. There is a very big difference and when one learns this, they understand what I say.