Acorn Calls for More Loan Modifications

Posted by: Chris Palmeri on December 30, 2008

The activist group ACORN got a bad rap during the recent presidential campaign when John McCain accused them of using paid solicitors to sign up bogus voters. Barack Obama had to distance himself from the group, which has been a big advocate for low income homeowners.

ACORN has come out slugging against Hope Now, an alliance between banks, mortgage servicers and other consumer groups.

Says ACORN:

“HOPE NOW’s own numbers show that far less than a third of their nearly 3 million foreclosures prevented in 2008 actually involved modifications to the underlying mortgage, rather than weak repayment plans that do nothing to address the structural unaffordability of so many loans. The HOPE NOW estimate of 950,000 mortgage modifications in 2008 is a pathetic failure when stacked up next to the 2 million Americans who lost their homes. We don’t know how many of these modifications actually resulted in reduced monthly payments that are affordable to homeowners, the driving reason behind high re-default rates. Instead of more excuses, we need solutions that will stop all these unnecessary foreclosures and fix our economy where it is hurting most.”

The group also notes that Credit Suisse recently released revised projections that foresee 8 million foreclosures in the next four years, up from a prediction of 6.5 million in April. “The industry’s current bad practices are essentially responsible for doubling the foreclosure crisis and preventing the broad economic recovery we need. The mortgage industry doesn’t need any more PR, it needs systemic change.”

ACORN is calling on mortgage servicers to enact a 90-day moratorium on foreclosures, taking that time to implement the FDIC’s modification protocols that were successful at avoiding unnecessary foreclosures and re-defaults at Indymac. This change alone would stem the glut of Real Estate Owned properties that are dragging down housing prices and would help jumpstart the economic recovery. The federal government must use every stick and carrot at its disposal to help Americans save their homes, including enacting the Bair proposal to use TARP funds to facilitate 2.2 million mortgage modifications, lifting the ban on judicial modifications, and demanding that banks receiving TARP funds start modifying loans per the FDIC protocols.”

Reader Comments

beachdude

December 30, 2008 1:17 PM

Mortgage Loan Modification is a process whereby a home owner's mortgage is modified and both the lender and homeowner are bound by the new terms of the new mortgage.

The most common loan modifications are listed below:

• lowering the mortgage interest rate
• reducing the mortgage principal balance
• fixing adjustable interest rates within the mortgage
• increasing the loan term throughout the mortgage
• forgiveness of payment defaults and fees
• or any combination of the above

Check out this Public site at http://LoanModificationMortgage.org

PaulMolinaroEsq

December 31, 2008 6:50 PM

Words from an Opinionated California Lawyer

In California, the Department of Real Estate website (www.dre.ca.gov) lists the companies that have DRE "permission" to modify loans... add to this list any licensed California attorney, and that is where you should begin your due diligence when you seek help in California. Other states probably have similar laws, so check with your own state DRE.

My law firm has been getting more and more calls recently from homeowners that were victims of predatory lenders who put them into an unaffordable loan and now fell into the hands of those same people who sold the toxic loans but profess to be saviors... DON’T BE A VICTIM TWICE!

Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call “home.” These scammers are popping up like dandelions on a freshly mowed lawn. They advertise on the Internet, freeway billboards, radio, television, and print media everywhere. Make no mistake, in many cases, these are the exact same loan officers and mortgage brokers who fleeced homeowners the first time around. After losing their jobs with the crash of the mortgage industry, they have found a new way to make ill-gotten profits from hard-working homeowners through loan modifications.

In California, with very few exceptions (and attorneys are one exception), it is against the law for anyone to take money up front for helping a homeowner who is in default. Don’t trust a company that begins its relationship with you by breaking the law.

Of course, this is one lawyer's biased opinion, but one based on many distressing calls to my office every day. And, yes, my firm does take cases against loan modification companies who have violated laws. This field is quickly becoming one of the fastest growing sections for our mortgage law firm.

- Paul J. Molinaro, Esq.

kwazimota

January 1, 2009 11:30 PM

take all your acorn bunch.your clinton citi bank buddys.barney frank dod peklosi just every body in dc and new york and chicago. put them in a tree shreeder

alicia hadfield

April 23, 2009 5:13 PM

i need mortage modification. i can no longer afford my mortgage payments

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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