From CNNMoney.com:
It’s looking like homeowners who received loan modifications last year are already falling behind according to a federal report released Wednesday. I think this is an absolute tragedy—this economy continues to wreak havoc on the lives of many! Here’s what the article had to say:
Modifications made under President Obama's foreclosure prevention program, known as HAMP, had lower re-default rates than non-government modifications. Some 7.7% of HAMP modifications were delinquent after three months, compared with 11.3% of all modifications.
Is this an all-across-the-board problem or were there some loan modifications that fared better? HAMP had lower default rates than other non-government modifications. Under the HAMP program borrows receive incentives for making timely mortgage payments and they have their monthly payments reduced to no more than 31% of their pre-tax income.
Many experts say that servicers must do more principal reduction if they want to halt the foreclosure tidal wave. Homeowners are more likely to walk away if they owe much more than the home is worth, a situation about 1 in 4 borrowers find themselves in.
What are your thoughts on loan modifications or government programs like HAMP? Do you agree with borrowers getting incentives for paying their mortgages on time?
Showing posts with label borrowing. Show all posts
Showing posts with label borrowing. Show all posts
Wednesday, June 23, 2010
Tuesday, December 01, 2009
Treasury Tightens Screws on Mortgage Firms
On Monday, the Obama administration announced a few steps they are planning to take to pressure lending institutions. The Federal government could no longer ignore complains from taxpayers who still cannot find the long-term loan assistance they need. CNN Money.com published a great article explaining how the government plans to focus on helping borrowers get into permanent modifications.
Government swat teams will go to the institutions to see what the holdup is and banks will have to submit progress reports twice a day during December.
"Now it's up to the banks to do their part to covert borrowers to permanent modifications," said Michael Barr, an assistant Treasury secretary. "Servicers to date have not done a good enough job."
Only a tiny percentage of troubled homeowners have received permanent modifications, raising concerns about the effectiveness of the $75 billion effort. Treasury officials will release the first comprehensive look at the conversions next week.
Top loan servicers will be required to report the status of each modification and their plan to reach a decision. Also, these servicers must say how they will communicate decisions to borrowers.
Tuesday, November 24, 2009
Can the Postal Service be Saved?
Over the weekend, the United States Postal Service announced that it had lost $3.8 billion over the past fiscal year, which ended on September 30th. Their report claimed that they also delivered about 26 billion less pieces through the mail then they had the prior year, which translates to a nearly 13% drop.
The Postal Service, as it is quick to point out, is legally prohibited from taking tax dollars. But in order to stay afloat, the agency has been actively borrowing from the U.S. Treasury: At last count, according to Postal Service spokeswoman Yvonne Yoerger, it owes the government $10.2 billion.
Federal law dictates that the Postal Service can borrow up to $3 billion per year - but the debt cannot grow beyond $15 billion. That means that while the agency, which had revenues of $68.1 billion last year, could potentially borrow another $3 billion in 2010, it will soon no longer be able to legally borrow billions from the government.
Meanwhile, the Postal Service is estimating that without significant changes, it will lose another $7.8 billion in the coming year - and deliver another 11 billion fewer pieces of mail.
Which raises the question: Could the Postal Service be doomed?
"I don't think the Postal Service is in danger of going away totally," said Yoerger, the Postal Service spokeswoman. "But our current business model needs to be reviewed and revised to come up with a sustainable model so that we can get back to profitability while still continuing to meet our mission of serving all of the country with affordable, universal Postal Service."
Thursday, November 12, 2009
U.S. Needs to Borrow Less than Expected: Geithner
From MarketWatch.com:
The U.S. government's borrowing needs will likely be much less than originally expected, as bank have been repaying funds received during the crisis, Treasury Secretary Timothy Geithner told news channel CNBC.
"We are likely to have to borrow substantially less than we initially anticipated to help repair the damage to our financial system," Geithner said during an interview in Singapore, where he attended a meeting of finance ministers from Asia-Pacific countries.
Geithner also repeated his stance that a strong dollar is in the U.S. interest.
The dollar rose on Thursday, after slumping to 15-month lows earlier this week on expectations that the Federal Reserve will not raise interest rates any time soon.
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