Members collect payments on 90% of subprime loans
Friday, January 11, 2008
Inman News
Six mortgage loan servicers have joined the Bush administration's HOPE
NOW alliance since the group was
formed in October to contact borrowers in danger of defaulting on
their loans and help some refinance or modify the terms of their loans to
avoid foreclosure.
With the addition of Carrington Mortgage Services, IndyMac Bank, Litton
Loan Servicing, Merrill Lynch: Home Loan Services/Wilshire, Morgan
Stanley/Saxon, and Ocwen Loan Servicing, HOPE NOW membership now includes
more than 20 loan servicers, who collect payments on 90 percent of
subprime loans, the group
said this week.
In December, Treasury Secretary Henry Paulson
announced that HOPE NOW members had agreed on procedures for engaging
in loan refinancings and loan modifications that he said could help as
many as 1.2 million borrowers with adjustable-rate mortgages (ARMs).
Critics said the number of borrowers helped by the initiative could be
much lower -- the Center for Responsible Lending estimated that 145,000
families might see relief -- and have urged Congress to take other steps
to help borrowers, such as
allowing bankruptcy judges to rewrite loan terms.
To be eligible for streamlined refinancing or modification such as a
five-year interest-rate freeze, borrowers must have taken out an ARM loan
on an owner-occupied home between Jan. 1, 2005 and July 31, 2007, with an
initial interest-rate reset between Jan. 1, 2008 and July 31, 2010.
Only borrowers with FICO scores less than 660 and facing an increase in
monthly payments greater than 10 percent will be eligible for fast-track
loan modifications. Borrowers who don't meet the test may qualify for loan
modifications after individual reviews of their current income and debt
obligations.
HOPE NOW is
comprised of the American Bankers Association; American Financial Services
Association; American Securitization Forum; America's Community Bankers;
Assurant Inc.; Bank of America; CCCS Atlanta Inc.; Carrington Mortgage
Services; Citigroup Inc.; Consumer Bankers Association; Consumer Mortgage
Coalition; Countrywide Financial Corp.; EMC Mortgage Inc.; Fannie Mae; The
Financial Services Roundtable; First Horizon National Corp.; First
Tennessee Home Loans; Freddie Mac; GMAC ResCap; Homeownership Preservation
Foundation; Housing Partnership Network; The Housing Policy Council; HSBC
Finance; IndyMac Bank; JPMorgan Chase & Co; Litton Loan Servicing; Merrill
Lynch: Home Loan Services/Wilshire; Morgan Stanley/Saxon; Mortgage Bankers
Association; National City; NeighborWorks America; Ocwen Loan Servicing;
Option One Mortgage Corp.; PMI Mortgage Insurance Co.; Securities Industry
and Financial Markets Association; State Farm Insurance Cos.; SunTrust
Mortgage Inc.; Washington Mutual Inc.; and Wells Fargo & Co.
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Inman News
