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April 13th, 2011

Homeowners: Do you trust your mortgage servicer?

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Homeowners: Do you trust that your mortgage servicer truly has your best interest in mind?  How confident are you that if or when you enter into financial trouble, your mortgage servicer will be there for you, willing and able to help you remain in your home?

Foreclosure Exit SignWith all the negativity surrounding the mortgage servicing industry these days, it stands to reason that a large percentage of borrowers wouldn’t place too much trust in their servicer to help them through a rough financial patch. The amount of confidence you have in your servicer’s willingness to help you stay in your home could even influence your opinion on whether or not the home affordable modification program (HAMP) should end before its slated expiration date (December 2012) or even be extended beyond that.

-Readers: Should Congress consider extending HAMP past December 2012? Leave us a comment below-

Laurie Anne Maggiano, director of policy in the Treasury Department’s Office of Homeownership Preservation, said recently that while she knows HAMP got off to a slow start, ending it too soon could put an end to avoidable foreclosures.

Since HAMP’s numbers are so dismal (when compared to their original projections), many proponents of the program, including Maggiano, have resorted to touting HAMP’s success as a template that has helped to shape private-market modifications (which far outnumber successful HAMP mods).

If you follow this blog, you know that I’m not buying that praise one bit – it’s a self-defeating argument.

Here’s why:

Maggiano cautions that if HAMP were to end, it would leave all remaining modification opportunities in the hands of servicers — the same servicers that are the focus of wide-spread industry criticism.

From National Mortgage News (”HAMP Architect Makes Case for Keeping Program,” by Austin Kilgore):

Ending MHA would “entrust all efforts to stop foreclosure in the hands of servicers,” Maggiano said, noting those same servicers are being sued by all 50 state attorneys general and criticized politically and in the press for their actions in the housing crisis

But Maggiano said MHA is responsible for pushing the mortgage industry toward other private-label modification efforts, which have resulted in an additional 2 million modifications.

So which one is it? Are servicers helping or hindering borrowers seeking modified mortgages? How can the Treasury criticize and then praise private efforts all at once?

Homeowners: Does your trust for your mortgage servicer increase or decrease depending on the presence of HAMP? Are we better off with HAMP or without it?

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One Response to “Homeowners: Do you trust your mortgage servicer?”

  1. HAMP is there Hope or is it Hopeless? Says: June 21st, 2012 at 3:30 pm

    [...] Homeowners: Do you trust your mortgage servicer? (hsh.com) [...]

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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