Help hard to get for troubled US home owners
DETROIT — As the US housing crisis deepens, major lenders say they will help borrowers avoid foreclosure, but nonprofit groups and others say their actions are not living up to their promises.
“Some lenders are willing and able to work out loan modifications,” said Juanita Bryant, a loss mitigation officer at Michigan Neighborhood Partnership, which covers one of the worst-hit states in the country. “Those lenders are in the minority.”
Nonprofit groups around the country say many lenders either have no system for dealing with stricken borrowers, or they are not interested in cutting deals.
“Our experience on the ground does not reflect lenders’ claims they’re helping people,” said Robert Pulster, executive director of ESAC, a Boston-based group that helps people with mortgage trouble. “Occasionally we have a breakthrough with a lender, but they need to do much more.”
Or, lenders are not telling the truth when they claim to be helping people and are simply engaged in a public relations exercise. “They’re lying bastards,” said Mark Seifert, executive director of East Side Organizing Project (ESOP) in Cleveland, on a tour of the city’s ravaged Slavic Village district. On some blocks here almost every last home is boarded up.
Some nonprofit groups say that just as lenders packaged and sold their mortgages to investors around the world during the property boom, the solution lies in persuading those investors to approve more loan modifications.
Gabe del Rio, vice president of lending at Community Housing Works in San Diego, said the problem is investors outside the United States bought the mortgages, so lenders no longer own them.
“Lenders say they are modifying loans, but they don’t have authority from investors,” he said. “We must get the message across to these investors that more loans must be changed.”
- Source: Reuters, Feb. 27, 2008 — Summarized for you by Credit Card Report.
