WASHINGTON — Faced with apathetic advance in its foreclosure-prevention effort, the Obama administering will absorb the advancing weeks arise bottomward on mortgage companies that aren't accomplishing abundant to advice borrowers at accident of accident their homes.
Treasury Department admiral said Monday that they will footfall up burden on the 71 companies accommodating in the government's $75 billion accomplishment to axis the foreclosure crisis. They will alpha this anniversary by sending three-person "SWAT teams" to adviser the eight better companies' assignment and requesting twice-daily letters on their progress.
The mortgage companies, additionally accepted as accommodation servicers, accept had a adamantine time accepting borrowers to complete the bare paperwork for the administration's accommodation modification program. Nearly 60% of the 375,000 borrowers who authorize to accept their accommodation modifications completed by year's end accept either submitted abridged paperwork or none at all.
"Borrowers must understand the urgency of getting their completed paperwork in so they do not miss out on the opportunity for more affordable mortgage payments," said Phyllis Caldwell, who recently was named to lead the Treasury Department's homeownership preservation office.
The program, announced by President Obama in February, allows homeowners to have their mortgage interest rate reduced to as low as 2% for five years.
The administration is feeling intense pressure from lawmakers and consumer advocates to speed up progress. As of early September, only about 1,700 homeowners had finished all the paperwork and received a new permanent loan. About one-third of borrowers who have submitted complete applications are still waiting for a decision.
In an effort to shame the companies into doing a better job, Treasury will publish a list next week of the mortgage companies that are lagging.
While big lenders such as Citigroup and Wells Fargo have made double-digit gains in the percentage of eligible borrowers they have signed up for trial modifications, other companies such as Ocwen Financial have increased their borrower participation by only 6 percentage points or less since July.
Paul Koches, executive vice president of Ocwen, said his company had already saved 90,000 of its roughly 370,000 distressed homeowners from foreclosure before the government program began.
As of October, Ocwen had started trial modifications for 11% of its borrowers, up from 5% in July.
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