In an October 18, 2009 article entitledLong-term Obama loan modifications prove elusive in CNN Money, a treasury “spleswoman” explains that in order to assist servicers in getting the financial information on borrowers attempting loan modifications, they may “allow servicers to access tax records directly from the Internal Revenue Service.”
This on the heals of the entire support industry from legal aid attorneys to House of Representative members, to non profit counselors declaring that even they cannot get the servicers to return calls, acknowledge the receipt of paperwork and worse- So the solution, according to Treasury is simply to give the lenders access to the borrowers private financial information directly? It’s nice to know the government is so willing to “help”, and I’m sure the borrowers out there fighting to save their homes would agree.
Here’s a little bit of the article:
The Treasury Department said these moves should make it easier for qualified borrowers to get permanent modifications, according to a spokeswoman. Officials are discussing ways to make it even easier, she said, including allowing servicers to access tax records directly from the Internal Revenue Service. (emphasis added)
It is in servicers’ interest to convert eligible borrowers since they only get incentive payments when the modification is made permanent, the Treasury spokeswoman said. Plus, if the government finds institutions to have wrongly deny swaths of people, it could impose penalties.
“Treasury is also working intently with servicers to help ensure that they execute in helping more borrowers convert to permanent modifications,” she said.
Who’s to blame?
Servicers say they are wrestling with getting the completed documents they need to put borrowers in permanent modifications.
At JPMorgan Chase, for instance, representatives call and send letters to homeowners detailing what they still need to mail in. The bank says it has improved its system for collecting paperwork so that lost documents are not the problem. The issue, it says, is that homeowners are simply not sending in what’s required.
“At first blush, you’d think that for people who’ve made three payments, it would be a no-brainer to get the paperwork in,” said Tom Kelly, a Chase (JPM, Fortune 500) spokesman. “But for some people, it just hasn’t been the case.”
A Citigroup (C, Fortune 500) spokesman also said the documentation process has been challenging.
But many borrowers and housing counselors contend that homeowners send in their documents multiple times, only to be told their files are incomplete. This has been a problem that’s plagued the program from the beginning.
