Bloomberg recently reported B of A and Wells Fargo have upped their efforts to curb foreclosures. Both have hired staff and contacted homeowners to reduce loan rates or to arrange repayment plans to cut monthly payments.
B of A reportedly has doubled it's loan modifications in the first half of this year compared to the 2nd half of last year. It claims to have completed 117,000 loan modifications from January to June of 2008. The article didn't say if B of A counted any loan modifications from recently acquired Countrywide as part of it's total. The article also said Wells Fargo has increased staffing fivefold: from 200 in 2005 to 1,000 currently.
B of A said it plans to modify at least $40 billion in troubled mortgages by the end of 2009 to help more than 250,000 borrowers keep their homes. In response to these claims here are some direct quotes from the article:
Voluntary efforts so far "have not ramped up'' fast enough to curb foreclosures, said Julia Gordon, policy counsel at the Center for Responsible Lending, a Durham, North Carolina-based consumer group.
"We have heard wildly different things about how much modification is going on,'' said Representative Brad Miller, a North Carolina Democrat. "We have heard from the industry that they are modifying like crazy. And we've heard from consumer advocates that they are hardly modifying at all.''
"The assessment sounds better than it is,'' said Representative Barney Frank, the committee's chairman and a Massachusetts Democrat, who plans another hearing in September. "There needs to be a sense of urgency,'' he said. "Yes, I'm glad you're doing what you're doing, but please don't take any comfort from it because we've got problems.''
Almost 1.7 million homeowners averted foreclosure through loan modifications from July 2007 to May 2008, Faith Schwartz, executive director of the Hope Now Alliance, said at the hearing.
I would have to agree that not enough is being done. Foreclosures and REO's have been increasing for over 1-year now. We will find a bottom to this market when foreclosures and REO's start to dry up.
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