Geithner, Donovan Press Banks to Rev Up Foreclosure Help
July 13th, 2009 by 
Joseph Smith
The CEOs of the nation’s largest banks were urged last week by Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan to step up their loan modification efforts under the federal government’s foreclosure help program.
In a letter sent to the CEOs of 25 mortgage lenders, Geithner and Donovan reiterated the need for banks to give more attention to the foreclosure prevention program to help ensure its success in helping American homeowners keep their homes.
The two agency heads admitted in their letter that the government’s foreclosure help program has not made considerable progress despite subsequent efforts of the government to expand the program.
When President Obama launched the Making Home Affordable program, he said the program will be able to help about 4 million distressed American homeowners. But after about four months, the government does not even have an estimate of the number of American homeowners helped under the foreclosure help program.
Some reports said over 270,000 loan modifications have been worked out, but they do not have data on the number of monthly loan payments that were really reduced and number of homes really saved from foreclosure.
Mortgage lenders have been saying they are overwhelmed by the number of loan modification requests and their systems and personnel are not yet fully ready for loan modification services.
Nevertheless, some of the banks have insisted they are doing their best in helping implement the Making Home Affordable program.
JPMorgan Chase said it has already processed 87,100 loan modifications under the foreclosure prevention program and has been evaluating over 150,000 applications. It has also hired 950 more counselors and launched 27 foreclosure prevention centers where distressed homeowners can go and ask for help.
Wells Fargo and Bank of America issued statements expressing their commitment to help implement the federal program and described their initial progress.
In the letter, Geithner and Donovan urged the banks to hire and train more personnel to focus on loan modification and to appoint a senior liaison officer for the foreclosure help program.
Beginning August 4, the HUD and the Treasury will issue monthly reports on the progress of the foreclosure help program, showing the performance of mortgage lenders.
In addition, Freddie Mac will also review its loan refinancing performance and audit the refinancing applications of distressed borrowers who did not initially qualify for the federal foreclosure help program.
