The Making Home Affordable Modification Program is a federal government program started in early 2009 as a reaction to the foreclosure crisis. . The federal government and lenders have run into consistent issues with this program, though. Bank of America’s recent settlement of a Countrywide lawsuit highlights mortgage industry practices that might be undermining economic restoration from the beginning.
The lending procedures of Countrywide
The FTC has alleged that Countrywide participated in deceptive lending before it had been purchased by Bank of America. Bank of America paid $ 4 billion for Countrywide in June of 2008. Bank of America and also the FTC have reached a $ 108 million agreement where BoA will pay restitution without admitting any wrongdoing on the part of Countrywide. This $ 108 million could be split between the approximately 200,000 Countrywide mortgage holders the FTC has found were overcharged.
Constant complaints about mortgage lenders
Private lenders are responsible for administering much of the Making Home Affordable AT mortgage program. . A report by the Making Home Affordable Call Center says over 31,000 callers alleged lenders weren’t complying with guidelines in just one month. 103,762 homes defaulting on their loans in just April, this means approximately 38 percent of borrowers seeking mortgage modification are finding lenders they believe aren’t complying with federal guidelines.
The deceptive practices lenders are accused of
While Countrywide will be the first lender to be charged for these alleged deceptive practices, there are other lenders being investigated. You will find some investigators who think that Countrywide’s violations are minor within the world of mortgage lending. Most commonly, the four practices the FTC is targeting lenders for are:
- Charging borrowers fees or charging fines that were not actually incurred
- Stating a total balance of the loan that is more than actual amount due
- Intentionally incorrect fees and charges
- Not complying with industry regulations
Read a lot more on this topic here
MortgageLoan.com
RealtyTrac.com
financialstability.gov
