johnnymk

http://www.app.com/apps/pbcs.dll/art...10140439/1070/



When homeowners find themselves in a mortgage jam, government officials from the president on down have been quick to offer one suggestion: Call the lender to ask for better terms.

But consumer advocates and even mortgage bankers admit that often the answer is: no deal.

The reason is that mortgage companies are being overwhelmed with telephone calls, and even the mortgage companies may not know who ultimately owns the loans, said Joseph Sheridan Jr., president of Intercounty Mortgage Network in Hazlet.

Many mortgage loans now are packaged together then sold as bonds to investors, hedge funds or pension funds around the world. So finding the owner or owners is a huge problem, Sheridan said.

"With this kind of systematic meltdown, there are not enough competent people to deal with it," Sheridan said. "So to get someone on the phone with enough authority (to make a decision) . . . is a big thing."

Sheridan appeared as part of a state Department of Banking and Insurance forum for homeowners in Berkeley earlier this month, which was attended by about 30 residents.

Sheridan and Thomas Hunt, director of consumer finance for the department, told residents their best bet is to work out a new loan with their lender.

Hunt advised homeowners to keep calling lenders repeatedly until they can get an answer.

"People say they've tried and they've run into a brick wall," Hunt said. "Well, you have to be your own best advocate. The servicer and the people who hold your (loan) have an economic incentive to help you."

But Phyllis Salowe-Kaye, executive director of New Jersey Citizen Action, a nonprofit group that helps homeowners in trouble, said officials are offering a myth. She said her group has been largely unable to work out better terms with lenders, who are still resistant to adjusting loans.

"The workouts don't exist," Salowe-Kaye said. "Homeowners . . . spend hours trying to reach the right person, who isn't the right person. Then (the lender) just tacks on the late payments at the end of the loan, and you see the (borrower) in trouble again in six months."

dbax791

How about not doing anything funky and stick with a thirty-year fixed instead of dealing with variable interest rate changes?

I seriously have very little sympathy for borrowers that took out interest-only loans or other weird finance tools to buy a house they can not afford.

VTGreg

It's too easy to blame the people that made the bad decision in the first. There need to be advocates to help these people out and congress should really press to help these people out with our tax dollars.

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Maarchk

This is less about saving the people and more about saving the people who own the loans. If a big pension bought 1 million in bonds, they expect 6 %. Everyone goes to foreclosure and the pension gets 0 from the 1 million.
If they can refinance down to say 5% the the pension gets something over nothing. It makes logical sense but I cannot say its a good idea to decide today, lets save everyone, when people who went broke a couple months ago, or a couple years from now will probably get no aid. They should not just throw money at the problem. They should re-write the law so that it happens less often and/or the resolution that they use today, is applicable for all time. Its BS to save people when its in the media and disregard people when they aren't the front page.
I feel this is what is happening with NOLA and it makes me angry.

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