Just Another Day in the Foreclosure Prevention Business
I’m on hold with a smaller servicer, checking the progress of three Fannie Mae files I’m working on to prevent foreclosure. They just informed me that one of the borrowers had just been approved in July for the Homesaver Advance (HSA).
This is the third borrower I’ve worked with in the last 6 weeks who’s been given an HSA before working with me. I’d written about this Homesaver Advance program recently. explaining why it’s a joke, and that many of the borrowers would re-default.
I’ll say it again, if Fannie Mae is going to insist on driving borrowers into this program, then I can assure you that they’re going to see their re-default rate skyrocket. These are nothing more than glorified repayment plans. I recall one negotiator telling me, “Yeah, but the rates on these are lower than the existing mortgage rates.”
To which I replied, “Who cares?” You’re taking an arrearage, spreading it out over 15 years, and plopping it on top of the existing payment, and everything’s supposed to be okay? It would be one thing if they allowed a reasonable surplus, but they’ve actually LOWERED the surplus requirements in order to jam more bodies into this product.
It’s just unbelievable that people in Congress continue to shake their fists at conventional lenders for “not modifying enough loans,” when the entities that they have the most influence over are the LEAST flexible, most unpredictable, and least forgiving investors on the planet at this point in time.
It just seems to me that if you’re a ranking member on a committee that provides industry oversight, that you’d want to become an EXPERT in that field. Apparently, my standards are too high. Hell, I’d run for Congress myself, but I’m sure I wouldn’t survive the public body cavity search. It’s absolutely shameful how ignorant our national leaders are when it comes to the issues that are most important to Americans.
There was a time when I questioned the credibility of the mainstream media, because their reporting on topics I knew well was so inaccurate. I wondered, “If they’re this inaccurate on these topics, are they just as misinformed on everything that they report?”
Their lack of credibility is easily trumped by the ignorance of our public officials. The fundamental reason that the “solutions” put forth to “solve the housing crisis” have fallen flat is because their authors/architects really haven’t studied/comprehended the subject matter.
The HSA suffers from the same myopic/uninformed viewpoint. These people are supposed to be in charge, they’re supposed to be helping to prevent foreclosure, they’re supposed to know what they’re doing. They’re either dishonest or incompetent.
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Tags: Fannie Mae, FNMA, Homesaver advance, HSA, Prevent Foreclosure