Wednesday, January 19, 2011
The government goes to the trouble of providing a hotline to review rejected loan modifications for potential borrowers. But why did the government choose to run the hotline through a company created and funded by a mortgage servicer?
The Homeownership Preservation Foundation is a non-profit group that was created, staffed, and is funded by Residential Capital, LLC, a large mortgage servicer that created the group as a branch of their own company.
Neither the Treasury Department nor the employees of the Homeownership Preservation Foundation are blind to the concerns over the group's ability to remain neutral in the advice they give to borrowers whose loan modification requests have been rejected, however. The Treasury acknowledges it, but reasons that using an organization funded by the industry is the best way to keep from "confusing" borrowers. After all, the Foundation had already created a toll-free hotline to help rejected borrowers receive answers and explanations for their modification rejection.
On the other hand, supporters of the Foundation can point to commentary by independent housing group experts, who have acknowledged that the Foundation's counselors are able to provide more information and assistance to borrowers because of their detailed knowledge of the lending process.
While the hotline has received approximately 1.8 million phone calls, the Foundation does not track the outcome of the calls, leaving no way to interpret whether the hotline is successfully providing neutral advice to borrowers.
If you have been rejected for a loan modification or are interested in pursuing a modification with your lender, contact Yesner & Boss, P.L. for an unbiased assessment of your options.