Callahan’s Cleveland Diary

PD Openers has posted coverage of the Governor’s press conference today, along with cautiously positive reactions to his proposed “compact” from two of the biggest subprime mortgage players, Litton and Countrywide.

Strickland wants companies that manage mortgages to voluntarily sign an agreement to commit to identifying struggling homeowners and assigning staff to work with individuals to develop more-manageable loan terms.

If the companies don’t agree, tougher legislation could be in store, the governor said…

The governor said the proposed agreement was sent to loan-servicing companies Tuesday afternoon. The firms have until Oct. 22 to suggest changes, and the governor hopes they will sign the pact Nov. 8.

A spokeswoman for Litton Loan Servicing said the firm supports the governor’s proposal but will have questions about details. Litton’s president and CEO, Larry B. Litton Jr., served on a foreclosure-prevention task force appointed by Strickland earlier this year.

“I think that in general a lot of this is in line with our practices,” said Donna Marie Jendritza, a spokeswoman for the firm.

A Countrywide Financial official said that the firm was reviewing the agreement and that it appeared to be in line with the company’s practices.

The pact was sent to 20 of the biggest subprime loan servicing companies in the state, officials said.

The Governor’s proposed agreement is “in line with [Countrywide's] practices”? Whoooa there.

…borrower advocates who work with a broad array of lenders say that none make it harder to modify loans than Countrywide, the nation’s largest mortgage originator and loan servicer. Countrywide deploys a 2,700-member unit, called the HOPE Team, that it says helps borrowers modify their loans and hold onto their homes. HOPE is an acronym for “Helping homeowners, Offering solutions, Preventing foreclosures and Envisioning success,” but some Countrywide borrowers say the company’s practices have left them hopeless.

According to a dozen borrowers interviewed for this article, and thousands more who are working with borrowers’ advocates, it is often difficult for homeowners to reach HOPE staff members. When they do, these people said, they encounter hostility and are charged large and unexplained fees throughout the foreclosure process — whether or not they wind up keeping their homes.

“Countrywide is trying to say they are doing workouts, but they are doing them with as little financial sacrifice for the company and as little effort as they can,” said Senator Charles E. Schumer, Democrat of New York and a member of the Senate Committee on Banking, Housing and Urban Affairs. “They are trying to get away with doing a good job here when you can prove by digging even a half an inch deeper that they’re not.”

This entry was posted on Tuesday, October 9th, 2007 at 6:10 pm and is filed under Foreclosure crisis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.