WASHINGTON – Oct. 27, 2008 – U.S. mortgage lenders are showing more willingness to rewrite loans for troubled homeowners, a trade organization said.
“There’s really no reluctance anymore,” said Chairman-elect of the Mortgage Bankers Association David Kittle. “Lenders lose $40,000 to $50,000 on every loan that goes into foreclosure,” he said.
Kittle said some lenders were sending staff door-to-door to engage homeowners in discussions about rewriting their contracts, USA Today reported Wednesday.
Kathleen Day of the Center for Responsible Lending said the door-to-door maneuver may just be a publicity stunt, the newspaper reported.
Many banks lack the extra staff needed to help homeowners renegotiate or systematically review mortgages to see if they qualify for federal programs.
Hope Now, a national alliance of lenders, financial counselors and investors, said 2.26 million homeowners avoided foreclosure since July 2007 by changing repayment plans.
As many as 400,000 homeowners could benefit from a new Federal Housing Administration program, while another 400,000 could find relief through Bank of America, which purchased Countrywide Financial and then settled a complaint against it with terms that include helping qualified homeowners.