Why the Foreclosure Plan Isn’t Working
Why can’t mortgage servicers process more than 9 percent of the applications of borrowers eligible for a government retooling of their loans?
Here are five reasons spelled out:
- Fax machines. Most loan servicers require that applications be faxed. “It’s archaic. Given all the problems we’ve had with lost faxes, it seems unreasonable to use a fax system,” said Michael van Zalingen, director of homeownership services for Neighborhood Housing Services of Chicago.
- Too many forms. Each servicers has its own form, as does Freddie Mac and Fannie Mae.
- Outdated info. By the time the multiple forms get through the fax machine, the info is outdated and applicants have to start all over.
- Green personnel. Servicers are hiring and training staff by the thousands and most of them haven’t been on the job long enough to understand the process.
Too complicated to comprehend. Some eligible borrowers are receiving loan modification offers without even applying, but the paperwork is such gobbledygook that they mistake it for trash and throw the offers away.
