Several dozen members from the Association of Community Organizations for Reform Now (ACORN) gathered outside a Midwood dwelling last week to spotlight mortgage lenders not adjusting loans under a federal program to help homeowners stave off foreclosures.
The rally was part of ACORN’s national, “Home Wreckers”, campaign that alleges the mortgage lenders aren’t making proper use of the Obama administration’s $75-billion Home Affordable Modification Program (HAMP).
To spotlight the situation, ACORN gathered at the home of Zachary Lareche, who for two years has tried unsuccessfully to get a modification for his mortgage with Litton Loan Services.
Litton, based in Houston and owned by Goldman Sachs & Co., had joined HAMP, and ACORN alleges they have not provided timely modifications and end all foreclosure activity against qualified homeowners, as guaranteed in the program.
“I fell behind on my loan when I lost my teaching job at a charter school that closed, and since then Litton has refused to work with me to make my loan affordable so I can stay in my home,” said Lareche, who bought his home in 2001. “I am relieved that because of the President’s program, Litton will finally feel pressure to work with me so I can stay in my house.”
Lareche’s loan was originally with Chase, and after he refinanced into an adjustable loan in 2004 his payments rose from about $1,200 to about $3,000.
In 2006, he again refinanced, aiming to get a 30-year fixed rate loan, but instead got another adjustable loan. Litton bought the mortgage in 2007.
Lareche is now self-employed as a Mechanic and works part-time for the NY City Council, while his wife works as a part-time employee for the Board of Education.
NY ACORN President Pat Boone said just because these servicers have joined HAMP doesn’t mean ACORN’s work is done to ensure that more foreclosures will be averted and fewer families displaced.
ACORN will stay on the case for these homeowners, so that servicers comply with the program’s guidelines and develop ‘best practices’ to achieve maximum results,” said Boone.
As such, ACORN called all mortgage lenders in HAMP to implement several measures including to process modifications in a timely manner and comply with all HAMP guidelines such as an end to all foreclosure activity against HAMP qualified homeowners.
Additionally, the organization is calling on the lenders to agree to a self-imposed six-month moratorium on all foreclosures to allow for adequate infrastructure capable of processing modification backlog and future volume.
Litton Spokesperson Donna Marie Jenbrieza responded that the company strongly disagrees with ACORN’s characterization that they are not modifying loans.
“Right now we have about 65,000 active modifications (nationwide) and in fact offered more than 38,000 modifications under the HAMP program,” said Jenbrieza.
Jenbrieza said these modifications went to homeowners that reached out to Litton and passed preliminary eligibility, although who still have to verify their incomes.
“Regarding foreclosure moratoriums, when we’re in active work with the customer in finding solution for their delinquencies we postpone the foreclosure sale to give us more time to find solution,” she said, adding that the company would prefer the homeowner stay in their home than for the company to have the responsibility of taking over the property .
According to the latest state figures, there has been 3,511 foreclosure filings in Brooklyn thus far in 2009.