Monday, April 13
Posted noon EDT
WHAT UP WITH MHA?:I've received a few e-mails asking variants of this question: Does the Making Home Affordable program exist?
Readers tell me that they prepare themselves by collecting the relevant information, and then they contact their loan servicers to get the ball rolling on either a Home Affordable Refinance or a mortgage modification under the Obama plan. And these borrowers are told: Sorry, we don't know anything about the Obama plan yet.
The broad outlines of the Obama plan were released Feb. 18, and details were released a month later. Then, on April 4, Fannie Mae and Freddie Mac incorporated the refinance program into their software for loan originators. Information about these programs has been out for almost eight weeks now. Yet mortgage servicers say they don't know nuthin'.
Quite a curious chain of events. You'd almost think that the mortgage servicers are dragging their feet to apply political pressure against a president they opposed in the election. But that can't be the case, can it? Servicers wouldn't hold modifications hostage until Congress drops a proposal to allow mortgage cramdowns in bankruptcy, would they? Ah, just asking these questions marks me as an incorrigible cynic.
Too bad you can't fire your mortgage servicer.
I welcome anecdotes from readers who have had success or failure when they've applied for mods or refis under the Obama plan, at hlewis@bankrate.com.
By the way, follow me on Twitter.
OTHERS WEIGH IN: Read Dan Green's excellent summary of how the Making Home Affordable program works.
Jack Guttentag, also known as the Mortgage Professor, says the Making Home Affordable plan is drawn too narrowly because it ignores the problem of negative equity.
Guttentag adds: "When it comes to assisting mortgage borrowers, however, the mindset is that assistance should be limited to those who have some moral claim to government help. Eligibility is based on whether someone deserves a hand, with the systemic implications swept aside."
Guttentag understands the political calculation behind offering help only to "deserving" homeowners. But he notes the difference in the way lenders and borrowers are treated. "Undeserving" lenders have received billions of dollars in government aid to avoid the systemic consequences of their failure. But the government tries to withhold aid to "undeserving" borrowers (such as landlords and folks who are deeply underwater), further undermining the real estate markets.