Josh Fuhrman, a representative of the Homeownership Preservation Foundation (you know, the lender-funded and controlled organization that runs the national “Hope Hotline,”that everyone says to call), appeared at a packed townhall meeting on October 5, 2009 about the foreclosure crisis at the Center for Changing Lives in South Minneapolis, and said this in response to the slow moving pace of the industry to modify loans under the HAMP program created in March:
“People need to be patient, because [the federal program] is new. It is not a quick-fix plan.”
Minnesota Spokesman-Recorder, October 14, 2009, article here.
Mr. Fuhrman is nobody of importance – just the Director of Counseling for the organization. Well, we see where his sympathies lie. See HPF’s website here; article explaining that the Hope Hotline was created to save lender’s money here; HPF’s funding and management here.
The Minnesota article states that only 12 percent of those who qualify for relief have been approved for loan modifications thus far. So does Mr. Fuhrman feel that the other 88 percent should just sit tight while lenders foreclose on their homes? Seems very fair. Lenders have time to process a foreclosure, but not a modification?
Meanwhile Congressman Keith Ellision thinks this is unacceptable, and he wants a moratorium, saying, “[t]his foreclosure crisis is part of a larger assault on middle-class and working-class people.” Undoubtedly, the Homeownership Preservation Foundation would disagree. Rather than push to preserve homeownership, they want homeowners to empathize with the plight of the financial industry. Seems very reasonable — if you are a lender.
It appears that while the industry sends notices about the HAMP program to borrowers, and demands documentation, statements of hardship, and agreements signed and returned, they are continuing the foreclosure process. If the HAMP department happens to modify the loan in time, then the homeowner is fine, otherwise the foreclosure occurs.
This strategy of papering borrowers and demanding documentation leads to another bonus for lenders: homeowners send in their paperwork and thus think their home is, at least temporarily, safe from foreclosure. While they are lulled into thinking that they are safe, they do not seek other remedies, such as bankruptcy or affirmative suits for illegal predatory lending practices or servicer abuse.
After all, under both federal guidelines and a common sense of fairness, lenders are not supposed to proceed to foreclosure while a loan is being considered for modification under HAMP. Nonetheless, the lenders just put a small number of employees in the HAMP department and modify some loans, while the foreclosure folks go full steam ahead.
Josh Fuhrman at the Homeownership Preservation Foundation has the luxury of patience, but more often than not, borrowers seeking modifications under HAMP don’t. New or not, HAMP’s failure to reach even a modest number of borrowers is an outrage, and Mr. Fuhrman and his organization should quit covering for the industry.