What will it take for the media to care about the $2 trillion foreclosure crisis?
The week of Nov. 15-19 was a big week in Washington D.C. for troubled homeowners, housing counselors and anyone in the mortgage industry who cares about what is happening to real estate in this country — or it should have been.
The Senate Banking Committee and the House Financial Service’s Subcommittee on Housing and Community Opportunity held hearings that week to get a handle on foreclosure issues.
Two major issues that were discussed: robo-signing of documents submitted to the courts around the country and the failures of the Housing Affordable Modification Program, known as HAMP.
You would think that every media outlet would have covered these hearings since the foreclosures crisis, considering the alleged misdeeds of the mortgage industry would be something the public would want to know about since it will affect every homeowner in America.
But that did not happen.
On Tuesday and Thursday nights last week, I checked the websites of six major media outlets, but but did not find one mention of the hearings. Yes, I did see where parts of the hearings were referenced in related articles but those were few and far between. Headlining most outlets was the fact that Rep. Charlie Rangel (D-N.Y.) was found guilty by the House Ethics Committee; I am sure the millions of Americans in trouble with their mortgage don't really give a damn that a long-term politician from New York did not follow all the rules.
I would think hearings that are discussing almost $2 trillion in potential foreclosures, hundreds of billions of taxpayers’ money with the government-sponsored enterprises, the allegations that foreclosure processes weren’t followed by our mortgage industry and a potential problem with some 30 million mortgages in securitized pools deserves the media’s undivided attention. Maybe inadequate supervision by our government regulators and a fatal flaw in HAMP with its $75 billion price tag to the taxpayers that was designed to ease the crisis should be reported.
I have spent the past two weeks trying to get a few media outlets to break the story, but there just does not seem to be any interest. I have also reached out to the Senate Banking Committee and the House Subcommittee on Housing to inform them what I found out after my organization, the American Alliance of Home Modification Professionals, met with Phyllis Caldwell, chief of homeownership preservation office, her leadership team and the General Accounting Office.
For those who missed the House subcommittee hearing, I have to commend Chairwoman Rep. Maxine Waters (D-Calif.). She gets it, and she let the witnesses from the panel know she gets it. Besides the hearing being very informative to people that do not have a full grasp on the issues, which are many, including members of Congress, it was great theater. Waters asked the leaders tasked with solving this massive problem if any one of them actually has walked through the process the troubled homeowner goes through in trying to obtain a mortgage modification. The only one that has was Caldwell, who stated before she took the job at Treasury that she helped a relative try and get a modification, but it was extremely difficult.
Chairwoman Waters walked them through the process, explaining how a homeowner who is current on their mortgage tries to request a modification gets sent to an offshore bank representative who goes through a checklist and informs the homeowner they do not qualify. Another good question was asked of regulators: How much in fines or sanctions have been levied against servicers for failing to fulfill their agreements to implement Treasury, Office of the Comptroller of the Currency and banking policy and rules? The question was met with silence from the regulatory agencies. The subject of compliance was brought up with all panelists; they all said their respective agencies were monitoring all the banks and servicers daily, but Waters contended that if they were checking on compliance, we shouldn’t have all the problems we currently face.
One example of a so-called homeowner protection: HAMP mandates an “escalation” process; this is designed to be a check on the servicer/banks for a declined modification — to make sure they are in fact underwriting an application properly. The program implemented by the Treasury does not even require a review of the actual paperwork, underwriting or the correct determination if homeowner does not qualify. We are just to believe the servicer did the job right. We know for a fact that is not happening.
To solve this problem, our organization presented a program to the Treasury to provide this service but were told they have no intention of checking the servicer/bank work product. We believe that this is the fatal flaw in HAMP.
When will the media stop talking about Rangel’s ethics problems or other trivial stories that mean nothing in comparison?
Exposure of the problems facing this country in regard to foreclosures and questionable actions by our banking industry need to be story No. 1 if we have any chance of saving real estate values, protecting taxpayers, our securitization process, and helping and overall economic recovery. I challenge anyone that disagrees to prove me wrong.