The Making Home Affordable Modification Program is a federal government program started in early 2009 as a reaction to the foreclosure crisis. Homeowners stuck in a mortgage they can’t pay are the intended audience for this program. Consistently, nevertheless, the program has issues with lenders. The mortgage lending practices that spurred the Bank of America / Countrywide settlement with the FTC are just one example of lending practices.
FTC charges against Countrywide
The Federal Trade Commission has been looking into alleged deceptive mortgage practices at Countrywide for almost a year. In June 2008, Bank of America bought Countrywide mortgages for $ 4 billion in stock. Bank of America has agreed to pay $ 108 million in restitution for Countrywide practices, without admitting any wrongdoing. This $ 108 million could be split between the approximately 200,000 Countrywide mortgage holders that the FTC has found were overcharged.
Consistent complaints about mortgage lenders
The Making Home Affordable federal mortgage program is implemented through private lenders. The federal government provides support for the lenders, but the lenders have to comply with the program regulations. A report by the Making Home Affordable Call Center revealed that over 31,000 callers alleged lenders weren’t complying with guidelines in just 30 days. 103,762 homes defaulting on their loans in just April, this means approximately 38 percent of borrowers seeking mortgage modification are finding lenders they believe aren’t complying with federal guidelines.
The deceptive techniques lenders are accused of
Countrywide is the first lender to be charged with deceptive lending practices, but other lenders may well be investigated. Some industry watchers allege that predatory lending practices permeate the entire mortgage lending industry. Most commonly, the four practices that the FTC is targeting lenders for are:
- Charging fees and fines that aren’t really due
- Overstating the total amount on a home loan, therefore extending payments
- Deliberately incorrect fees and charges
- Not complying with industry regulations
More details on this topic
MortgageLoan.com
RealtyTrac.com
financialstability.gov
