Knock knock. Who’s there? Freddie....
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It’s not quite ‘Hi, I’m from the government and I’m here to help.’
But it’s along those lines.
Freddie Mac, the government-controlled mortgage giant, plans to send people out to knock on the doors of borrowers who might qualify for a loan modification under President Obama’s Making Home Affordable program but haven’t completed the paperwork.
The plan, which you can read about here, is to work one-on-one with people who didn’t respond to letters or phone calls from their mortgage servicers, or who need to provide more information to launch their three-month trial periods under the federal loan-mod scheme.
The door-knockers will be supplied by Titanium Solutions Inc., a specialist in contacting and working with troubled borrowers. They will try to contact people whose mortgages are owned by Freddie Mac, the second-largest buyer of home loans. The borrowers must be at least 31 days late in paying their loans, and they can’t be in bankruptcy.
Titanium ‘can help them overcome the roadblocks keeping them from starting their Home Affordable Modification trial periods,’ Ingrid Beckles, Freddie Mac’s senior vice president of default asset management, said in a statement. The idea, she said, is to ‘give borrowers ... the same type of personalized guidance they may have had when they were buying their home or applying for their mortgage.’
To minimize potential fraud by impostors, Titanium representatives will not accept mortgage payments or any other money from borrowers, Freddie Mac said.
The announcement left unanswered certain questions about the program, such as exactly how many borrowers are likely to be contacted and how much it will cost. Freddie Mac spokesman Brad German said he didn’t have those details, and Titanium officials couldn’t be reached for comment.
At last report, Freddie Mac had 340,000 seriously delinquent single family mortgages -- loans in foreclosure or behind in payments by at least 90 days, German said. That worked out to 3.14% of its mortgages, up from 1.11% a year earlier.
Fannie Mae, the largest buyer of U.S. mortgages, said in a news release today that its serious delinquency rate hit 4.17% at the end of July, a record and up from 1.45% percent a year earlier. Like Freddie Mac, Fannie Mae was taken over by the government when defaults threatened its solvency.
It would be interesting to know how many Freddie Mac borrowers will welcome the help, and how many have just given up on reworking their loans because they are so far under water. No word on whether Freddie Mac will report along those lines, but don’t hold your breath.
In any case, plenty of people will be watching this and similar efforts.
‘It is my understanding that a number of loan servicers/loan modification specialists have started going door-to-door trying to get home owners to engage in the loan modification process,’ banking consultant Bert Ely said in an e-mail to The Times.
‘However,’ Ely added, ‘many people do not want to play, usually for financial reasons. Consequently, Freddie’s outreach is hardly unique. How successful it will be, though, is questionable.’
-- E. Scott Reckard
