National Closing Center

Posts Tagged ‘loan servicers’

Delinquent loans are everywhere and banks do not have enough qualified staff to deal with onslaught of SOS requests. However, some loan servicers are doing better than the others. According to an analysis by Moody’s Investors Service, Bank of America has demonstrated the weakest performance measured both by its speed in resolving the status of delinquent loans and by its proportion of delinquent loans that have yet to be resolved.

On the other hand, the ratings agency found that GMAC Mortgage has generally performed better than its peers.

Moody’s concluded that Bank of America has performed the worst when it comes to resolving delinquent loans across all three asset classes examined – subprime, Alt-A, and jumbo.

Moody’s examined seven major servicers and their resolution of delinquent loans held in residential mortgage-backed securities (RMBS). In addition to BofA and GMAC, the subjects of the analysis included Wells Fargo, JPMorgan Chase, CitiMortgage, Ocwen, and Litton Loan Servicing.

It is only fair to say that most loan servicers are getting better, especially when it comes to short sale resoultion. BofA has also been a little bit easier to deal with lately. Nonetheless, since acquiring Countrywide, BofA has never  been the same.

While success rate for HAMP hasn’t been what the government or servicers hoped, changes that made along the way will help improve it, but the continuous changes are also part of the frustration in trying to manage the program, said Mark D. Spangler, assistant vice president, section manager, with Huntington Home Savers Group. The group is part of Huntington National Bank.

Longterm, HAMP “wasn’t meant to be an end-all, be-all” and there are many other programs out there to assist borrowers, Brewer said.

It’s clear that HAMP is something servicers are stuck with and they are reluctant to call it a failure as there is very unlikely anything better is going to emerge any time soon. However, the biggest problem is the conspicuous fact that many borrowers even after the loan modification canno afford their loans.

In many cases loan modification only delays the real solution for the problem, that is a short sale or even a foreclosure. Even if short sale still quite often gets a bad rap in the press, it obviously is a better solution than foreclosure.