Q: Wouldn't it be smarter to just pay down or pay off these bad loans for the tax payers instead of giving money to banks.Wouldn't that take care of the toxic mortgages and help consumer spending at the same time,because poeple would have money to spend .After all it's our money in the first place.

Submitted by Rodney Hughes from Tell City, IN

A: It would have been, and some Democrats like Barney Frank if my memory serves right explored this idea in 2006 or 2007 but the outcry was it would reward bad borrowers. Backers of this idea warned failing to do so would drag everyone down together and voila guess what happened. In retrospect, some sort of nationalization of mortgages could have prevented the meltdown from becoming as deep as it was but of course the story is more complex than that since investors, not banks, now own mortgages that are pooled into bonds etc.

Answered 10/09/09 13:34:16 by Kevin Hall and Tony Pugh

Q: My son 's property and home are in foreclosure and has been according to what he tells me for the last six months. He has been refused a loan modification and told to bring his arrears up to date which he cannot do. However he does make his payments to them on time each month since he was informed of the imminent forclosure. Does'nt the fact that they are accepting his payments without notice of any sort of a continuing forelosure change the scene somwehat.?! Isn't he entitled to a new hearing on the subject.!? Thanks for quick answer

Submitted by kenneth smith from bristol va

A: Should he get a rehearing, yes, is he entitled to, no. not unless he was considered for the Obama plan etc , which sounds like he wasnt. more likely than not, the servicer is applying his mortgage payments to pay off "late fees" and lawyer fees etc. If he is employed and has regular income, most servicers will at least go through the motions of considering him for an Obama modification. Serviers are changing the rules week by week, so he should keep calling, keep trying to have the servicer keep his account open and the property off the auction block. he should find out the law firm that is handling the auction and check with them regularly to see whether they have been put on hold by the servicer or are proceeding to auction.

Answered 10/09/09 13:31:57 by Kevin Hall and Tony Pugh

Q: My husband and I refinanced in April, 2009 because the interest rate fell. This was when Obama passed the bill that kept homeowners from having to have a house appraisal done in order to get the refinance. We were reamed by the bank near $7,000 to refinance for stupid costs. There was no justification for doing that to us. Sure, the monthly payment for the loan alone dropped by $200. Woo hoo. Big deal. However, the total monthly payment increased by $100. We have to pay an impound/escrow account so the bank can pay our taxes and insurance for us. They said that was the only way that we could refinance. So, I'm supposed to depend on some screw-off at the bank to make sure both are paid when before the refi I paid both myself. What gives? I would like to know if I have the legal right, given that this would be successful for me, to sue the bank, get my $7,000 back and get the impound business thrown off the mortgage leaving ME and not them paying for the insurance and tax??? I'd like an answer for this one. I am not the only refier that has been screwed.

Submitted by Sharon Goldern from Marysville, CA

A: Indeed you are not alone, and you've described one of the numerous ways in which banks have been subsidized through the back door. The government was not willing to buy the toxic assets, and recapitalizing the banks proved politically unpopular, so steps like these have been taken to help banks bolster there balance sheets. It's the little guy subsidizing the big guy.

Answered 10/09/09 13:29:06 by Kevin Hall and Tony Pugh

Q: Do you have a list for the public on the Mortgage co, that the fed says have spotty records.

Submitted by A.L. Trottier from Key west, Fl.

A: Chris Adams, the author of last week's story responded: The federal government doesn't really have a list of good and/or bad firms. We did our own research of federal and state records to find examples of firms that had run into problems with either federal regulators (at the Federal Trade Commission) or with state attorneys general. But there is no one official list. We highlighted some examples we found in our stories last week: http://www.mcclatchydc.com/washington/story/76418.html http://www.mcclatchydc.com/politics/story/76420.html

Answered 10/09/09 13:26:51 by Kevin Hall and Tony Pugh

Q: re: mortgage companies with spotty records. My note is being serviced by Ocwen. They apparently have a bad reputation by the comments I find on the internet. Is Ocwen trying to get stimulus money from the government?

Submitted by tim burns from orting, wa

A: Chris Adams, who wrote the story involving Ocwen responded: Ocwen is participating in the Treasury Department's modification program, as are most of the country's major mortgage servicers. Based on current projections for how many loans it might modify, Ocwen could get $200 million or more in modification incentive payments from the Treasury program.

Answered 10/09/09 13:00:24 by Kevin Hall and Tony Pugh

Q: I have turned my paper work in for home modification, it was received by my mortgage company July3rd,2009. I still haven't heard from them they said it would take up to three month's to get the first call. I feel because I am not late or I haven't missed a payment they are not looking at me as a threat to the bank. I have drained my savings and borrowed to make ends meet. Work is slow it is now looking tougher to make my full payment. I was trying to avoid all that I still have good credit but I am so fustrated! If I don't get help soon I will fall into the homeowner night mare.

Submitted by sue kottke from carson city NV

A: call them, don't wait on them, pressure them, write letters, send faxes, get to the supervisors when you dont get help. you cant wait on them to do the right thing, they wont. you have to be aggressive, proactive and patient. it is a dehumanizing, deflating experience but you can outlast them. it's going to take work and perseverence however.

Answered 10/09/09 12:51:59 by Kevin Hall and Tony Pugh

Q: My mortgage with TB&W was transferrde to Bank of America they now tell me my payment will go from $1065 to $1384 a month due to TB&W not tranferring my escrow and I was not paying pmi. How can they do that?

Submitted by Danny Arnold from Smiths Station,Alabama

A: Hmmm, that sounds odd. Are they suggesting that TB&W was collecting escrow but not putting it to proper use? I'd ask BofA to consider amortizing what you owe, asumming it is going up because some sum had not been paid. in other words, spread it out over the balance of the loan. sounds strange, need more info before I could comment any further.

Answered 10/09/09 12:50:25 by Kevin Hall and Tony Pugh

Q: I have recently been turned down for a modification from Fannie Mae, where can I get legal help fighting this?

Submitted by Eric from Bluffton SC

A: I believe they have an ombudsman, that's where I would start. Fannie and Freddie should allow your loan to be modified, assuming it was securitized by them, even if you owe up to 25 percent more than the home is valued at today.

Answered 10/09/09 12:48:28 by Kevin Hall and Tony Pugh

Q: if i could have got $4500 ,which is exactly what i am behind ,in my property taxes ,because of a major illness and loss of income ,my home would not be on the verge of foreclosure. is the cash for clunkers more important than a home. maybe they can tear my home down so i can get a new one

Submitted by michael pugliese from little falls, new york

A: I dont think its going to help you much to compare one with the other, you can say why not spend that $4500 to hire a teacher, fireman etc. it was one of many efforts to stimulate the economy. it boosted car sales, stimulated production etc, but at the end of the day, when it was over, that economic activity subsided. there are no magic bullets. we are in a for a long slog back.

Answered 10/09/09 12:46:40 by Kevin Hall and Tony Pugh

Q: Despite of billion of dollars losses in mortgage lending, scams and fraudulent activities are still ranting and wide spreading. I start a movement called ENOUGH IS ENOUGH to stop them by providing education and training to homeowners on lending laws and requirements. Would your company support my cause by spreading the news to the public?

Submitted by Anh Hau from Newport Beach, CA

A: Well, I'll put this up on our Q and A. Every journey begins with a first step.

Answered 10/09/09 12:45:05 by Kevin Hall and Tony Pugh

Q: The money these mortgage companies are requesting from the goverment should only be given to these mortgage company on the contingency of how many modification loans they do for their current home owners and they must be lower than what they had before. Plus all these so call mortgage modification company that are to help the home owner in there negotiation with these loans should be held accountable for their lack of helping. They should be given a time line on these modification. Meaning that if it takes a new home loan can be writen with in a month why does it take six month to a year to remodification of a current loan. If it takes that long and it is the mortgage company fault as to why the home owner are months behide on their mortgage payments there for the mortgage company should waver those late or lack of mortgage payments. It should NOT be add to the amount of the loan. After all the home owner has been trying to get the mortgage company to modify the loan. Or maybe even exdending the life of the loan to a 40 to 50 year loan for that lower payment. Is there anything the goverment can do to control these companies for the sake of the home owners?

Submitted by Rosemarie St Amand from Lake Placid, FL

A: there are indeed a number of contingencies, first being that the mortgage is affordable, equal to 31 percent of borrowers income. a number of disclosures and thresholds included for servicers before they ever get paid. Mods are more difficult than new loans, in part because new loans are securitized, that is pooled with others, and packaged into mortgage bonds by Fannie and Freddie. This has made it easier for new homeowners, but mods depend on lenders, investors and borrowers aligning their interests and often these are not anywhere near in alignment.

Answered 10/09/09 12:44:21 by Kevin Hall and Tony Pugh

Q: Dear Sir; I hope my email will make a different and i would like to start by saying i supported President Obama, voted for him and i was thinking he will be different but i think they all the same because he gives our money to the banks in billions to help struggling home owners like me who's making there mortgage payment on time so far and not late yet but will be soon to joint others who is defaulting every day and the only answer i get from bank of America is we can't help you because i am not late yet even though my mortgage payment about 55% from my income NOW. so i challenge anyone to show me just one homeowner in the country JUST ONE PERSON ! who is not late yet but struggling and gets help when he or she ask for loan modification from bank of America without paying large fee to lawyers or agency, and i hope someone in the administration is tracking where is the stimulus money that was given to the banks went , that is why i can't support the president on any more issue for now. Thank you

Submitted by Nabil Agha from Winter Park, Florida

A: Unfortunately yours is a common complaint. Prudents lenders shouldnt have given you a mortgage worth more than 35 percent of your income, and now they wont give you an out unless you default, and there's no guarantee that will help you either. No easy answers here, the administration has done a lot to give servicers a number of options to help the borrower, but at the end of the day the servicer works for the investors who own the pools of mortgages and that is the reality any administration plan has to work with. You can argue that maybe it would have been better to nationalize mortgages, rather than capitalize the banks, water under the bridge at this point, but it would have addressed many problems in one swoop. you have the problem of income being swallowed up in a mortgage payment, out in California homeowners are sitting on homes worth 40-50 percent less than the mortgage they carry. tough reality anyway you slice it. Obama cant and wont be able work miracles on the housing front, it's why few predict a robust return to housing market for many years to come.

Answered 10/09/09 12:42:15 by Kevin Hall and Tony Pugh

Q: I just read about some of the shaddy pratices of some of the mortgaging companies, the very first one is my company Select portfolio service. I just contacted them this week about filing the paperwork to get my mortgage modified. In the process they informed me that I had to have my homeowners insurance through them and I thought that was suspicious, but I went ahead and agreed because I am an out of work factory worker and am currently 2 months behind in my payments, My question to you is what are they allowed to do by Law and what they cant do by Law when it comes to my loan. I am news to all of this. I just know I dont want ot loose my home.

Submitted by Renee Bertram from Muncie Indiana

A: Ask them if you have to have homeowners through them permanently or just in the three or four months of trial modification. there is some justification for a short time, since they are collecting escrow on the property and it gives them a certain economy of scale by having insurance in house. i have come across this in cases where i have advocated on behalf of a homeowner, but it was always a short term arrangement, a few months and then reverts back to the homeowner's original policy.

Answered 10/09/09 12:38:37 by Kevin Hall and Tony Pugh

Q: I am interested in purchasing a property that is bank owned by BofA. However, as I read the document attached to the listing it appears that not only must I obtain my home loan through BofA to purchase the house, they won't even look at my offer until I have gone through their pre-qualification process. I have pre-qualified with the bank I have used for decades, and I am ready to purchase. Though I am well qualified, I am being denied the opportunity to purchase because I don't want to bank with BofA. Is it legal for BofA to not only demand that I submit W2's, bank statements, etc, and go through their pre-qual, but that I must also obtain their home loan which may have many restrictions forcing me into a loan that may not be in my best interest?

Submitted by amelia from tucson az

A: It is legal and it is just one of the many ways they are trying to lock in income given their desperate situation, with the govt owning so much of them. I dont give financial advice, but if your gut tells you this is wrong, there's nothign to say that's the place you have to buy. there are plenty of other homes and lenders with a better reputation and practices. with a decision this big, prudence argues in favor of being sure this is the right arrangement for you.

Answered 10/09/09 12:36:22 by Kevin Hall and Tony Pugh

Q: I think I'm getting duped by Indy Mac! After going thru a repayment plan and never being late with a repayment. I get a letter from them stating only that they can't remodify my loan with no further explanation. Is there somewhere I can go to get help to save my home?

Submitted by Andre Maney from Robbinsdale.Minnesota

A: They have to tell you why. i've had this with a borrower i was helping and it turned out there was a change of income that the servicer didnt say was the reason but was the reason. press them, call several times, talk to different agents, ask them to level with you, say pls tell me hombre to hombre what the real reason you were denied is and what you can do to get them to reconsider. usually it has to do with income calculations or if you arent living in the home. many people have rented out hteir homes out of necessity, hoping not to lose it, but then it becomes a rental property and not eligble for govt programs.

Answered 10/09/09 12:34:16 by Kevin Hall and Tony Pugh

Q: Can you explain how or if a "jobless" recovery benefits anyone but the bankers, people on wall street and the executives & board members of large corporations? It seems to me that the middle & working class are paying the largest price for the "recovery" and are receiving nothing in return.

Submitted by Susan Coppola-Hass from Clinton Township, MI

A: I wouldnt say middle class is getting nothing, there are a lot of programs from state aid to extension of cobra benefits that help the middle class, but corporate welfare has been a big part of the financial sector rescue and may grow further if the push for tax credits for new hires gains steam.

Answered 10/09/09 12:32:13 by Kevin Hall and Tony Pugh

Q: Relative in Hawaii has been trying for 14 months to get a responce from Contry Wide about mortgage assistance and nothing but B.S. so far. Any suggestions? Thanks

Submitted by Chet Jones from Las Vegas

A: keep trying, you have to outlast these guys, get it in writing as to why they are rejecting them, ask for consideration in Obama plan, find out which investor actually owns your mortgage (it's pooled with others and sold to an investment group as a bond or security) those are all some pressure points.

Answered 10/09/09 12:30:53 by Kevin Hall and Tony Pugh

Q: What is a "home loan modification" suppose to accomplish, i.e., if necessary are the mortgage companies expected to lower your mortgage rate to 31% if necessary since that is part of the criteria for modification (if paying 31% or more for mortgage)? My current mortgage payment is $1300 which is more than 31% of what was my total gross household income. My husband's unemployment just ran out and our only income is my retirement which is $2036/mo. If they truly lower my payment to 31% of that figure I could manage to keep my home but I am wondering if they are required to lower my payment that much (new pmt. would be $631), which is more than half of what I'm currently paying. I will be contacting them tomorrow since I have had a home loan modification request in their hands since early April, with no word from them. I was just wondering if anyone has had a similar experience with a home loan modification. Thanks all.....Mary

Submitted by Mary Adams from Tahuya, WA

A: There is no requirement that the servicer participate, some more pressure on companies that get govt bailout money i.e. wells, citi and bank of america, but there's no requirement. that said, it's up to them whether or not they put you into the obama plan, but if they do, then it is 31 percent of gross income, which has changed. ask your servicer to reconsider your modification request in ligth of your new, lower rate of income. They cannot evaluate you for the program based on income you no longer make.

Answered 10/09/09 12:29:26 by Kevin Hall and Tony Pugh

Q: I lost my federal job and called Wells Fargo and the loan modification they offered to me is a reduction of 10% of my regular payment for a trail period of 4 month .Also the payments I have missed they will add them to the principal but I understand that their losses are covered by the feds. So if they get $ from the feds were are their losses if the payments which is interest basiclly is been added to the principal . I info them I lost 70% of the income and they said it is the only option they have. I thought there was a goverment program that will assist the public. Sound like the lie to me or they simply donot want to assist the consumer. So what is out there for the consumer?

Submitted by Fernando from Covington,Louisiana

A: If they really are taking part in the govt program they are supposed to get your payment down to 31 percent of your before-tax income. sounds like they arent doing that, so ask them why they are not offering you the Obama plan. As to getting money, they only get money if they get you into that 31 percent of income and you make a certain number of payments etc. there are clear rules and thresholds so that they dont get money for nothing. sounds like your servicer is not being straight up with you.

Answered 10/09/09 12:27:05 by Kevin Hall and Tony Pugh

Q: My question pertaind to the Countrywide Financial lawsuit. I would like to know what other states other than Illinois was involved in then the lawsuit and if it is too late to get included. I am at the current time having the exact same issue with Countrywide ( Bank of America). I have contacted the attorny general and right now am writing my coplaint but long story short am being shuffled from person to person and basically lied to, have been hung up on and given bogus info also now have paid first upfront payment before recieving my home modification papers told I need to make this payment before they will begin my modification. After reading your article I'm scared now that this was another lie.

Submitted by Nora Allen from Kersey, Pa

A: Keep good records and get it in writing that if you make this upfront payment, actions will follow. I worked with one homeowner who had to raise almost $10,000, she did, and the servicer lived up to their word. Can't say that will be your case, but it has happened. But I wouldnt trust any of these guys as far as you can throw them. get it in writing, put them on speaker phone and record it, they're recording you anyway... my advice is dont trust, verify.

Answered 10/09/09 12:24:48 by Kevin Hall and Tony Pugh