Mortgage lenders with large portfolios of distressed Sacramento loans say they're getting significantly better at rewriting them, and federal numbers released Wednesday suggest more homeowners are getting help.
Mortgage lenders permanently modified 116,297 home loans nationally in January, according to the U.S. Treasury. That far exceeded December's 66,465 permanent modifications and November's 31,382, the report showed.
Treasury Department officials called it a sign that the Obama administration's much-criticized Making Home Affordable program is gaining traction to help ease the foreclosure crisis in regions like Sacramento.
One in five permanent modifications in January was in California, the report stated. Alongside 24,242 permanent modifications, another 167,399 California households received trial modifications. The total was 19,353 higher than in December.
"That's the direction we want to continue to go in," said Alvina McHale, spokeswoman for the Treasury Department's Homeownership Preservation Office. She said the department "pulled out the stops" late last year to propel a program that some Sacramento-area borrowers viewed as unresponsive.
Wednesday's January numbers arrived as lenders and the U.S. government also gear up for a massive eight-hour foreclosure prevention session Friday, Feb. 26, at the Sacramento Convention Center.
The workshop is a repeat of a December 2008 convention center event that attracted more than 1,000 area borrowers to visit with representatives of 19 lenders. The event brought mixed results, with some borrowers reporting help on the spot and others saying initial lender promises of help later went unrealized.
McHale said, "We want to draw in people who have not been hearing of this (Making Home Affordable) program. We're concerned about people already delinquent, who may have trouble getting to their lender." She said at least half of borrowers who lose their homes to foreclosure never talk with their lender.
The Feb. 26 session is free and runs from from 1 p.m. to 9 p.m. at 1400 J St. Borrowers will be able to meet face to face with 14 mortgage lenders and nonprofit home loan counselors, say organizers, who include the federal government, NeighborWorks America and the Hope Now Alliance.
Lenders attending: Bank of America, Wells Fargo/Wachovia, JPMorgan Chase, OneWest, American Home Mortgage, Aurora, Citi, GMAC, HomEq, PNC, Select Portfolio, Saxon, Suntrust and Ocwen. Lenders have mailed invitations to borrowers, organizers said.
"We strive for a concrete decision of some sort, a modification, repayment plan or forebearance (suspending payments for a few months)," said Brad Dwin, spokesman for Hope Now, a lending industry group formed in 2007 to work with borrowers. "The majority of homeowners who attend these events at least walk away with a clearer notion of where they stand."
Dwin said 25 percent to 30 percent of attendees typically receive a financial solution on site. But he cautioned that it often "depends on the area."
"The biggest wild card is unemployment in Northern California," Dwin said.
Lost income has made it especially tough for Sacramento-area borrowers to get loans modified. Elk Grove bankruptcy attorney Mark Wolff said many clients arrive in his office to file for Chapter 13 protection after failing to get mortgage modifications.
"It depends on the lender," he said Wednesday. "I have seen some people get modifications. But I think there are more people who are not getting them. And the modifications they are receiving are not always in the interest of the homeowner."
Elk Grove borrower Dannette Armstrong said she has spent two years trying to get a permanent modification from Litton Loan Servicing. She said it took her "a year and a half of them losing documents and me refaxing" them to get a trial modification last August. It cut her monthly payment from $2,950 to $1,620, she said. But after eight payments she said the servicer told her she doesn't qualify for a permanent modification.
"Now I'm starting all over again, and I've been doing this for exactly two years this month," she said.
In January, Litton reported temporarily and permanently modifying 19 percent of its loans that were 60 days or more late on payments. That was up from 16 percent the previous month.
Bank of America, the capital region's largest mortgage lender after taking over Countrywide in 2008, reported 12,761 permanent modifications in January, up from 3,183 in December. Wells Fargo doubled the number of permanent modifications – from 8,424 in December to 17,652 in January, the Treasury Department reported.
McHale, when asked about borrower skepticism that might prevent some from attending the Feb. 26 event, said the Treasury Department began "a really intensive conversion campaign in November and December" to get more permanent modifications in place.
"Not only do we encourage lenders to do this, we are seeing more positive signs by lenders, including knocking on doors," McHale said.
She noted that the national Hope Now hotline – (888) 995-HOPE – has a special Making Home Affordable help desk for people who aren't getting satisfactory responses from lenders.
"Ask for the MHA help folks," she advised. "They're dedicated to helping people clear those roadblocks."