The Obama administration wants to spend up to $100 billion on efforts to help homeowners, especially those facing foreclosure. But one of the leading ideas on how to do that — rewriting home loans to make mortgages affordable to struggling borrowers — is based on a startling lack of data about what works, and early evidence suggests that many lenders aren’t going to make substantial changes without serious strong-arming.
You can read the rest here.
I actually think modifications are a good idea, but like Rod Dubitsky at Credit Suisse and a bunch of state AGs and banking regulators, I’m kind of appalled federal regulators still haven’t managed to pull together useful data on how mortgage servicers are changing the terms of loans when they say they’re modifying them. The folks at the Officer of the Comptroller of the Currency tell me they hope to have data on which sorts of modifications are working and which aren’t in their next report, issued with the Office of Thrift Supervision—due out around the end of March. As of right now, they can’t even tell us if modifications are raising or lowering monthly payments.
I’m not really sure why they can’t have that data next week, when the state of Maryland has been collecting it from the 65 servicers it oversees since February 2008. The governor said “get this data,” and then the financial regulation agency just kind of, you know, did. Unfortunately, Maryland’s data doesn’t include numbers from some of the largest lenders, like CitiMortgage, Chase, Bank of America and Wells Fargo, because those companies are federally regulated. And they don’t have to tell anyone what they’re doing.