We are writing to set the record straight on the efforts mortgage servicers are making to assist
at-risk homeowners, as well as to address the issues that are being raised about the processing of
documents for mortgages that are in foreclosure.
As we have said consistently, foreclosure helps no one, and it is the last thing our mortgage
servicing companies want to have happen. That is why our members work hard every day with
their customers who are behind on their mortgage to try to find a solution that avoids a
foreclosure. This effort has produced dramatic positive results for homeowners. Mortgage
servicers have completed 1.3 million loan modifications for homeowners thus far in 2010 and
more than 3.7 million since 2007.
Unfortunately, there are circumstances when a modification or other potential solution such as a
short sale is not possible and foreclosure proceedings must be undertaken. As has always been
the case, no change in the terms of the loan will help a homeowner if they don’t have adequate
income to make even greatly reduced monthly payments, or if they have no desire to remain in
the home. If that is the case, a foreclosure must be pursued by the servicer.
We want to assure you that foreclosure is not initiated by servicers until many months of
delinquent payments, after repeated attempts to work with the homeowner, and only when all
other foreclosure prevention efforts have failed.
In several states, some mortgage servicers have put final foreclosure sales on hold while they
review their document procedures. It is important to note, however, that these are document
process reviews; in almost all cases there are no factual disputes about whether the mortgage is
delinquent, the amount of the arrears, or whether foreclosure is proper. Indeed, a substantial
percentage of foreclosures are uncontested by borrowers. In the overwhelming majority of
cases, we believe the facts presented to the courts in foreclosure proceedings about the debt
amounts and delinquencies have been accurate.
Servicers should be permitted to complete the review of their document processes that they have
already begun. Calls for a blanket national moratorium on all foreclosures are a bad idea and
would cause significant harm to communities at risk, the unstable housing market and the fragile
economy. A foreclosure moratorium would not change the ultimate outcome for borrowers
impacted by this situation.
Distressed Homeowners Are Being Assisted
The foreclosure document and affidavit reviews servicers are conducting are only a part of the
on-going efforts being made to help homeowners avoid foreclosure and stay in their homes.
Servicers are also continuing to work to assist thousands of homeowners everyday who are
behind on their mortgage payments.
Mortgage servicers continue to help thousands of consumers avoid foreclosure every day. Real
progress is being made. The foreclosure document and affidavit review process that servicers are
undertaking will clarify the situation significantly.
Attached is a resource sheet for Congressional staff to assist your constituents. We will continue
to work with all Members of Congress on mortgage loan inquiries that you receive from your
constituents.
Sincerely,
John A. Courson
President and Chief Executive Officer
Mortgage Bankers Association
Attachment
Resources for Assisting At-Risk Homeowners
Resources for Assisting At-Risk Homeowners:
Agency Telephone Website