Banks and mortgage lenders and servicers in Utah are not yet responding to inquiries on Obama’s $75 billion program for reducing the number of foreclosure homes. They all say they have not yet received instructions or implementing procedures from their headquarters. Even the U.S. Office of Housing and Urban Development in Utah has not received instructions, according to operations specialist Kelly Jorgensen.
Bank of Utah’s vice president Scott Parkinson explained the bank can release information only on or after March 4, the date when financial institutions will be formally given details as heard from industry communications.
Lee VanDyke of Layton First National Bank also can not provide details on the program to reduce foreclosure homes. He says the press has just published the news. He volunteered however that it is more likely that loan modifications would be offered through mortgage processing firms. These usually are not banks even if the home loans were provided by the banks.
Wells Fargo, among the country’s largest mortgage servicing corporations, is also waiting for details on the foreclosure plan and on the decisions of investors. The firm’s chief executive officer Mike Heid said Wells Fargo has stopped selling foreclosure homes until March 13 to enable troubled borrowers to explore their options under Obama’s scheme to reduce the number of foreclosure homes.
Heid also explained that it is not easier with holders of loans that Wells Fargo do not own but only service. Wells Fargo has to work out the details of Obama’s plan with investors and owners of the mortgages.
Parkinson is almost saying the same thing as Heid. He says that the Bank of Utah have sold most of its mortgages to other entities because the bank can not afford to have its money tied up by mortgage loans for long periods of time.
According to the University of Utah’s Bureau of Economic and Business Research, there are about 440,000 houses with mortgage loans across the state. Although Utah is not among the states hit hard by soaring numbers of foreclosure homes, the state had 6,800 foreclosure homes in 2002. Using the national foreclosure rate of three percent, Utah could have about 13,000 foreclosure homes as of January.
The bureau’s director James Wood related that people were still buying houses on subprime mortgages with cheap promotional rates just before the housing meltdown in 2007. He also said that while Utah’s unemployment rate has always been lower than most states, the economic crisis has affected the state’s job market.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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