Hope Now: Not Much Help

by Alex Stenback on April 2, 2008

It appears that our skepticism over the much ballyhooed Hope Now Alliance (the doomed from the start master plan to save millions from foreclosure) was well founded.  NYT reports on the results:

Kenneth Goodman, a homeowner in Fontana, Calif,. said he did not have a good experience trying to get help through Hope Now.

Mr. Goodman, 53, said he had called Hope Now three times in recent months because he was struggling to pay the mortgage on his two-story tract home. The first time he was referred to a mortgage escrow company. The second time, β€œI got someone oblivious to everything,” he said. The third time the counselor told Mr. Goodman that he had a choice: Sell his home for less than the value of his mortgage, or face immediate foreclosure.

β€œIt was all unhelpful,” Mr. Goodman said. He worries that he will lose his home.

There are Hope Now success stories, but the group declined to point to any.

The NYT goes on to suggest that the non-success of the program is the result of a combination of intractable lenders and/or servicers unwilling to take losses along with their borrowers, and a nearly non-functionial system to "triage" distressed borrowers.  Sounds about right.
Distressed Owners are Frustrated by Aid Group [NYT]

{ 6 comments… read them below or add one }

duane April 2, 2008 at 1:15 pm

I can’t see how it failed, as TRIAGE is such a great buzzword!

C. April 2, 2008 at 3:45 pm

If Mr. Goodman called the HOPE hotline 3 different times and got answers he did not wish to hear, then perhaps Mr. Goodman’s situation is one where he cannot be helped and he must help himself by getting out from under the burden of his debts. If that means shortsaling his home then so be it. A loan is a loan. You can afford it or you can’t. Home loan education is what is needed. The HOPE hotline cannot help EVERYBODY – I’m sure some people are in so much trouble by the time they call into the hotline that there’ s NOTHING that can be done for them. And is Uncle Sam responsible for bailing them out?

Miranda April 3, 2008 at 1:23 pm

Uncle Sam is being responsible for bailing out Bear Stearns. Why not regular folks?

At any rate, more education is needed about borrowing. And lenders, as well as borrowers, need to adjust their thinking about debt in this country, realizing that bigger is not always better — especially if you can’t really afford it.

Lending (and borrowing) should be done on whether you can afford the payments after the reset.

C. April 4, 2008 at 9:50 am

I disagree Miranda – The idea of adjustable rate mortgages/neg am loans were never meant for the average Dick and Jane. They’re great for flippers but not the average American family wanting to buy a home and maintain a consistent payment. It’s nothing less than criminal for RE agents, mortgage brokers, and banks to approve such loans for average American people. Where were the watchdogs when this was going down? At any rate, education about financing and loans should be mandatory when someone begins the financing process and hopefully before that – preferably when they begin contact with RE agents.

Miranda April 11, 2008 at 4:48 pm

Oh, I agree that ARMs are a bad choice for most people purchasing a home. (I have a low fixed rate myself.) And I agree that the watchdogs should have been present. And education should be a priority. But if you can make payments after the ARM resets, and you want to save the money, you should be allowed to take advantage of them. As long as you are properly educated about what you are getting into.

Charles May 29, 2008 at 4:42 pm

When it comes to the mortgage mess, there is plenty of blame to go around.

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