So it really actually has mortgage companies thinking in a way they never had before. They shifted staff onto their loss-mitigation teams. I've seen a lot of mortgage companies now set up brick-and-mortar homeownership centers to actually work with struggling homeowners.
So that's been a real shift over the past year, and for the size of some of these companies, they've worked to turn it around as quickly as possible. And there's no doubt that "Making Home Affordable" really pushed them to do it faster...
This is in many ways the gateway for homeowners getting help. It is the first step in the waterfall when a homeowner asks for help; they have to be evaluated for "Making Home Affordable" when their servicer participates, but there are other options that the servicer might make available for them.
Before we had an unemployment program or a negative equity program, there weren't options. ... The feedback we've gotten is that previously, nobody really wanted to entertain short sales or deeds in lieu because they were long bureaucratic nightmares. But HAFA has really put a standard in place for both homeowners and mortgage companies...
We've made more options available under "Making Home Affordable," we want to give servicers more tools in their toolbox, if you will.
On Homeowners Who Didn't Qualify for Federal Assistance:
"Making Home Affordable" wasn't intended for every homeowner, and for some homeowners it's not going to be the right product.
Certainly, it does have requirements: Mortgage of less than $729,750; you have to be owner-occupant; it's never meant for jumbo mortgages; it's not meant for investment properties. It's set out to help a certain population of homeowner -- bearing in mind that it is a government program, and we wanted it to be responsible.
But we certainly have seen that for homeowners who have been unable to get permanent modifications under our program, the top reasons have either been 1) They weren't able to get all of their paperwork in, so the servicer wasn't able to make a decision. 2) They weren't able to sustain the trial payments, making them on time, so we couldn't convert them to permanent. We have the trial period sort of as a check for taxpayers to make sure that this is indeed something this homeowner will be able to afford and sustain over time.
And the third reason is actually that when homeowners did submit their documentation, there was already a debt-to-income of less than 31%. So, by "Making Home Affordable" standards, the payment was already affordable; they didn't qualify.