Like many New Jerseyans, Yolanda Andrews began having mortgage problems when the economy fizzled, which in turn was caused by the Wall Street meltdown as risky mortgage-backed securities went bad.
But the Newark resident may yet beat the odds. In August, Andrews said, Wells Fargo notified her that she qualifies for a modification of her mortgage loan.
Just one thing: It’s four months later, and the bank still has not forwarded the paperwork. In fact, Andrews said she has been unable to learn the particulars of the offer.
"They haven’t told me how much I would be paying,” she said.
The ongoing confusion about New Jersey’s foreclosure crisis, potential solutions and bungled policies brought Andrews to the narrow street outside Gov. Chris Christie’s home one night last week.
About 50 people from housing advocacy, labor and religious groups were there, singing modified Christmas carols in protest of what they described as the governor’s “indifference,” “lack of leadership” and shifting of funds meant to fight foreclosure.
Andrews wasn’t complaining about her lender – she still hopes to get the promised break on her mortgage. But, like other participants in the protest rally, she cited a lack of transparency in the foreclosure process and a shortage of elected officials willing to stand up for people in danger of losing their homes.
“We’ve got to hold the politicians accountable,” Andrews said, extending that to the White House as well as the governor’s office. “We need to go down to Washington, too,” she said. “Remember how before the election Obama said he was going to fight for the people?”
The political system has produced some aid for distressed homeowners, but it pales beside the magnitude of the problem. In March, state attorneys general reached a $26 billion national settlement of foreclosure irregularities with five major lenders: Ally (GMAC), Bank of America, Citibank, JP Morgan Chase and Wells Fargo.
This month, RealtyTrac, the Irvine, Calif., real-estate monitor, reported 1.5 million properties in foreclosure, with a cumulative value of more than $248 billion. In the third quarter alone, 193,059 homes in foreclosure or already bank-owned were sold, representing 19 percent of all residential property sales, the company found.
Even for the reported individual beneficiaries of the foreclosure settlement, the devilry is in the detailed financial statements.
Like some other governors, mainly Republicans but also California Democrat Jerry Brown, Christie used the state government’s share of the money to plug a budget hole instead of spending it on programs to prevent foreclosure. New Jersey has been slow to even administer federal aid intended to keep people in their homes.
The Office of Mortgage Settlement Oversight, established to monitor banks’ compliance with the settlement, estimated that so far they have allocated $21.9 billion for borrowers around the nation, with another $4.2 billion in trial modifications in progress.
But more than half that total, $13.1 billion, represents short sales in which borrowers still lose their homes, or deeds handed over in lieu of foreclosure, according to the office.
This means that after a plunge in housing values, the big banks agreed to accept current market prices on some homes worth less than their outstanding mortgage loans. During the third quarter, short sales narrowly surpassed the sales of bank-owned properties, according to RealtyTrac.
For a homeowner trying to sell in a down economy, that would be facing facts. But short sales account for $7.4 billion in deal compliance by Bank of America, the lender required to make the biggest contribution toward the deal. Of its write-downs, a majority came from investor-backed portfolios, not the bank’s own accounts.
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