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October 8, 2010

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.

Foreclosure Document Reviews

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.

These are the facts:

• Mortgage servicers completed 149,000* loan modifications for homeowners in


August 2010, including 116,000 proprietary loan modifications and 33,000 Home
Affordable Modifications (HAMP.) [*HOPE NOW Alliance October Data report]
• 91% of all proprietary loan modifications in August reduced homeowners’ monthly
payments so that the modifications are affordable and sustainable.
• Through August, mortgage servicers completed 1.3 million loan modifications in
2010 and almost 3.7 million since 2007.
• There have been 775,000 completed foreclosure sales through August 2010,
compared to 1.3 million loan modifications through August. 2010
• Short sales and deeds-in-lieu are being offered as a dignified alternative to
foreclosure for homeowners who have exhausted all their foreclosure prevention
options and cannot maintain their mortgage.
• Servicers continue to contact and assist at-risk homeowners in a wide variety of
ways. Companies have individual customer assistance centers and participate in face
to face outreach events across the nation individually and sponsored by Making
Home Affordable and the HOPE NOW Alliance. More than 77,000 homeowners
have received assistance at 87 HOPE NOW face-to-face events held across the
country since 2008.
• Homeowners can reach a non-profit counselor at a HUD-Certified counseling agency
24 hours a day, 7 days a week through the 888-995-HOPE Homeowners’ HOPE
hotline operated by the Homeownership Preservation Foundation.
• Servicers and Counselors have worked to enhance electronic submission of
documents for loan modifications through the new HOPE LoanPort system.

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,

Steve Bartlett John H. Dalton


President and CEO President
The Financial Services Roundtable Housing Policy Council

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

Homeowners HOPE Hotline: 888-995-HOPE www.995hope.org


(Homeownership Preservation Foundation)

HOPE NOW Alliance 202-589-1920 www.hopenow.com

Making Home Affordable Program: 866-939-4469 www.makinghomeaffordable.gov


(US Department of Treasury)

US Department of Housing: 800-569-4287 www.hud.gov

US Department of Labor Unemployment Division: 877-872-5627 www.dol.gov

FTC Foreclosure Rescue Scams: 877-382-4357 www.ftc.gov

Fannie Mae: 800-732-6643 www.fanniemae.com

Freddie Mac: 703-903-3933 www.freddiemac.com

NeighborWorks America 202-220-2300 www.nw.org

Federal Housing Finance Agency: 202-414-3800 www.fhfa.gov

Office of Comptroller of the Currency: 800-613-6743 www.occ.gov

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