| Today's Feature Farm Business
Class for Women.
University of Missouri
Extension and the Barton County Commission are
offering an evening farm business course for farm
women, Annie’s Project, beginning Feb 2nd.
The course includes six evening classes on
Tuesday evenings (Feb 2, 9, 16, 23, March 2 and
16). The classes will be held from 6:30 to 9:30
PM at the Wolf Extension Center in Lamar.
Course topics include:
communication, working with different personality
types, farm record keeping, business plans, how
property is titled, leases and legal issues,
financial statements, retirement and estate
planning, using spreadsheets, risk management,
grain marketing, insurance, computer software
tools and much more. The course will be taught my
University of Missouri Extension specialists and
will also include guest speakers.
Annie’s Project began in
Illinois years ago. Annie was a woman who grew up
in a small town in Northern Illinois. Her goal
was to marry a farmer and she eventually did.
Annie spent her lifetime learning how to make
better farm management decisions with her
husband. Together they did great things, but it
was not easy. This course is Annie’s Project
– to take her experiences and what she
learned about farm management and share it with
other farm women living and working in a complex
business environment.
The goal is to empower farm
women and help them make better management
decisions through networking and by utilizing
critical financial information. The course is to
provide mentoring for farm women with varying
levels of business skills. Farm women come from
many different backgrounds, from rural to city
life. Women who are new to the farm business may
be overwhelmed and afraid to ask questions. Women
who are accustomed to the farm business may
understand agriculture, but feel helpless with
new technologies like computers.
Over a six week period,
Annie’s Project gives these farm women the
opportunity to learn from Extension specialists
as well as from each other. The class is being
partially funded by a grant from the North
Central Risk Management Center. The cost for the
6-night course is only $50. Class size will be
limited to 20 women to ensure sufficient group
interaction so you must preregister by January
27th.
For more information or a
brochure call or stop by the Barton County
Extension Center at 417-682-3579 or
bartonco@missouri.edu.
Homeowners Say
Banks Not
Following Rules
for Loan
Modifications
by Paul Kiel, ProPublica
Nathan Reynolds is something of
an expert on the government’s foreclosure
prevention program. A mortgage broker who’s
worked in the Chicago area since 1998, he’s
seen both his business and his home’s value
plummet in the past few years. After receiving
his own trial loan modification from JPMorgan
Chase, he’s helped others apply for
modifications through the program on his own
time.
But in November, after Reynolds
had made trial loan payments for seven months,
Chase told him his mortgage would not be
permanently modified. Chase had determined that
his personal financial troubles were only
temporary — because Reynolds had expressed
optimism that the administration’s policies
might rescue the housing market, boosting his
income.
That’s not a legitimate
reason for a loan servicer to deny someone’s
modification, according to the Treasury
Department’s guidelines for the program. And
Reynolds’ experience — along with the
cases of two other homeowners examined by
ProPublica, shows how servicers have created
unnecessary hurdles that, in some instances,
violate the loan program’s rules.
Housing advocates say they
frequently see homeowners rejected or kept in a
trial modification for questionable reasons.
"There’s a real resistance on the
servicers’ part to making permanent
modifications," said Diane Thompson of the
National Consumer Law Center.
The administration set a goal
of helping up to 4 million homeowners through the
$75 billion mortgage modification program as a
way to blunt the boom in foreclosures. Treasury
has produced a growing number of mandatory
guidelines for banks and other loan servicers to
review applications and perform the
modifications. In exchange for tailoring loan
payments to 31 percent of the homeowner’s
monthly income, both the servicer and the owner
of the loan receive incentive payments.
Servicers representing 85
percent of the housing market have signed up to
participate. Applicants must first go through a
trial period before their mortgage payments can
be permanently reduced. But servicers have been
slow to convert hundreds of thousands of trials
into permanent modifications — as of
November, only about 31,000 had been made
permanent. That spurred Treasury to publicly
criticize the servicers’ performance and to
put out new guidelines in recent months to speed
up the process.
Treasury said recently that the
effort has resulted in a "significant
increase" in offers of permanent
modifications, but numbers demonstrating how
significant won’t be available until
February.
ProPublica has reported since
last June on homeowners’ frustrations in
receiving a prompt answer from servicers,
particularly the program’s largest servicers
— Bank of America, JPMorgan Chase, Wells
Fargo and CitiMortgage. In response to widespread
complaints, those servicers have dramatically
increased staffing and touted other improvements,
such as new document management systems.
But when homeowners do get an
answer, the reasons don’t always jibe with
how the program is supposed to work. Housing
advocates say this is a direct result of a lack
of effective oversight of servicers in the
program, something ProPublica has focused on
before.
‘An Excuse to Deny
Someone’
Reynolds was a prime candidate
for a loan adjustment and was among the earliest
homeowners to receive a trial modification.
His mortgage brokerage business
had followed the market downward, and as a
result, he’d fallen three months behind on
his interest-only mortgage. Area real estate
cratered. His own home, bought in 2001 for just
over $400,000, had rocketed up to about $1.2
million in value in 2006, and then down again to
about $350,000. With a refinancing in 2005 and a
home equity line of credit with Countrywide, his
mortgage debt exceeded his home’s value by
more than 70 percent.
Soon after the loan program was
announced last February, Reynolds applied. He
received an application in late April and was
accepted, making his first payment of about
$2,400 (down from $3,300) in May. He made six
more payments. Like many borrowers in the
program, he says he was asked over and over to
send the same documents and later, updated
versions of those documents. Finally, in late
November, he received an answer: He was denied a
permanent loan modification.
The reason? A Chase employee
explained to Reynolds that they’d determined
his financial difficulties weren’t
permanent. In his application, he’d written
that he believed that the government’s
rescue efforts would "save the U.S. housing
market" and that his business "will
once again be profitable." The Chase
employee told him that statement indicated his
hardship was only temporary.
"That’s just
nonsense," said Thompson of the consumer
center. "To me, that sounds like an excuse
to deny someone."
Chase spokeswoman Christine
Holevas told ProPublica that Reynolds had been
denied "because the skill and ability is
still there to earn the income." Since
he’d "stated in his letter that
business would be picking up," it was
"not considered a permanent hardship,"
Holevas said.
Such a determination
contradicts Treasury’s guidance to servicers
for the program. A FAQ issued to servicers says
the program does not "distinguish between
short-term and long-term hardships for
eligibility purposes."
When ProPublica asked about
this guideline, Holevas did not directly respond.
She did offer another reason for denying
Reynolds: Chase’s review of financial
information showed his income had not decreased.
Reynolds, who has a wife and
two small children, says no Chase employee had
made such a claim to him and that the documents
he provided show that his mortgage business
dropped more than 50 percent in 2009. He
submitted a new hardship statement in December,
in which he tried to make clear that his troubles
are real and lasting. Holevas said those
documents would be reviewed.
Now, Reynolds says his finances
are at the breaking point and bankruptcy appears
unavoidable if Chase denies him again. "I
did everything that was asked of me, but Chase
has me backed into a corner that I cannot get out
of."
The Nine-Month Trial
Six months into a trial
modification, Gary Fitz of California still
doesn’t know whether or when his mortgage
will be permanently modified, and he’s been
told he’ll have to wait for a few more
months.
Under the program’s
design, the trial period was supposed to last
three months, giving time for the servicers to
collect and evaluate the homeowner’s
financial information. At the end of the trial,
if the homeowner fit the program’s criteria
and had made all three modified payments, the
servicer was supposed to promptly make the
modification permanent.
Instead, trial modifications
routinely last more than six months, homeowners
and housing advocates say.
There are a number of adverse
consequences of a trial period’s dragging
on, said the consumer law center’s Thompson.
Because a homeowner is not making a full payment,
the balance of the mortgage grows during the
trial period. The servicer reports the shortfall
to credit reporting agencies, so the
homeowner’s credit score can drop. And most
importantly, says Thompson, the homeowner
isn’t saving money in case the modification
fails and the home is foreclosed. "Keeping
someone in a trial modification really does not
do them a favor," she said.
Fitz’s case shows why some
homeowners have remained in limbo so long.
He sought a loan modification
in the spring of 2009 because his wife’s
salary had been cut. Like millions of others, he
applied soon after the administration announced
the program last February. He was accepted for a
trial modification and made his first payment in
July.
Fitz was prepared for an uphill
struggle. A Wells Fargo customer service
representative told him early in the application
process that he should make seven copies of his
financial information — because Wells Fargo
would likely lose it more than once. He says
he’s sent the same paperwork in five times.
When the trial stage lasts so
long, servicers commonly ask homeowners for
updated financial information months into the
trial period. Fitz, for example, submitted his
paperwork for the first time last spring. But
when Wells Fargo requested an updated package in
December, it showed that he’d received a pay
raise last June of about $80 per month.
Because of that, Wells Fargo
started him over on a new trial period –
even though his trial payments climbed just $27,
from $1,733 to $1,760. His first payment on the
new trial period is due Feb. 1, meaning that by
the time he completes it, he will have been
making trial payments for nine months.
Wells Fargo spokesman Kevin
Waetke said the company does not comment on
individual borrower’s cases. He did say,
however, that "the federal guidelines
require a final review of updated financial
documents before moving any Home Affordable
Modification from trial status to complete."
That’s not true. In a
Treasury guidance to servicers issued in October,
meant to streamline the review process, it says
there is "no requirement" to
"refresh" the homeowner’s
documentation as long as it was up-to-date when
it was originally received.
Wells Fargo also appears to
have begun Fitz’s second trial period
contrary to Treasury guidelines. A Treasury
guidance last April said that a servicer should
not begin a new trial period if a homeowner has
only a minor income change (defined as exceeding
the "initial income information by 25
percent or less"). Guidelines issued later
are even more restrictive about starting a new
trial period. The reason is clear: The purpose of
the trial period for the homeowner is to
demonstrate the ability to pay, and such a small
change in income is unlikely to affect that.
Asked to respond, Waetke said
that "given the complexity of the program,
the volume of calls we receive and the number of
modifications currently in process, there is the
potential for a mistake to be made." He
added that Wells Fargo would continue to review
the case.
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