The bill, SB 94, authored by Sen. Calderon, will prevent a person or a business from charging an upfront fee to a borrower for helping negotiate a loan modification on that borrower´s behalf. Such services are free of charge from non-profit housing counselors.

“Economic times are difficult enough without homeowners having to worry whether they are being scammed when they want to modify their mortgage loans,” said Senate President pro Tem Darrell Steinberg (D-Sacramento). “The bill is a common sense, consumer measure that will make it clear to struggling homeowners that they can get help with their loan modification needs free-of-charge. I commend Senator Calderon for introducing SB 94.”

Read more fr0m the California Chronicle

The Association of Community Organizations for Reform Now, or ACORN, continues to stage protest rallies in front of the company’s West Palm Beach headquarters, demanding foreclosure freezes and a hold on evictions while more liberal loan modification are worked out.

But Ocwen claims it runs one of the most efficient and innovative loan servicing companies in the country and got in on the front end of the foreclosure problem before it ballooned into a crisis that tipped the economy into recession.

So far, Ocwen claims to have saved some 90,000 homes from foreclosure and boasts one of the lowest redefault rates of any servicer in the country, meaning that after a modification, more of the loans it manages stay current. It also claims to be able to finish the loan modification process in about 21 days.

Read more from the Miami Herald

The program, unveiled last month, allows at-risk borrowers to reduce their monthly mortgage payments in an effort to keep them from losing their homes. It creates a $75 billion loan modification program that would allow “responsible homeowners” to refinance to interest rates as low as 2 percent.

“We were well positioned for a vigorous launch of this new government program. Since the outset of the mortgage crisis, we have increased key staffing by over 65 percent,” Ocwen Chairman William C. Erbey said in a news release. “Our modification processes required very little tweaking to comply with program guidelines.”

For a loan modification, lenders would have to reduce the mortgage payments to no more than 38 percent of the borrower’s income. The Treasury Department would share the cost for lenders to cut that debt-to-income ratio to 31 percent.

Loans could be extended to up to 40 years.

Read more from the Bizjournals

Borrowers are more likely to default on their payments because they have lost their jobs or because the price of their homes has plummeted than because of tough terms on their mortgages, the study found.

Loan modifications are not necessarily a better deal for investors either, wrote Boston Fed economists Christopher Foote and Paul Willen, Atlanta Fed economist Kristopher Gerardi and Lorenz Goette, a professor at the University of Geneva.

Their research found that policies that directly help homeowners overcome setbacks such as losing their jobs may be more effective in combating foreclosures.

Read more from Reuters

Boston Herald

I know there will be two very different reactions on this blog:

A. Great! Do I qualify?

B. Darn�a give-away to someone who doesn�t deserve it.

Before you hit the comment button, look at who can get these loans.

For the Home Affordable Refinance, you must
Own a house that was Fannie Mae or Freddie Mac insured.
You have to be current on your mortgage.
You can�t be underwater.

For the Home Affordable Loan Modification, you must
Own a home with a first mortgage no higher than $729,750.
You need to be current on your mortgage as of January 1, 2009.
You need to show that you have reason to be having trouble keeping up with those payments. That would include adjustments to the interest rate, reduction in income, or significant increase in expenses (the example they gave way medical bills.)