Mortgage Madness….still.

WASHINGTON — Nearly two years after the “robo-signing” scandal forced a reboot of the nation’s home-foreclosure process, mortgage servicers have begun the hard work of buffing up their industry’s tarnished image after years of making life miserable for Americans struggling to hold on to their homes.

Changing the industry’s bad behavior will be a slow and painful process for servicers who collect mortgage payments and manage the accounts on behalf of lenders, however. The inappropriate fees, mishandled accounts, shoddy paperwork and illegal foreclosures that first came to light after the 2007 housing crisis were longstanding problems that had gone largely unnoticed for years.

Whether it was obtaining loan modifications, arranging short sales, negotiating principal reductions or refinancing homes through the federal Home Affordable Refinance Program, mortgage servicers were more obstacle than facilitator during the housing meltdown, according to many housing advocates and consumer attorneys.

And depending on whom you talk to, not much has changed.

“They’re a huge, inefficient, bureaucratic ship that doesn’t operate well, and it’s not going to turn itself around quickly. Just the day in, day out pulling of teeth you have to do (with servicers) is mind-numbing,” said Daniel Lindsey, supervisory attorney at the Legal Assistance Foundation in Chicago, which helps delinquent homeowners avoid foreclosure.

Jose Rodriguez, a foreclosure intervention counselor with the Mission Economic Development Agency in San Francisco, said it could still take more than a year to complete a loan-modification review.

“By the time we see clients who’ve tried it on their own, they’re ready to give up,” Rodriguez said. “We’ve witnessed clients that have easily taken at least two to two-and-a-half years to complete a modification request.”

David H. Stevens, the president and CEO of the Mortgage Bankers Association, acknowledged servicers’ recent deficiencies but said the industry had changed its business model and that progress couldn’t be denied.

“There are still mistakes being made, but it pales in comparison to what this environment was like in the early part of this housing crisis,” Stevens said. “I think we are clearly on the precipice of that changing.”

Forced to improve

Early on, servicers admittedly were unprepared to handle the massive failures of unsustainable and exotic mortgages that had originated during the housing bubble. Failed lenders such as Countrywide Mortgage and Washington Mutual added millions more bad loans to servicers’ caseloads just as they were trying to ramp up their systems and staffing to handle the crisis, Stevens said.

But after the problems resulted in federal consent orders against 17 servicers, a near-nationwide moratorium on foreclosures, a $25 billion national settlement to address past improprieties and federal plans for mandatory industry standards, the situation is starting to improve.

The national settlement negotiated by the federal government and the states has forced the nation’s five largest servicers to beef up staffing, improve communication with borrowers, assign one person per account and provide greater accountability when executing foreclosure documents. Stevens called the requirements “extraordinary.”

“I’ve been in the financial services market for three decades,” he said. “There’s never been standards like this.”

Many of the settlement terms probably will become mandatory for the entire industry when the Consumer Financial Protection Bureau finalizes new standards for servicers later this year.

Announced in February, the terms of the $25 billion settlement call for Ally Financial (formerly GMAC), Bank Of America, Citi, JPMorgan Chase and Wells Fargo to provide $17 billion in principal reductions and loan modifications, up to $3 billion in refinancing relief, $1.5 billion to borrowers who lost their homes and another $1.5 billion to participating states.

While the settlement is a “good first step,” said Diane Thompson, an attorney with the National Consumer Law Center, she wonders whether the agreement might cause servicers to relax their consumer-friendly efforts, realizing that their punishment already has been delivered.

“I think there’s a real risk that the pressure on them to behave well has disappeared,” she said.

As for the industry guidelines the Consumer Financial Protection Bureau has proposed, Thompson called them “very weak.”

“They don’t go much beyond existing law and the clear and explicit literal mandates of Dodd-Frank,” she said, speaking of the 2010 financial overhaul law. “So if I was a servicer, I wouldn’t be particularly worried.”

While most of the financial relief spelled out in the settlement is yet to come, the agreement is bearing some early fruit. Loan counselors and attorneys say they’re starting to see more loan modifications and principal reductions than at any time in recent memory.

“A year ago, I could count on two hands the number of principal reductions I’ve seen over the last five years. Now I’ve seen that many in the last six months. And that was before the settlement,” said John Groene, a neighborhood director at Neighborhood Housing Services of Chicago Inc., a nonprofit community revitalization agency.

Nightmare finally ending

Burt Hamrol of South San Francisco, Calif., is an early beneficiary of the settlement. The 51-year-old carpenter recently received a letter that said he’d been approved for a $297,000 principal reduction by Bank of America, after several years of battling its mortgage servicers.

“When I opened up the envelope and read the letter, I started crying,” Hamrol said. “I’m going, ‘No way. Really?’ ”

The unexpected turn should provide Hamrol with a happy ending to a nearly five-year odyssey that saw him denied loan modifications three times after his mortgage payment with Countrywide doubled from $1,800 to $3,600 per month.

Hamrol’s problems began in 2007, when he tried to refinance his interest-only mortgage to a fixed-rate plan. Countrywide offered the fixed rate for a three-month trial period, Hamrol said, but after that, the payments doubled.

When Bank of America took over Countrywide, Hamrol said, it tried to get him to pay the same amount, but he refused.

“They said that’s what it is because my house is worth all this money,” Hamrol said. “I told them the house is only 890 square feet. They said, ‘But you live in San Francisco in a desirable area.’ I told ’em I live in South San Francisco and it’s a horrible area.”

For 18 months, Hamrol said, he never paid the $3,600 mortgage. After being barraged with collection attempts and threats of foreclosure, he said, he put the home up for sale in 2009 and moved in with a friend for four months.

“It went from $699,000 to $599,000 to $499,000 to $399,000. I didn’t get one offer,” he recalled.

Hamrol eventually moved back home and began working with the Mission Economic Development Agency for a loan modification. The bank initially agreed to a three-month modification trial period at $1,800 per month, Hamrol said, but then he was denied permanent relief. Hamrol said the bank didn’t properly credit his payments. He was offered another trial modification, but was denied again after the trial ended.

At his wits’ end, Hamrol said, the nightmare finally ended several weeks ago, when he got a letter “out of the blue” from Bank of America that said it would knock $297,000 off his principal and lower his payments during yet another trial period to $2,200 per month at 2.5 percent interest.

“If this really happens, I’m gonna go to Ireland and kiss the Blarney stone or something. I can’t believe it. I’m going to make my payments in May, but I still don’t trust them,” Hamrol said.

Rick Simon, a Bank of America spokesman in California, was unfamiliar with the case but said Hamrol probably was one of several hundred people nationwide who had received similar offers because they already were slated for relief under the settlement, as their paperwork and documentation were in order.

“These people are being helped in a way that wasn’t available two months ago, prior to the settlement,” Simon said.

Similar letters will go out over the next few months to some 200,000 other Bank of America borrowers as their eligibility under the settlement is determined, Simon said. Bank of America has provided more than 1 million loan modifications in the past four years, but Simon acknowledged that the program “hasn’t always gone as smoothly as we hoped.”

He said the high default rate on Bank of America trial loan modifications typically resulted from offering the plans without properly documenting borrowers’ ability to pay. The large number of borrowers who needed assistance was also a problem for the bank’s servicers, “but we’ve gotten better and better as time has gone along,” he said.

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Did you know May is National Home Improvement Month?

Should you DIY or hire a pro?
NARI offers advice on deciding how to tackle projects during Home Improvement Month.
Des Plaines, Illinois, April 30, 2012—Since May is National Home Improvement Month, the National Association of the Remodeling Industry (NARI) offers homeowners advice before they tackle their spring projects: namely, whether to do-it-yourself (DIY) or hire a professional during the busy remodeling season.
According to a consumer poll from, the largest determining factor for deciding to DIY or hire a professional was cost, at 40 percent. Thirty percent of respondents placed project type and know-how as the second most important factor, and level of difficulty was close behind at 25 percent. Safety and length of time required to complete the project were last, with 2 and 3 percent respectively.
“Some of the biggest homeowner misconceptions are related to the three largest considerations: cost, difficulty and know-how,” says NARI National President Dean Herriges, MCR, CKBR, Urban Herriges & Sons Inc., based in Mukwonago, Wis. “Many believe that if they do-it-yourself, the cost will be greatly reduced. And most people also believe that the learning curve for home improvement is lower than it actually is.”
In reality, the home improvement process—though varied across project type—can be very costly and involved for anyone, not to mention a beginner. That’s why it’s important to weigh all considerations before you begin work to prevent a DIY disaster.
“There are a few basic questions that homeowners must consider before they start; otherwise, they will find themselves paying a professional even more money to fix multiple issues or, even worse, injured,” Herriges says.
The most important considerations for homeowners have to do with physical ability, skills, time and understanding of what needs to be.
“Oftentimes, people underestimate height and physical limitations like lifting or controlling heavy objects, or whether the job requires more than one person,” Herriges says. “When people attempt things that are beyond their ability, they open themselves up to injury.”
Herriges says that homeowners should have basic skills when it comes to using tools or knowing which tools are necessary, measuring, installing and following product manufacturer instructions.
He also says that homeowners should plan the process from beginning to end to ensure they have time to complete. “If you’re working on a bathroom, you need to map out a good time for you to be without a bathroom and how long those critical steps will take so you know when you will have a bathroom again,” he says.
And then homeowners should consider the costs. Permits, materials, time and costs associated with correcting mistakes must be factored into the total cost. “If you are doing the project yourself for financial reasons, you need to consider what it would take to correct mistakes that cause damage,” Herriges says. “Fixing a project is usually more expensive than hiring a professional to do the project the first time through, so it’s wise for homeowners to know what they are getting into and if the risk is worthwhile.”
Most homeowners can handle routine maintenance projects and cosmetic touch-ups, but it’s recommended they consult with qualified professionals for larger remodeling jobs and major changes to the home’s structure. Visit the NARI Website to access a DIY quiz, designed to help you decide whether you are going to need to hire a professional.
If you find out that you do need to hire a professional, hiring someone who is qualified and competent to do the work is just as important as preventing a DIY disaster. “You want to select someone that is certified or has professional experience working in the home improvement industry,” Herriges says.
As of April 22, 2010, the U.S. Environmental Protection Agency passed new regulations to address a lead safety concern in homes built before 1978. The Renovation, Repair and Painting (RRP) rule is designed to train professional remodelers how to minimize lead dust in the home to reduce exposure to children under 6 years and pregnant women. Remodel-ready homeowners should make themselves aware of lead-safe practices in their homes during a remodel, either by a professional or as a do-it-yourself practitioner, to keep their families safe. Please learn more at

Southern Ideal Home Show – Raleigh – Spring Friday April 13 – Sunday April 15 2012

Spring has sprung early and there is no time like the present to do some spring cleaning or better yet some Spring updating.  Whether you are looking for some fresh ideas or in the market for some quality home renovations please come out and see us at the Southern Ideal Home Show the weekend of April 13 – April 15.  The Masters will be over and this will be a prime opportunity to get the better half away from the big screen!

How about a new front porch?

Here is the newly created front porch on a very nice home in Cary, NC. The porch was added to solve several problems. The first was to re-direct water away from the front of the home so additional siding damage wouldn’t take place. The other is to make the entry more inviting. I think you will agree, the plan worked. In this photo the roofers are taking care of things and installing the standing seam metal roofing.

Drywall and stucco update on the Cary Bonus Room Project

And we have stucco.  The scaffolding came down today and all that is left to finish is the chimney which is on tap for tomorrow unless it rains.

The drywall is being finished.  The second floor is second coated.  One more coat tomorrow and then sanding.  They were finishing the drywall patches in the garage today.  Next week ceramic tile and interior trim – we are now 30 days from completion.

Below is a pretty cool progression of the outside

Blue Ribbon Renovation, Blue Ribbon Residential, Blue Ribbon Construction, John Sperath, Design Build Remodeling, Remodeling Raleigh, Remodeling triangle

Drywall and stucco update on the Cary Bonus Room Project

Drywall and Stucco pictures:  The drywall is being installed and over the next week it will be finished.  On the outside this is the first step in the stucco installation.  Since stucco is such a delicate product and because it is only as good as the installation (especially the waterproofing of the framing) the blue waterproofing is installed and then inspected by the manufacturer’s representative.  The guy on the scaffolding looked things over today and we have our certification letter in hand.  Now the stucco finish begins.  That will take about a week to do.  More photos to follow as the project moves forward.

Blue Ribbon Renovation, Blue Ribbon Residential, Blue Ribbon Construction, John Sperath, Design Build Remodeling, Remodeling Raleigh, Remodeling triangle

Designing a new project

First rendition of the plans for the family room addition with a laundry / entry renovation.  Perspectives and floor plans.  We’ll see tomorrow what the home owner thinks of the layout.   These are great remodeling project ideas, I could do this all day for Blue Ribbon.  I like the creative side of things.

Family room perspective – French doors lead to the living room

Floor plan, walls shown in blue are the original

Who wouldn’t want a mud room like this?

Laundry room addition with plenty of room for the ironing board with a view
Blue Ribbon Renovation, Blue Ribbon Residential, Blue Ribbon Construction, John Sperath, Design Build Remodeling, Remodeling Raleigh, Remodeling triangle

Cary Bonus Room Addition

Update on the progress of the Cary Bonus Room Addition by Blue Ribbon.  We have plumbing drain lines and tomorrow we’ll have water lines, then on to the inspection.  The cedar shingles for the roof should arrive tomorrow. 

Termite trails

Whoa, what a beam, in case of a storm, stand under here

Plumbing drain lines, water lines tomorrow

More termite trails, they really ate this house up, must have been tasty
Plumbing drains

The framing is nearly finished and OBTW, the framers uncovered significant termite damage at the entry way.  If there is water intrusion in the walls or around doors and windows this is the spot that termites love to hang out.

Blue Ribbon Renovation, Blue Ribbon Residential, Blue Ribbon Construction, John Sperath, Design Build Remodeling, Remodeling Raleigh, Remodeling triangle