mortgage crisis

When Frustration Hurts the Cause

By Pam Marron | November 2016 | for National Mortgage Professional Magazine

On May 19th, 2016, I was appointed to the 1st Housing Counseling Federal Advisory Committee (HCFAC) under HUD. This committee, consisting of 12 members from the mortgage, real estate, housing counseling industries as well as consumers, was formed by HUD to find better ways for HUD counseling to assist consumers with sustainable home ownership. Our first meeting was in Washington, D.C. this week.

While in Washington, a visit to the U.S. Treasury was made to talk about a government 2nd mortgage idea that might allow a refinance for 3.2 million negative equity homeowners who have conventional 1st mortgages not covered by Fannie Mae or Freddie Mac and for negative equity 2nd mortgages and home equity lines of credit (HELOC). The idea could provide a refinance where none exists for those who are current on their mortgage and struggle to stay put in negative equity homes. Many negative equity homeowners have resetting interest only loans and most are just looking for some relief to a lower, fully amortized interest rate that allows equity to build while values return.

At the HCFAC meeting, representatives of top housing agencies that assist homeowners assembled on panels in front of us throughout the day. It was tough to contain disappointment after learning that pre-foreclosure housing counseling funds were gone from the 2017 budget. The aftermath of the housing recession was brought up in multiple conversations and I felt compelled to bring up that we can’t forget the 6.7 million homeowners who still have negative equity in their homes. I was determined to make sure that these people who were in top agencies would know “it wasn’t over yet”. The cringe on the face of a panelist after letting him know that most lenders still required negative equity homeowners to go delinquent before help is provided signaled that this probably wasn’t the first time he had heard this.

Being the bearer of bad news wasn’t what I intended to relay, especially when the direction was shifting to helping consumers purchase homes again.

But, then it turned. One of the panelists was with the National Foundation for Credit Counseling (NFCC). He talked about credit, acknowledging where we had come from and that there was still work to do.

It was then that my greatest frustration was realized:  the lack of attention to damaging current loss mitigation policy that knowingly harms credit built over a lifetime…. credit that is the benchmark of the mortgage and real estate industry and the driver of our economy.

Most homeowners trying to stay in negative equity homes refuse to go delinquent on their mortgage just to get a modification, often their only option available. Five years of trying to expose current policy of most lenders that requires mortgage delinquency first before help is offered is still unbelievable to many. Policy that destroys credit of those already in trouble, that has long term negative consequences and that is affecting a growing number of elderly homeowners can be changed. Allowing for a solution that promotes keeping credit intact with sustainable refinancing can allow responsible homeowners with negative equity to stay put in homes while values return.

Realization occurred that the best agencies who can help were in this room, and that the day before the Treasury had given good news on the forefront and provided valuable information and more contacts that might be able to help. I realized that something very valuable that will come out of getting this HCFAC committee of twelve from four different sectors of housing together. It is also clear that our task will not be easy.

There is still more to be done. The Freddie Mac automated system is turning down past short sellers, reading the short sale credit as a foreclosure, even after the four-year wait needed to get a new mortgage. The fact that loan originators must pay for rapid rescores when helping eliminate disputed accounts on credit has prompted delays on mortgage closings and has resulted in a lack of loan originators wanting to help correct this credit. Finally, patience to wait until after this contentious election is over in order to push forward on getting problems resolved has been short.

But, for the first time in years, progress feels attainable. We are going in the right direction. Stay tuned.

HUD Unveils New Housing Counseling Advisory Committee


The Department of Housing and Urban Development (HUD) has created a new advisory committee that will explore ways to make counseling more accessible for new homebuyers and troubled borrowers.

The Dodd-Frank Act of 2010 called for the creation of a 12-member advisory committee to improve housing counseling and develop innovative strategies to support community-based counseling agencies.

The Housing Counseling Federal Advisory Committee includes three representatives from each of the four mortgage, real estate, consumer and housing counseling sectors.

The committee members are slated to have their first meeting in August, according to committee member Pamela Marron from New Port Richey, Fla., a senior loan officer at Innovative Mortgage Services Inc.

“I’m in Florida, the land of underwater homes,” Marron said an interview Wednesday. She noted non-government-sponsored enterprise interest-only mortgages and home equity lines of credit are starting to reset and it is very difficult to refinance.

“I would tell them what is really happening at ground zero. And I am expecting the other members will have similar stories,” Marron said. “We have a good diverse group and I am excited about that.”

Read More…

Pam Marron, Mortgage Professional

HUD Names New Federal Housing Advisory Committee

Written by Brian Sullivan, (202) 708-0685

WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today named 12 persons who will constitute the first-ever Housing Counseling Federal Advisory Committee (HCFAC). Established under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, this advisory panel will help HUD’s Office of Housing Counseling improve upon all the efforts to provide consumers with the knowledge they need to make informed and lasting housing decisions.

Last April, HUD solicited nominations to serve on the first-ever federal advisory committee. Those selected hail from among mortgage, real estate, consumer and housing counseling sectors. They include:

Mortgage Sector
1.    Pamela Marron New Port Richey, Florida
2.    Linda Ayres Las Vegas, Nevada
3.    José Larry Garcia El Paso, Texas
Real Estate Sector
4.    E.J. Thomas New Albany, Ohio
5.    Cassie Hicks Hattiesburg, Mississippi
6.    Alejandro Becerra Silver Springs, Maryland
Consumer Sector
7.    Afreen Alam Long Island, New York
8.    Meg Burns Arlington, Virginia
9.    Ellie Pepper New York State, Schenectady, New York
Housing Counseling Sector
10.  Judy Hunter Sacramento, California
11.  Arthur Zeman Saint Louis, Missouri
12.  Terri Redmond Hummelstown, Pennsylvania

Read brief bios of the HCFAC members.

The Housing Counseling Federal Advisory Committee will explore new opportunities to expand access to HUD housing counseling programs, develop new innovative strategies to support community-based counseling agencies, and identify methods to leverage our resources to amplify the impact of federally funded housing counseling. This panel will also develop new metrics to evaluate the health and capacity of the housing counseling industry, specifically in the context of disaster recovery and identify ways to improve the use of technology in housing counseling.

By teaching consumers basic principles of housing and money management, HUD’s network of approximately 2,000 HUD-approved housing counseling agencies help families to improve their financial situation, address their current housing needs, and pursue their housing and financial goals over time. Housing counselors increase awareness of both rights and responsibilities of homeownership and rental tenancy, addressing fundamental concepts such as anti-discrimination laws, the types of ownership and tenancy, budgeting, affordability calculations, maintenance and upkeep responsibilities, eviction and homelessness prevention, and where to get help when future housing challenges arise. Housing counselors provide support to households facing unemployment, finding and maintaining housing after returning from military deployment, or moving their families because their current housing situation is unsustainable.

There are many ways to find a HUD-approved housing counseling agency. Visit HUD’s website or call 1-800-569-4287 for our interactive telephone directory. Get the free housing counseling i-phone app from the app store (not yet available for android). Watch HUD’s video on how housing counseling can help families find (and keep) housing.

Pam Marron, Mortgage Professional

Pam Marron Selected for Housing Counseling Federal Advisory Committee

Yesterday I received a letter from HUD Secretary Julian Castro that I have been selected to serve on the U.S. Department of Housing and Urban Development’s Housing Counseling Federal Advisory Committee.

Millions of homeowners across the U.S. have been devastated with lives changed forever due to the housing recession. I want you to know that it is your stories of challenges… how you plodded through even though you lost a great deal and did everything possible to stay afloat… before you finally had to ask for help… that changed my perspective on how I will do business in the mortgage industry forever.

Thank You, National Consumer Reporting Association!

Error of foreclosure placed on past short sale credit found in credit report code!

Renee Erickson, Acranet credit/NCRA board member, got the ball rolling….

Terry Clemans, NCRA Executive Director, wrote about this and took a group to Washington, D.C. to meet with U.S. Senator Bill Nelson, the Consumer Finance Protection Bureau (CFPB), and Director, Richard Cordray. 

Brian Webster, who was put in charge of getting the problem fixed. Mr. Clemans, and the NCRA also worked with Fannie Mae.

The NCRA has 64 credit reporting agencies across the U.S. that work with mortgage companies and consumers to “get credit right….

“Thank you, National Consumer Reporting Association, and for your continued efforts to help consumers…”

How the Consumer Financial Protection Bureau Helped!


The erroneous foreclosure code on past short seller credit was taken to the Consumer Financial Protection Bureau (CFPB). Senator Bill Nelson of Fl. demanded that the problem get fixed as it was affecting the state of Florida in a big way. The CFPB worked with Fannie Mae on a solution that came out on Nov. 16, 2013, but it did not work.

So, complaints started being placed with the CFPB on banks that would not change the credit code to other than a foreclosure….. and it worked!

It was also learned that in fact the code could be changed! On August, 16, 2014, Fannie Mae came out with a second workaround and changes have bee evident since then. The problem is still in the Freddie Mac system, but hopes are this will be corrected soon. Thank you to the Consumer Financial Protection Bureau (CFPB), Brian Webster with the CFPB, Fannie Mae, Senator Bill Nelson who got the ball rolling and pushed hard to get this problem resolved, and the National Consumer Reporting Association who took this to the CFPB in the 1st place and whose 64 members have been working diligently with mortgage consumers across the U.S.!

Hero… U.S. Senator Bill Nelson (D-FL) May 7, 2013

On May 7, 2013, Senator Bill Nelson of Florida took the problem of short seller credit being erroneously coded as a FORECLOSURE to the Senate hearing on “Credit: What Accuracy and Errors Mean to Consumers.” Senator Nelson is a true hero… and took on the problem of short sale credit erroneously coded as a foreclosure that resulted in a mortgage denial for eligible past short sellers. He demanded that the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) get this problem fixed in a Senate hearing on May 7, 2013. The Consumer Data Industry Association (CDIA) was also included in that hearing.

Thank You, Ken Harney of the Washington Post

For Short Sellers, Some Good News
Kenneth R. Harney, Washington Post – Sept. 6, 2013

Policy changes by two of the biggest players in the mortgage market could open doors to home purchases this fall by thousands of people who were hard hit by the housing bust and who thought they’d have to wait for years before owning again. Read More


Short Sales may be Treated like Foreclosure by Credit-Reporting Agencies
Kenneth R. Harney, Washington Post – May. 17, 2013

Are large numbers of homeowners who have negotiated short sales with lenders at risk because of a startling omission in the American credit system? Do their credit reports and scores indicate that they were foreclosed upon, rather than having negotiated a mutually agreeable resolution with their lender? Read More


A Public “Thank You!” to Fannie Mae and a Request for Conventional Hardship Counseling Certification for Past Short Sellers

A Public “Thank You!” to Fannie Mae and a Request for Conventional Hardship Counseling Certification for Past Short Sellers

Dear Mr. Watts;

First, Thank You to Fannie Mae for the August 16, 2014 Desktop Originator [1]”fix” that provides  for past short sale credit reported as a FORECLOSURE to be corrected! This allows thousands of eligible past short sellers to  re-enter the housing market!

There is another problem we need your help with: confusion of real hardship with strategic default.

Underwriters are now reviewing more borrowers  who had a past short sale. Many underwriters have a problem with the fact that the mortgage was on time and then all of a sudden went delinquent right before the short sale and  assume these folks were strategic defaulters. However, an overwhelming majority of underwater homeowners were told by their lenders that they could not receive help unless the mortgage was delinquent. A massive number of short sellers will tell you they went delinquent because it was the only option given to them by their lender to get a short sale approval. Further, it can be proven that a massive number of these folks stayed in their homes until they could not do so any longer.

Staying current was a struggle. Hardship is what forced the short sale.

In the midst of  the worst recession in U.S. history, many underwater homeowners wiped themselves out, emptying 401K’s and savings to stay afloat. The hardship was the circumstance that occurred when these folks were at the end of their rope, and had no option left except to short sale.

And, yes, there were those who took advantage of the system. But the great majority continued to make payments, expecting to gain back equity and eventually move on. However, there are areas across the U.S. where appreciation has not happened fast enough and life events have resulted in continued short sales for underwater homeowners (approximately [2]9.1 million per RealtyTrac in July  of 2014).

FHA has “Back to Work” Certification

The Federal Housing Authority (FHA) has a [3]”Back to Work” program, where those who have had a past short sale, foreclosure or bankruptcy can get a certificate from a HUD Approved Counselor where hardship existed and where  a 20% reduction in income was sustained for 6 months or more. In acceptable circumstances, a new FHA mortgage can be approved one year after the short sale, foreclosure or bankruptcy as another option to the three year wait required now.

Could FHFA allow a Hardship Certification from a HUD Approved Counseling Agency or Private Mortgage Insurance Company (PMI) for conventional mortgages?

Why? Because underwriters unfamiliar with problems surrounding short sales are turning down qualified conventional borrowers with extenuating circumstances at the two year mark after a short sale.

Real Hardship Examples

A husband loses his job after a brain aneurysm. The medical crisis causes the couple to file bankruptcy, but they continue to pay the mortgage on the wife’s salary alone. Soon, it is evident the husband will no longer be able to work. It takes 18 months to get Social Security Disability for him and the underwater home is put up for a short sale. The short sale takes almost two years with two contracts that fall apart due to the lengthy short sale process.  The employed wife struggles to make the house payments, wiping out the 401K’s of both her and her husband. The wife is told she must go delinquent in order to get a short sale approval, so she does. Two years later, the wife attempts a new mortgage. The underwriter turns her down, stating she made the mortgage payments after the bankruptcy. The wife asks, “how hard does my hardship have to be?”

Another couple kept their underwater property as a rental. Both moved to another state for jobs, rented out their home and paid monthly for  the difference between rent received and the mortgage payment. 401K’s and savings reserves were wiped out to cover the difference of funds needed. When they lost their final tenant, the options were to short sale or go into foreclosure, as all funds were depleted. They short sold the property.

Please allow trained HUD Counselors or PMI Underwriters to provide a certification for hardship to prove Extenuating Circumstances.

Lenders will not approve a short sale unless a hardship exists. Questioning hardship requires that borrowers must revisit a difficult time all over again. Allowing those trained with allowable criteria to determine real hardship and provide borrowers with an option to layout their story to an unbiased third party can make a difference in the growth of the housing market.


Pam Marron NMLS#246438

Florida Mortgage Broker


[1] Desktop Originator/Desktop Underwriter Release Notes/DU Version 9.1 August Update/June 17, 2014
[2] U.S. Homes Underwater Stalls at 9.1 Million in Second Quarter as Home Price Appreciation Slows in Many 24, 2014/RealtyTrac           
[3]Back to Work Program: Get Your Certificate