We Don't Do House Calls

Here's a depressing story out of CNN. Turns out so many people are trying to get mortgage modifications from banks that their mortgage departments are overwhelmed, and people simply can't get through to even contact the bank.

Banks and lenders say that they have been overwhelmed with calls and that they're doing all they can to help ease the situation for Americans in distress. Some calls get sent to the homeowners' Hope Now hot line of 1-888-995-HOPE, funded by the lending industry as a resource to provide free counseling and foreclosure prevention help.

"Servicers are working hard to triage those calls and help borrowers," said Faith Schwartz, Hope Now's executive director. "We are working hard on that capacity issue. There a millions of people who want help, but there are also millions of people who don't need help but might call in on other issues. So I think servicers are dealing with extraordinary call volume."

Nearly 250,000 homeowners received either mortgage modifications or repayment plans from their lenders in February, according to Hope Now. Schwartz added that 3 million more Americans are 60 days past due on their mortgages and need help.

"I always say it's never enough, but do understand there has been a lot done, and I think [banks] are working hard to do a better job of communicating with their customers -- and we're trying to help people do that," she said.

And of course banks don't want to hire additional people right now when they are under intense pressure to cut costs. But the bottom line is that so many homeowners are drowning in underwater mortgages right now that lenders are swamped.

How many of these folks are going to simply walk away from their mortgages because they can't get help, because they can't even reach their lender? How much damage will this wreak on the housing market over the next year?

This morning I caught a discussion on the CBS Early Show about housing prices. The expert on the show was saying that "we won't see 2006 level prices again for ten years."

That seems painfully optimistic to me.