Caliber mortgage loan modification
Lone Star and its Caliber unit have become a magnet of criticism from housing advocates and housing lawyers who complain that the companies are too quick to foreclose on delinquent borrowers or to refuse to negotiate with borrowers over terms of plans to make loans more affordable.
The private equity firm's practices in dealing with delinquent borrowers was the subject of a recent front-page article in The New York Times.
In particular, critics have taken issue with Caliber's standard loan modification that temporarily reduces a borrower's payments for five years but then reverts back to the original payment terms in the sixth year, often with all the deferred payments added to the back end of the loan. The critics contend the temporary modifications merely enable Caliber to begin collecting payments on a loan that has been delinquent for many months or years, but provide no permanent relief to a borrower whose income has declined because of a financial crisis.
Ellie Pepper, an employee of the Empire Justice Center and regional coordinator for the attorney general's homeownership protection program, said the center had worked with a number of borrowers who have been presented with a temporary five-year loan modification from Caliber.