Homeowners: "Hey Congress, Get Off Your A**"
Richard Neiman, in his Congressional Oversight Panel report, called Treasury's goal for home loan modifications at 25,000 modifications a week "robust." By those calculations there should be close to 300,000 homeowners with loan modifications today. Truth is, they're about 298,000 short.
Despite the apparent failure, last week Ocwen Financial threw themselves a little party for holding 770 of the 1170 successfully completed loan modifications since April. That's a little like getting an ata-boy award for coming home with a "D" on your report card.
Over the weekend Bank of America announced that it had enrolled 125,000 homeowners in the HAMP trial period. Considering Treasury's demand that the banks come up with a collective 500,000 by November, that's like starting your homework at 11PM on a Sunday night.
In reality, since the program's introduction in March, banks and loan servicers have done very little when it comes to follow through. There's very little incentive, oversight, and accountability when it comes to the actual paperwork.
The actual NPV (Net Present Value) test to determine rates is still a secret and eludes most people. Lenders don't have to provide any reason for denying the modification once the three month trial period is completed. In many cases a modification can actually increase the monthly payments. So much for transparency.
The majority of the offers are nothing more than a plan to keep homeowners in debt and a state of bondage for years to come, according to Brent T. White of the James E. Rogers College of Law. Attorney Walter Hackett writes on his blog Livinglies how "a homeowner will be offered a 'workout' that can result in the homeowner being 'worked out' of his or her home." He explains it in his post.
Thousands of frustrated and frightened homeowners have posted their stories on blogs and forums like givemebackmycredit.com or Loansafe.org, a community of over 20,000 homeowners getting together to save their homes and turn to each other because there's no where else to turn.
In her post, one of Loansafe.org's members, Teresa Beougher, writes:
Your Credit and Debt cycle will be coming to a halt soon enough. Once upon a time FICO meant something to people, but as the days pass and information is spread thru out the Social Networks that you so blatantly ignore, FICO will be little more than a nasty four letter word in the coming days. You have pushed us aside for the last time. The Government has offered "Making Homes Affordable" which is nothing more than another stimulus package for and industry that is well over padded to begin with. You sit and spin your lies, half truths and all the while, you expect us to just continue to pay for something that you inevitably plan to take anyway in the end.
Our fearless leaders and elected officials don't really seem to have much to say when it comes to hundreds of foreclosures a week - and that's just in their own districts.
Congress's apparent strategy in dealing with this is to sit back and let it sort itself out. Remember when the banks were telling us that? That Americans were a tough bunch and they would find a way to save their own homes by getting second jobs, turning down the heat, and not sending their kids to college? That if they really wanted to keep their homes they would find a way to pay and pitch in for the $38 billion in bonuses bankers needed to give themselves.
My wife and I have been in this struggle for over a year. We've been scammed, berated, conned, and pushed aside every step of the way. When we reached out relentlessly to Massachusetts Attorney General Martha Coakley, we received a form letter explaining how busy she is. Rep. John Tierney's office left a voice mail saying, "I didn't realize you required or expected some kind of action." Barney Frank, John Kerry, and the rest sent us back to Tierney.
So, while the banks, servicers, and lenders are waiting for American tenacity to kick in and pay up and Congress is working hard to keep their "campaign contributions" coming some American's are banding together to help each other and telling Congress to get to work.
The members at Loansafe.org have put together a petition demanding that Congress take action:
We propose an immediate halt to all foreclosures until new, mandatory guidelines are established and that these guidelines be overseen by a new Consumer Protection Agency, which was recently recommended by President Obama and endorsed by Sheila Bair, chair of the FDIC. We also demand that these guidelines include not only a simple 31% of the borrower's gross monthly income, but that the Net Present Value (NPV) test: (a) be created and administered by the government, not the banks, (b) have its data, assumptions and formula published so that they may be verified by the public, and (c) be made available at www.makinghomeaffordable.gov in a calculator form so that people can learn immediately, with the other eligibility questions available there now, whether they're eligible for HAMP. We are also strongly advocating that additional guidelines be formulated that would open the door for modifications at an even a lower rate in significant hardship conditions and for writedowns of principal when homes are severely underwater.
Without oversight and regulation banks and servicers will continue to pillage as they've been allowed to do for years. Hardworking and previously trusting families will be thrown out of their homes or left to pay for a home that has lost most of its investment due to artificially inflated values. Even with what's being laughingly called a modification families are still left strapped with no way out.
The petition continues:
There is documented evidence that the current system is not working, as reflected in the rising foreclosure rates across the nation and the thousands of people who attend NACA "Save the Dream" events in an attempt to get their loans modified. There is ample evidence that the current HAMP and other modification guidelines are being interpreted differently by each bank, reflected in many places including the scenarios described by the 20,000+ members of the loansafe.org community. Additional evidence can be found in hundreds if not thousands of complaints and requests for assistance sent by struggling homeowners to their Senators and Congressmen across the country, as well as the Office of the Comptroller of the Currency and other agencies that have been instituted to regulate these banks.
By now, you probably know someone in your family, neighborhood, or at work who is struggling to keep their home. You've also probably figured out that they aren't losing it because they were greedy, as the banks would like us to think. If you don't know someone now, chances are in the coming months you will. According to many analysts a second and third wave is coming. Now is the time to act.
As one homeowner and member of Loansafe.org wrote on my site:
The HAMP programs initiated with great intent by our President, in an unfortunate circumstance of time, are being played over by our banks. Banks deny modifications for unreasonable reasons (one of the latest received by many is "Your Hardship is not a permanent situation.") Homes are being foreclosed on in the middle of trial modifications. Other homeowners are being offered a new loan ABOVE their original mortgage agreement. The banks are getting funded for trial modifications, but have no one overseeing their efforts in modification permanency. The program is not working as intended.It is time to save the American Dream, and get Wall Street out of Main Street!
Click here to sign the petition.
read more at www.shitheadery.com
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I have had nothing but the run around with B of A. My hubby lost his job and we lost a lot in our retirement, savings account and fell behind. I called B of A weekly, (beginning in January) and was finally offered a loan mod. Received the paperwork, in July, with first payment due September 1st, included the required contribution for the title search as ordered, signed and returned. Three months go by, and I continue to call as I've been making the payments.... and today, I get a call from our new "loan account manager" and he said that the previous loan mod was DENIED! After we signed and sent in the acceptance AND made the payments. He claims we had to pay $4k in mortgage contribution funds, though nowhere on any paperwork did it ask for anything other than $125. He and I go round and he then asks me if I want his help or not? He needs to look at the paperwork. I then inquire about the Obama plan and he tells me he knows nothing about it! Claims the "government notifies B of A as to who is accepted for it." I feel I am on Candid Camera or something. Nobody at this bank knows anything. I have pages and pages of notes with names and dates on them, and everytime I talk to somebody the story is completely different!
http://www.nytimes.com/2009/10/09/business/09home.html?pagewanted=all
what about this article saying 500, 000 homeowners have been helped
yes what about it? You should read it.
2nd paragraph:
"Five hundred thousand troubled homeowners have had their loan payments lowered on a trial basis under the Making Home Affordable Program."
Then read about how many of those "trial" payments are denied for no reason. The Making Home Affordable program has yielded hardly any permanent modifications.
FANTASTIC ARTICLE! I recently wrote the Huff Post to see if they would be interested in doing a foIlow-up article pertaining to an article they published in Feb. '09 about Jamie Dimon, the CEO of JP Morgan Chase but have yet to receive a response. I also sent a message to you Richard on your personal Twitter page regarding this. I hope you can help by writing about the situation. Keep it up & good luck with your home!
Thank You, Richard. I have been in this fight for 13 months now. This is an epidemic that must be stopped!
Loansafe Member
I have been trying to work with WaMu (Chase) for the past 8 months on a modification.
Starting in Jan 08 with a 40% cut in pay and with that in mind I called WaMu in Oct 08 and advised them with my lower income I was using my savings to pay the mortgage. I will in the near future have trouble with my mortgage payment. It took four months just to get an answer that I would be considered for a modification. I sent in all the paperwork three times including tax returns and any docs they requested. I call each week and have spoke with many at WaMu only to get a different answer on my status each time! It is now May and WaMu Chase has deceided that a three month trial period payments of 2,319.50) would be in order for me to qualify for a modification. I made all three payments on time and was told after the third payment my modification payment would be the same as the Trial payment, and my new modified loan would start in Oct. 09. I got a phone call two weeks later and was told "I never should have been told about that payment" and was no longer in effect. Reducing the rate to 2.50% without reducing the principle and WOW a solution!!
I have the same payment with late fees on top of my principle and the house is worth 100K less than what I owe!
My husband and I have been on a modification trial period for the past 4 months through PHH Mortgage. We have been sending them everything they requested. Less than 2 weeks ago we were told over the phone that our modification was approved and we would receive all the paperwork in a couple days. They told us all the details of what our payments would be. We were so happy!
A few days passed - nothing came. They said we needed to make the final trial payment first, so we did that.
On Tuesday we received a call that our modification was denied! We spent hours on the phone being transferred to people who could not explain why. Finally someone who told us the paperwork we faxed in proving my income had somehow gone missing. Without this we don't make enough money to qualify. She told us that PHH has their own modifications we can apply for.
We don't want any modifications from PHH. We are eligible for the modification through the government.
After doing some research, we contacted the Homeowner’s HOPE Hotline at (888) 995-HOPE from the makinghomeaffordable.gov website. They are investigating why PHH is now denying our modification.
Today we received a letter from PHH that they intend to foreclose our house. We still have the original paperwork that says they cannot foreclose if we make the payments during our trial period. We have never missed a payment.
PHH is scamming us!
Has anyone had luck and been approved for a modification with PHH?
My husband and I have been trying to get a modification from Chase since Nov 2008. We have made our 5th trial payment and faxed our paperwork 5 times. This is ridiculous. We are at the mercy of the banks and there is nothing we can do about it. The government needs to get off it's A** and start enforcing HAMP directives. Without enforcement millions will lose their homes and be living on the streets.
This type of article with national exposure needs to be written everyday or at least once a week. Please keep our struggle in the forefront. I have a feeling that it is business as usual for the banks since they are making record profits with not an ounce of new regulations. Foreclosure rates are on the rise. Please keep writing these articles, don't let us fall into the shadows.
As a taxpayer who helped to bailout the banks, I expect to have my mortgage modified. I am not against renters getting tax relief as well. Some of my friends and relatives rent homes and apartments, and I know they are getting ripped off at income tax time. However, that does not have anything to do with the Making Homes Affordable Program. The government bailed out the banks' mortgage mess with TARP money which was to be applied to modification of mortgages in trouble. The fact is that the banks are hoarding the money instead of using it as it was intended. Defending the banks just because you happen to be currently renting is really pointless. If you are so upset about your unfair tax situation, why don't you write your own petition and create your own website?
More Links of Interest courtesy of Stop! Mortgage Servicers
Find stories from homeowners at Denise Richardson's site:
http://www.givemebackmycredit.com/blog/2009/11/petition-urging-congress-to-re.html
Sign the petition to mandate mortgage statements:
http://www.givemebackmycredit.com/richardson-petition.htm
If you are in Florida on November 21, come to the National Consumer Expo to meet with other fed up homeowners:
http://www.givemebackmycredit.com/blog/expo.pdf
Read the National Consumer Law Center's report on mortgage servicers:
http://www.consumerlaw.org/issues/mortgage_servicing/content/Servicer-Report1009.pdf
Read a summary of part of this report here:
http://www.stopmortgageservicers.org/wp-content/uploads/2009/10/10_easy_steps_to_being_a_MS.htm
Sign the Petitions at STOP! Mortgage Servicers:
http://www.stopmortgageservicers.org/?page_id=34
WOW! Thank you for writing this post! I urge everyone to read the latest report from the National Consumer Law Center on the Puzzling Behavior of Mortgage Servicers. Mortgage servicers are never going to start modifying loans until their entire incentive structure and business model is turned on its' head. And Congress and Obama aren't ever going to do anything about this foreclosure crisis. I too have written tons of letters and sent petitions to many of our politicians to no avail. Most of the time I just get shuffled back and forth and the most common reply is, "not my area and not my problem." Time has already run out for me, my house foreclosed in August 2009. I tried for a year to get a short sale approved since my house was underwater and PHH mortgage just played around with me until they decided to foreclose and get a big payday for themselves.
We need to organize a march on Washington or something. No one seems to care if they get a letter or a petition. We need to figure out a way to actually get someone not only to listen to us but to do something.
In my tiny way, I am also trying to promote regulation of mortgage servicers and I have petitions to sign as well! www.stopmortgageservicers.org
Even with legal representation, and a Countrywide loan flip scenario (complete with falsified income statements), we remain at the mercy of Freddie/BAC. Our sale is due at Christmas, and it is unclear if the attorney can even stop the sale-----this must be what death row inmates go through----one day at a time---but the clock keeps ticking. At first, it was 4 months. Now just less than 2 months to go. Tick, tick, tick.
We are both permanently disabled chronic pain patients. I guess it's a good thing I have a large supply of morphine, vicoden, and valium on hand.
Many thanks for the coverage.
Thank you for writing this article. If the banks were penalized for not providing qualified homeowners with modified loan payments, we might see some more modifications. There are no consequences for the bank's flagrant disregard of the Treasury's directives. The banks were told they would take taxpayer money and then no policing authority created. Sounds just like most government programs. If the President's intent with Home Affordable Modification Program was to stabilize the economy and keep Americans in their homes, it is falling. Unless something is done via revision to the current legislation, this will continue to happen. This is not simply a problem for homeowners, it is a problem for all Americans. For those of you who are not in the position of struggling to make your payments, you too are effected. Unless the banks volunteer to give the money back to the government, you too could make a difference in this country by taking a stance and at the least, insist that the banks do what they should do, give the money back to the taxpaying citizens in an attempt to stabilize the economy.
this is important not only for hte homeowners (like me) who have been trying for months and months to get a mod. It is important for our kids and grandkids. My loan went from the original broker to another bank and now is owned by a foreign bank, Deutsche. I only found this out through tenaciously asking and asking my servicer, Chase. Now I'm learning more and more about Deutsche, a FOREIGN BANK, which apparently is not prone to granting modifications,and that they have at times been brutal in their foreclosures. Okay so what is wrong with this picture? As powerful as our banks are (and I am not a fan of this power), a FOREIGN bank can tell JPMorgan Chase to foreclose..... and they have to? There are upwards of 18% of the mortgages inthis country owned by this foreign bank. How did this happen? No one ever asked me if I could let a foregn bank control my life. We need a moratorium on all foreclosures - NOW. If we don't fix this, and if we let the banks have this power and let foreign companies securitize our homes and then take them when we get in trouble then we are nothing. and our kids are nothing. and our grandkids are nothing. But we all know this isn't true, SO WE NEED THIS TO CHANGE NOW!
Talk about adding insult to injury! As if it's not bad enough that your servicer won't do the responsible thing and modify your loan, then you discover a foreign bank owns your home! I'm in the same boat. Hong Kong Shanghai Bank Corp. (HSBC) owns my home, and they aren't in the modification business, either. Disgraceful, isn't it?
part 2
I was then told I would be forced to refinance my house...one marauder actually held a loaded pistol to my head. When I finally said I would consider their offer, they pulled out a one page document with a glowing list of only benefits...low interest rates, interest only payments, no equity required...when I asked to see the rest of the documents, they said "absolutely not." When I asked if I could have my attorney look at it, they said "absolutely not." I said I didn't want to sign it, and they took my bound hand and forcibly signed my name on the dotted line...then they said....that's it...we are closed. I never had a chance to read the documents, have my attorney review it or think about or discuss whether I could afford all the terms of this new deal because I never ever got a chance to review the terms....THOSE BASTARDS FORCED IT DOWN MY THROAT AND I HAD NO ABILITY TO WEIGH THE RISKS OR MY OWN ACCOUNTABILITY.
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