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What's hampering HAMP loan program?
Home Affordable Modification Program website for servicers
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TEXT OF INTERVIEW
Tess Vigeland: It is not often on this program that we urge you to make large purchases on credit, but let me tell you: This is the time to get a mortgage. Rates bottomed out this week to the lowest they've been since... bell bottoms, 1971. The average 30-year fixed is going for 4.69 percent. But, for those who already have mortgages and want help modifying them? Well this week the government said its Home Affordable Modification Program, or HAMP, has only helped about 340,000 people. Marketplace's Stacey Vanek-Smith joins us to talk about this. Hey, Stacey.
Stacey Vanek-Smith: Hi, Tess.
Vigeland: So this drop-out problem is looking pretty bad at this point. Do we have any idea why folks are leaving it?
Vanek-Smith: It is bad. More people have actually dropped out of the program than have gotten their loans modified.
Vigeland: Oh, that's not good.
Vanek-Smith: No. There are a few things going on here. Some people are dropping out because they're losing their jobs. Other people are so far underwater that they just don't want to invest any more money in their homes. There are some problems, though, with the actual program itself. Here's 52-year-old Susan Warner from Brooklyn Center, Minn.
Susan Warner: It was probably the most painful process I've ever gone through in my life.
Vigeland: Ah, I hear the start of a familiar horror story.
Vanek-Smith: Oh yes, you know it. Warner says she was on the phone with her bank every week. She kept talking to different people. She eventually did get a temporary reduction, but it was only a $60 reduction. And eventually she ended up being disqualified from the longer-term program because they said her debt-to-income ratio wasn't high enough.
Warner: It was kind of torturous, to never know, you know, per month, even to make plans. And I thought I was ahead of the curve. And then four months later, you're smack in it.
Vigeland: You know, Stacey, this is I think a very common experience for folks who are trying to get their mortgages modified. These stories come in over the transom and they're all the same -- my bank doesn't know what it's doing and it's taken me forever to get anything done, so I give up!
Vanek-Smith: Yeah, HAMP has been notoriously disorganized. The process isn't streamlined and it's not mandatory. The banks really don't have much of an incentive to put the systems in place to make this work.
Vigeland: Well, any success stories that you've heard?
Vanek-Smith: Yes, we do have some success stories. I talked to 45-year-old Jo Ann Tesar, she lives in St. Paul. She was paying about $1,400 a month and she got that down to just $900 a month. She actually says she was a little frustrated with the bad rap that the program's gotten because she says it helped her save her house.
Jo Ann Tesar: We forget that there's thousands of people that is has helped. I still have a backyard for my grand-kids to play in. I still have home base for all three of my grown kids. That's what it means to me.
Vigeland: Are there other options for people who are falling behind their mortgages if they cannot get through the HAMP program or any other government assistance?
Vanek-Smith: Yeah, there's another government program that's coming online in the fall. It's called the Principal Reduction Alternative, or PRA. It will actually reduce the principal on your mortgage, not just the monthly payments. So the loan will actually be reset down closer to the current value of the homes.
Vigeland: And that's something that economists have been pushing for, for quite a while?
Vanek-Smith: Yes and, in fact, housing economist Christopher Thornberg thinks this program's actually going to work much better.
Christopher Thornberg: They're getting people back to a zero equity position as opposed to a negative equity position. It's a better program than what they just put into place.
It is going to be first-come, first-serve though, so people should be ready. If you're not eligible for PRA, sites like ModifyMyMortgage.com can help you figure something else out hopefully.
Vigeland: Stacey Vanek-Smith, thanks so much for helping us out today.
Vanek-Smith: Thank you, Tess.
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for a year and one half i have applied for modification with ASC,america servicing company,(servicing a private investor). this was a nightmare. hundreds of hours on the phone, "lost" documents, sending requests for property tax info. to ??????. major blunders, only to tell me to reapply again and again. hamp program was a waste. no help out there. they have now increased my mortgage by over 400.00/ mo. i borrowed and begged and took every last cent i had to get caught up. i am barely surviving. what these companies are doing is criminal!
After several paper chase requests for a loan modification, due to some reason or another from Chase Bank I gave up. I had a 11% 30 year fixed rate mortage with a three percent prepenalty on it. My mortage with taxes alone was over $3100.00 a month. I lost 30% of my homes value, due to the poor economy and I filed for a Chapter 7 bankruptcy protection. Now Chase is chasing me to start the modification process all over with a 90 day payment plan with no modification guarantee's that it will be approved. If I do cooperate with their requested paln, then I lose my Chapter 7 protection. Caution.....If you agree to work with them on their terms you may lose. The new Bankruptcy laws have changed. You can only file a Chapter 7 ever 8 years. And they know it. The US Senate did not pass any new laws given the Federal Bankruptcy judges the power to modify any prime resident mortage loans, but they can modify investment propertys and Summer Beach rentals. Go Figure???????
Could all of these folks with Chase Bank mortgages get together with a lawyer under a class action to help them out? I have a relative with a Chase mortgage in a similar situation - Underwater on a devalued home, Good credit, good job but can't qualify for re-evaluation for some dumb reason. These are the home-owners who did all the right things initially, but now are caught BECAUSE they didn't buy beyond their means or miss payments. Something is wrong here.
HAMP is not disorganized, or "not streamlined" ... the runarounds are not due to the Great Burden of hiring and training reps to administer billions of government bailout money. They are, from my nightmare experience, a strategic maneuver so banks can just write off bad debt. In most cases, it's more profitable to foreclose and they abuse people by stringing them along. My servicer, Wells Fargo, ignored my budget numbers and padded it with their own, including old, closed loans, so I would not qualify. I took down everything the rep said that day on the phone, and when I demanded a copy of my file, guess what? Her supervisor told me I'd have to sue them, and subpeona the docs, because they are the property of Wells Fargo.
The PRA program sounds great, in theory. Our administration has given us just words. Why give people false hope with another bogus program?
Ihave been trying to modify my loan with Chase for 1.25 yrs...they string me out..offered me a forebarance while they evaluate my eligibility, meanwhile trash my credit, give me no date they will even give me an answer regarding my eligibilty. Then ask me to resubmit all documentation. It is a nightmare,and a series of engineered games they play with people's lives. Very tragic, and malevolent.
Making homes affordable Chase Scam:
Making Home Affordable is a government program that, if approved by the government, a homeowner can then apply to their mortgage holder to have the monthly payments of their mortgage lowered to 31% of their income. The homeowner still owes the same amount, but the amount paid back per month is income sensitive.
But I suspect folks over at Chase have been reading a lot of Kafka lately and they’ve been inspired to new heights of brilliance in order to escape ever having to actually grant an MHA modification. They simply construct ways to lose paperwork. It’s so elegant in its simplicity yet its baffled and then destroyed thousands of people’s lives who were diligently trying to provide the required papers.
These people are caught in a terrible loop of Chase "losing Documentation" and making people continually re-send in forms. FOR YEARS. We even had a mortgage specialist at a Chase bank branch check all of our paperwork and fax them to the appropriate place only to have them claim they didn't receive all the required information.
One gorgeous example of the devious cleverness of Chase is a scam based on their own bank statement paperwork. Please admire its Kafka-esque brilliance.
On Chase bank statements the last page always reads "left intentionally blank" but they do not number this last page. For example, a Chase account may have 6 pages and all the pages say, i.e., 1 of 6, 2 of 6, et cetera, but page 6, the blank one, is not numbered 6 of 6. We have been continually turned down for an MHA because we are not sending them, Chase- holder of our mortgage and the bank where we have our accounts- complete bank statements even though we do send them that 6th page. Since it doesn't say 6 of 6 they claim our application isn't complete and make us start all over from the very beginning. We’re only going on Month 7 in the Chase Paper chase. Evidently that's nothing, most people who have tried have been trying for twice this long. Many, many people have already lost their homes because of this scam.
There are some websites devoted to this issue with Chase bank. Speculation is that they string people along who believe they might actually receive a modification so that they continue to pay a little longer before the inevitable foreclosure.
the websight Propublica is doing a great job tracking this issue.
Making homes affordable Chase Scam:
Making Home Affordable is a government program that, if approved by the government, a homeowner can then apply to their mortgage holder to have the monthly payments of their mortgage lowered to 31% of their income. The homeowner still owes the same amount, but the amount paid back per month is income sensitive.
But I suspect folks over at Chase have been reading a lot of Kafka lately and they’ve been inspired to new heights of brilliance in order to escape ever having to actually grant an MHA modification. They simply construct ways to lose paperwork. It’s so elegant in its simplicity yet its baffled and then destroyed thousands of people’s lives who were diligently trying to provide the required papers.
These people are caught in a terrible loop of Chase "losing Documentation" and making people continually re-send in forms. FOR YEARS. We even had a mortgage specialist at a Chase bank branch check all of our paperwork and fax them to the appropriate place only to have them claim they didn't receive all the required information.
One gorgeous example of the devious cleverness of Chase is a scam based on their own bank statement paperwork. Please admire its Kafka-esque brilliance.
On Chase bank statements the last page always reads "left intentionally blank" but they do not number this last page. For example, a Chase account may have 6 pages and all the pages say, i.e., 1 of 6, 2 of 6, et cetera, but page 6, the blank one, is not numbered 6 of 6. We have been continually turned down for an MHA because we are not sending them, Chase- holder of our mortgage and the bank where we have our accounts- complete bank statements even though we do send them that 6th page. Since it doesn't say 6 of 6 they claim our application isn't complete and make us start all over from the very beginning. We’re only going on Month 7 in the Chase Paper chase. Evidently that's nothing, most people who have tried have been trying for twice this long. Many, many people have already lost their homes because of this scam.
There are some websites devoted to this issue with Chase bank. Speculation is that they string people along who believe they might actually receive a modification so that they continue to pay a little longer before the inevitable foreclosure.
the websight Propublica is doing a great job tracking this issue.
I was disappointed in Vanek-Smith's comment: "Yeah, HAMP has been notoriously disorganized. The process isn't streamlined and it's not mandatory. "
I don't know about HAMP but let me tell you about a nightmare bank to deal with: Wells Fargo.
My experience is with Wells Fargo, wherein not just once, but twice, they closed my file after the 45 day deadline to complete documentation because of "lack of documentation". In both cases the lack of documentation was 100% due to their not telling (not by phone, email, snail mail, or smoke signals!) me there was deficiency in the documentation.
Most recently, on June 22nd, I had finally gotten through to my processor, after repeated attempts and messages left on his voice mail, to hear "We closed your file 2 days ago due to lack of documentation. You did not fill in the Size of Household field on your original application and we needed that information." My question "Wells Fargo had that paperwork for 45 days and NEVER ONCE told me I had not filled in that field? Why not?" was met with: "I don't know ma'am but your file is closed and you can call Loss Mitigation and start all over again." Great. The woman in Loss Mitigation told me they are responsible for reviewing the original application within 10 days of receipt and advising the homeowner of any missing information. She said she didn't have a clue why no one told me (over the 20+ phone conversations with various reps since April 22nd) and she could send me a packet and I could start all over again.
So my point is, no matter how well or badly organized HAMP is, if the &%^#*! bank can't or won't communicate to keep the process flowing but are only too happy to "close the file" - why should I believe this third attempt will be any different?
I am not even arguing with them yet about approving or denying a mod, I just would like to get through the initial application process without Wells Fargo screwing up and then closing my file after the 45 day deadline!!
Where is the advocacy? To whom do I appeal? I have now contacted a well-known plaintiff's attorney law firm in Alabama who are working with a number of folks who cannot seem to penetrate the morass that is Wells Fargo ... we'll see what happens!
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