Denied By WAMU/CHASE BANK

[JLSHouston]

Hello, everyone..I'm currently been denied my "Making Home Affordable loan Program" after being on the program since July 09 with Chase Bank. My wife and I are pissed because on Nov 10th we were told are loan was going into permanent modification and wait for a negotiator to call and give you the terms. Get a notice on Nov 24th, stating we have insuffient income to qualify.!!!!! Not only that, call customer service to find out whats happening and we are being told that NOW WE ARE 4MONTHS BEHIND AND ABOUT TO GO INTO FORECLOSURE PROCESS. Are you SERIOUS!!!! We then get a notice from Chase Bank dating Nov 25th saying we owe $4300 and call immediately because we may qualify for a LOAN Modification!!!! Does anyone have a contact that can actually HELP. I can't believe they are doing this to us.....Thanks ahead of time for anyone's help......

[davephx]

IF too much income or not is easy to test.

Assume employed gross x 31% = affordable first mortgage PITI.

If that is less than your current mortgage too much income should not be the legitimate problem. Income can also be too low, but rest for too high first.

If 31% x gross is higher than your current 1st mortgage (including taxes and insurance) than they are right your income is too high.

[JLSHouston]

Is that employee gross based upon your monthly base pay, or does it include OT? I work a 12hr rotating shift in which shift differential plus overtime is built into your biweekly pay.

[davephx]

Total gross pay..they don't care the break-down.

In the final doc stage they usually require the last 3 pay stubs.

But obviously this could be unfair if not based on OT or lack thereof vs usual that happens in these last 3 periods.

[lisapops]

can anyone please help. I want to file a class action law suit against Chase. I am losing my home due to the fact that they denied my loan mod after giving me a temp loan mod. I have been forced to file bankruptcy. I am disgusted and pissed and want revenge.

[davephx]

can anyone please help. I want to file a class action law suit against Chase. I am losing my home due to the fact that they denied my loan mod after giving me a temp loan mod. I have been forced to file bankruptcy. I am disgusted and pissed and want revenge.

Suggested Guide if you are denied HAMP

Sorry if I am too detailed but I think it is important to know:
1) Who to blame overall for HAMP failure
2) What to do if denied
a) Evaluate reason and if HAMP followed should you have been denied
b) Know who your investor is
c) Who to "plea your case to"
3) Legal action against servicer

1) Who to blame overall for HAMP failure
First realize where the blame lies which is clearly not Obama, the regulators or most Democrats in Congress but the blame lies with the servicers.

Obama Admin and most Democrats in Congress on your side. Most Republicans are against you (HAMP a waste of money and what is needed is tax cuts for the wealthy). Regulators and Treasury very much for you but limited authority to help much other than shame and media pressure.

Sadly it seems many more modifications are being denied than approved. Treasury which predicted 50-75% approvals is doing everything it can to shame banks into making mods but they have no authority to enforce the rules. Now in desperation they have even sent in "swat teams" to the major banks trying to sort of look over the shoulders and pressure all they can to get qualified applicants off trials and into permanent modification. The media has done mostly a good job attacking the servicers who claims folks are not sending in paperwork and not making the trial payments (totally false in most cases by scads of reports both here and in the media).

At the Congressional hearing early December many Democratic Congress folks were visibly upset with lack of servicer performance converting trials. Some very aggressively drilled their representatives as well as the regulators with their limited capacity to do much. Treasury has threatened to withhold the first incentive payments on mods done and fine servicers if they don't approve a higher percentage of trials. If you read HAMP, the servicers have to be paid for mods, but it doesn't way when they have to be paid by Treasury. Lawyers have questioned if there is any authority to fine services.

Great Fortune Article 12/12/09 - Can Obama bully the bankers? It is about getting the banks to lend but its also related to the HAMP issue. Can Obama bully the bankers? - Dec. 12, 2009

Servicers make more money foreclosing than making mods. Its the investors (often taxpayers via the GSE's that take the loss. No loss to the servicer they just make more money on the foreclosure and resale.

2) What to do if denied
a) Evaluate reason and if HAMP followed should you have been denied

First I suggest testing if your denial was legitimate or not under the HAMP directives. You also need to get the servicer to tell you the reason for denial. This can be hard and often different people the same servicer tells you different reason which is ridiculous but that is what happens.. especially it seems with Chase.

Gross Income x 31% = affordable 1st Mortgage payment, including PITI, but not too low so can't amortize pi over 40 yrs at 2%.

That is the easy test, than it gets very murky since the biggest test after income is the Net Present Value. The more underwater you are the more likely to pass. It is rare to see anyone get HAMP if they have equity, although a rare few do.

b) Know who your investor is
If you are way underwater and think your income is neither too high or too low next you have to know who your investor is.

Here it is pure luck who would up owning your loan and the result can be the difference between keeping your home or not.

Many private investors will not agree to any modification, so there is nothing the servicer can do. Some foreign investors will often do nothing to modify, such as HSBC and ING.

Best is the GSE's that together own something like 70% of all 1sts mortgages
Fannie Mae seems to be the easiest to work with.
Freddie Mac next.
Ginna Mae which owns FHA has totally different rules and FHA-HAMP very different from regular HAMP which can be very good or very bad depending on individual situation. The biggest negative is the back end 55% test of all debt to income which is a modification killer for FHA-HAMP but only requires agreeing to counseling for regular HAMP.

How to you know who owns:
The servicer SHOULD tell you but often won't
If your FHA you probably know- the original mortgage papers etc I believe clearly show this.

For Fannie or Freddie you can look up by address and find out:
* www.fanniemae.com/homeaffordable
* Avoiding Foreclosure - Freddie Mac
On Freddie look in the upper right hand corner.

Your best luck of the draw is if owned by one of the above. They have their own programs in addition to HAMP. Each has different qualifications - just to make it all more complex.

c) Who to "plea your case to"

Try supervisors, managers units, executive units or whatever the servicer calls its departments higher than the modification folks. This sometimes works if you get the right helpful person. Amazing that at the same servicer some folks can help and others just say too bad.

For GSE's - you can contact them directly and "plea" as many have here some with success but of course depends on individual situation how far they can go.

I also suggest Hope for Homeowners 888-995-HOPE to give better idea if you really qualify or often will be very aggressive to find out from the servicer what is going on or why denied.

If the servicer is also the investor... chances vary dramatically depending because of differing rules. But we have seen in house modifications from most servicers who are also investors but also lots of denials and no one knows their criteria.

If you believe your denial was not in accordance with the HAMP guidelines sometimes regulators or even Congress folks have been helpful (Maxine Waters calling banks for constituents for example but such direct intervention is rare). But even without direct intervention it is ONLY CONGRESS that can make HAMP law changes or provide enforcement. Send your Congress folks your emotional pleas and let them hear our pain!! As I have in my mess since March 2009.

Controller of the Currency - Administrator of National Banks - actually in my earlier "beef" wrote my servicer with my complaint and the servicer replied back. It was initiated by my contacting my Senator McCains office and they forwarded it to them. They may not be able to intervene but it seems they can get the attention of a bank servicer since they regulate them. But they have no direct power to enforce HAMP. A link to use is Help and Frequently Asked Questions about National Banks from OCC's HelpWithMyBank.gov. They even gave me a case number.

NACA - Their solutions have saved homes with actually better terms than HAMP. But it is a long slog and can be very frustrating but so is dealing direct with the servicers. NACA's "iron clad legal agreements" are ignored mostly by servicers yet there have been some great amazing results... just too rare. Enduring a Save Your Dream mass session has resulted in some great results - just too rare.

HAMP was not suppose to be this complex or based on luck. If the directives were followed and the NPV test was done reasonably, it SHOULD be far easier to get final modifications!

3) Legal action against servicer
The bad news is we have no standing for a law suit, as the recently dismissed lawsuit in Minnesota showed. We have no legal entitlement to a modification.

The participant agreements are between the Treasury and the servicers, not us. We can not force performance in a contract we are not a party to. And sadly the HAMP law has no enforcement provisions.

[brasscupcakes]

Hi, Dave, this post is enormous helpful to me personally and would be to lots of others too. It should be a sticky but I don't know how one does that or even how to "star" posts. It's the most succinct explanation not just of legal standing but what you're up against as a borrower, which would be really helpful to know upfront. Thank you. Also, if you don't mind, can you help me understand the NPV worksheet a bit better? I'm not sure I understand future interest and advanced escrow. I thought it was remaining number months to mortgage multiplied by monthly interest and escrow. But that's thousands of dollars, and when I look at results some folks in post I haven't values higher than +/- 20K. If I'm right, then I pass NPV. But no other variable no matter what I enter even gets me close to passing (there's equity in my house). If I'm not right, and I go to NACA NY today as planned, make my improved case to Chase and get turned down again, am I forcing a decision that might help them foreclose faster? Sorry to ask so many questions, but I feel like I'm operating in a vacuum. Thanks, Amy

[brasscupcakes]

Dave, I just re-read my post and I'm not sure it even makes sense to me (I think I typed over part of the explanation). If you're still online, does it make sense to you? I would really appreciate your advice before I have to decide whether to leave for NACA.

Thanks!

[davephx]

I'm not sure I understand future interest and advanced escrow. If I'm not right, and I go to NACA NY today as planned, make my improved case to Chase and get turned down again, am I forcing a decision that might help them foreclose faster? Sorry to ask so many questions, but I feel like I'm operating in a vacuum. Thanks, Amy

Sorry I had to go to bed so missed your reply.

I have no idea about the future interest and escrow as I have not attempted to do the mod in box since we don't know the variables they use and I am hugely underwater which SHOULD help. I was told at some point by loan mod that I passed the NPV.. but time will tell.

Going to NACA should not hurt you - can only I believe.. help if your very lucky.

Assuming you made it your report would be of interest.

There are reports here of being told by Citi that they ignore the NACA solutions, as they have mine, yet they have a rep there or at least did in Phoenix.

[I-LOVE-MOEBEDARD]

There seems to be some difficulty lately getting through to NACA and I don't have a crystal ball to say why. I am with Chase, and they (the exec team) wouldn't talk with me because I'm with NACA. That said, though, after 11 months of alot of pushing I got a trial HAMP to start on 1/1/10 and I am glad NACA has my back right now. I wouldn't advise a newbie to start with NACA till they get whatever bugs they've got in the system fixed, but going to a STD event may get you somewhere. Just be ready for a long friggin day or two...... Good luck.