Open Letter to President Obama: Systemic LENDER MENDACITY in his MFA/HAMP Programs

[Civic Sam]

Hello all,

Here’s a link to a letter to the President that I wrote as an at-risk homeowner whose HAMP application is being processed by GMAC. It offers a pretty comprehensive account of GMAC’s rigged application process.
Here’s an excerpt:

Mr. President, you have heard, I am sure, that HAMP information being supplied to hundreds of thousands of HAMP applicants by participating HAMP lenders is seldom accurate. Over the past 14 months, I have found that GMAC’s inaccuracy on this score is no accident, but deliberate and carefully implemented. It fuels a rigged HAMP application process that GMAC has created in order to draw qualified HAMP applicants into the application process before denying them modifications. To implement this process, GMAC has trained its customer service agents to constantly profess adherence to HAMP guidelines even as agents give HAMP applicants a series of guidelines that are of GMAC’s own devising. After engaging homeowners in its HAMP application process, GMAC then introduces sets of conflicting guidelines that lead in the end to summary rejections a homeowner’s repeated requests for a HAMP modification.

I'd like to hear from fellow HAMP applicants, whether or not your HAMP experience has been similar to mine. I want to know just how accurate or inaccurate my letter to the President is.

I also maintain a HAMP diary at Daily Kos.

Thanks for taking a look and good luck everyone,

Steve Sewall (Civic Sam)

[MyHAMP]

Sounds accurate to me. Although I'm not with GMAC, I can tell you that during our trial, we once were advised to NOT make a trial-payment since it "was already paid in advance". We still paid it ang guess what? It actually WASN'T paid in advance!

[goldie]

Hello all,

Here’s a link to a letter to the President that I wrote as an at-risk homeowner whose HAMP application is being processed by GMAC. It offers a pretty comprehensive account of GMAC’s rigged application process.
Here’s an excerpt:



I'd like to hear from fellow HAMP applicants, whether or not your HAMP experience has been similar to mine. I want to know just how accurate or inaccurate my letter to the President is.

I also maintain a HAMP diary at Daily Kos.

Thanks for taking a look and good luck everyone,

Steve Sewall (Civic Sam)

You might think about complaining to MHA Compliance, Fannie/Freddie (if applicable), FDIC, SIGTARP, Treasury, OCC, if you haven't already. Yes, it is totally rigged. The servicers profit more from keeping your loan in a constant state of delinquency for as long as possible (capitalizing on arrearages). Even though this article is from 04/10 its great at explaining it all...

HAMP is there Hope or is it Hopeless?

[Civic Sam]

THANKS. great article. good suggestions.

[davephx]

Most all servicers are playing the game to keep on trials as long as possible and not doing mods other than for maybe 10%.

Sadly there is no way to enforce HAMP since it is not a law. The regulators have tied to beg, scream and expose by the monthly reports to shame then into doing more modes. But there is no way to force them - only Congress can make laws and HAMP is not a law.

[Civic Sam]

Thanks! I have incorporated your thought into the latest version of my letter to the President. I have worked my ass off on this letter with the hope it will speaks for millions of MFA applicants. It now endoreses the Loansafe (?) Petition to the US Government.

As time permits, I am circulating it to housing reporters and public officials.

Thanks again! Steve

[davephx]

The President knows all these issues as does Congress but nothing they can do about it with the Republican block in the Senate.

It has been topic of often heated angry discussions by Democrats now in 3 Congressional hearings over the past two years. If you hear the CSPAN video at times very heated. Lots of upset Democrats with R's just saying the banks are doing such a great job with their own in house not the worthless HAMP programs. They claim we don't send in doc, don't qualify and need to be renters not be on trials for loans we can not afford.

In the heated discussion the frustration is there is no way for Treasury to enforce HAMP ( required under TARP but most repaid TARP loans).

Most lawsuits have been tossed since we have no standing with the HAMP participation agreements between the Treasury and servicers. A few are pending using a different approach based on deception etc and some seek class action treatment. But this will take years to resolve in the Courts and doesn't help stopping foreclosure sales now.

Here is why after being bailed out they still want to screw us:

The banks and servicers have made an estimated $4 billion by offering struggling homeowners the false hope of a modification, collecting the trial payments for three to eight months, and inevitably foreclosing with the addition of late fees, fines, back payments, and foreclosure costs passed on to the homeowner.

We had hoped all the media attention both nationally and locally in media all over the U.S. In Phoenix we had huge series on Phoenix TV for months about how people are so badly treated by servicers_ but the profit motive of banks is stronger than the screwing homeowners by not following the HAMP directives. More and more media is picking up on this. But the Republicans counter it with their usual lies and deceptions of how well the banks do if just don't have to bother with HAMP.

I am at a loss for a solution. Obama and Treasury seem to realize their is nothing more they can do to get compliance and spin it basted on how it is SUPPOSE to be if HAMP directives were followed and ignore that they are not - maybe because there is nothing they can do without a law which the R's will of course block in the Senate.

And the R's do a great PR job blaming those that can do nothing about it for R's political gains with so many folks that believe their lies and deceptions.

[auroraproblem]

I would take the advice posted higher above about the agencies to file that complaint with.

Despite the claims of R this and D that (which quite frankly are delusional at best, hoping that one or the other is to blame so that false hope can be placed on the other); you will need to realize that no politician is going to help you. The agencies listed above may be able to respond with help.

This is a battle between you and GMAC and you are the best hope for this coming out positive for you (and of course resources from this board). I would post that letter to every agency I could, then to GMAC. Make sure to be polite when you call, but persistent.

When you discuss or draw up your hardship letter (yes, it does not hurt to send in another one, blanket it to as many GMAC people that you can), make sure to explain the benefits for them that they modify your loan.

Wish you good luck; don't give up that fight even when it looks like it is over, it may not be.

[davephx]

The hardship letter is not the problem - very rare here over the last 2 years is denial based on lack of hardship the issue.

The issue is the billions the servicers make by making trials last as long as possible and on foreclosure sales. That is where they earn the huge fees and profits. And for about 80% of 1st mortgages its the taxpayers that take the loss not any bank.

[Maurice Bedard]

The trials alone are being abused by the servicers. Each month of a trial puts the homeowner at more risk of foreclosure, instead of being a path toward a mod. The banks realized a long time ago that getting someone more and more behind equates to bigger and bigger profits. Those who go on trials of 10-12 months, and were already behind when they started, and are later offered some kind of forbearance are by that point so deep in the hole that either a foreclosure occurs, or all those payments are added to the loan, and the servicer collects bigger fees on a bigger loan balance, and the bigger loan balance makes a redefault more likely and makes for bigger payments once the teaser 2% rate ends. If they really wanted to help people, they would not make you wait to be flat broke and two months late before qualifying to be considered for a mod, not qualified for a mod- but qualified to be considered for a mod. All the housing counselling notices tell borrowers not to wait to ask for help, and then they come up with a plan that makes you wait way too long before you get help. That is bass ackwards

[Civic Sam]

These comments are all helpful. You guys know the game better than I do, and unfortunately you all confirm my worst suspicions.

[Civic Sam]

These comments are all helpful. You guys know the game better than I do, and unfortunately you all confirm my worst suspicions.

Forgot to say I will be back, soon I hope, with comments to specific posts. I'd like to take steps to get housing reporters to cover this story, which as my letter says seems to me to have been largely neglected in the nation's news media. Am I mistaken. Does anyone know of good "lender mendacity" pieces in housing publications or in the likes of Fortune, US News & Business report, Business week, Time, Newsweek, The Nation, Slate, Huff Post, Daily Kos, public radio or pubic TV or in newspapers, etc?

[Civic Sam]

I've never made it as far as the trail payment period! I've been making full monthly payments for 16 months and have told GMAC that I am working full time and supplementing my wage income with social security and distributions from my modest IRA. I had thought that trial modifications were a big positive step forward. Not so?

[Civic Sam]

davephx, could you post here a link to those monthly reports - Treasury Department, I presume? And links to any other sources that may be helpful. I want to collect a whole bunch of sources, maybe feed it into a Wordpress blog that housing reporters could draw on in getting their hands around this whole mess.

[Civic Sam]

Goldie,

Belated thanks for the great leads. My work is cut out for me.

Step one: I found Links (at Loansafe) to MHA Compliance, an email address for MHA Compliance, and links to Freddie Mac, Fannie Mae, FDIC, SIGTARP, and OCC (Office of the Comptroller of the Currency).
Step 2: send 'em my letter.
Step 3: send letter to GMAC and follow up persistently and politely.

[riddlemethisbatman]

Civic Sam -
Try this link within the forums:

PLEASE ONLY POST - Articles, Official Letters, Testimony, Rules and Regs. Moe - perhaps a Sticky is in order ?

[davephx]

davephx, could you post here a link to those monthly reports

http://www.financialstability.gov/do...c%20071810.pdf

Above is June report issued 7/26/10
and
http://www.financialstability.gov/do...ecard_1.10.pdf

[davephx]

davephx,And links to any other sources that may be helpful. I want to collect a whole bunch of sources, maybe feed it into a Wordpress blog that housing reporters could draw on in getting their hands around this whole mess.

Not to discourage you the more the public tries to expose it the better.

The problem is everyone in housing and Congress know the problem. There just is no way to enforce HAMP without a law.

Media including national has run stories especially towards end of 2009 with the swat teams sent to the banks and the White House bankers meeting etc.

One major Phoenix TV station has run stories of interviews with homeowners showing all the lost paperwork of banks etc for what.. since back in 2009. Was a daily story now maybe a few times a week. It is telling the true story.

Zillions of similar media stories around the country documenting the terrible experiences getting HAMP mods because of the banks not following directives, losing paperwork etc.

A loansafe person submitted tons of stories from folks here willing to be part of a big MSNBC story which was supposedly to run a few months ago.. or early this year but as far as I know was never aired.

Also Congress very well aware from 3 Congressional hearings over last 2 year with some VERY upset Democrats but R's just think its a waste and we should be renters not irresponsible homeowners.

It all broils down to the banks making billions by extending and foreclosing not mods. It may be immoral but there is nothing Obama/Treasury/Admin can do about it without any law from Congress.

[auroraproblem]

Civic,

I would try to focus on the positive rather than the negative. The advice I give about the letter is only a single part of an overall package.

You will get plenty of opinions on this forum like any others. The most important thing is to stay focused and positive.

Would highly recommend the letter format being correct. It is not a matter of being denied based on the letter. The letter was to be sent to those agencies listed above (not to just your servicer who is unlikely to read it).

Remember that opportunity is what you make of it and there is one here. You need to be prepared that you may be denied, that is not the end. You will be delayed, nor is that the end.

We have all been there. Those of us who were approved sat in line since before HAMP and a year or more. I was denied on two other programs before HAMP was out, applied for HAMP and waited 8 more months for that (5 trial payments and 3 months delays prior to trials).

After you send the letters, continue to call. Each week I called, be polite, explain your hardship (they may ask each time). You will get some that care, some that don't and some in the middle. You will get little information each time you call. You can though, get a positive outcome in the end.

Hope some of that helps, there is no other way to put it. I don't want you to go away thinking it will be easy, but do want you to know it is possible. No one gives money away for nothing and reducing interest is giving money away (no matter how you want to look at it). You will have to fight for it.

Good luck and best wishes.

[Maurice Bedard]

Get mad, do the research, and take action. If you are right, keep fighting and hunting and writing and then do it again. Maybe some one will finally notice you. The sqeaky wheeel gets greased, while everyone else gets lubed.

[Civic Sam]

Dave, Thanks. Actually these reports look sort of encouraging - am I reading them right?

[Civic Sam]

That's me, ******, takin it to the streets. I've spent several hours a day over the past month fine-tuning that letter to the President and am about to send it out to 20 or 30 housing reporters. Sooner or letter someone will pick up on it.

But the battle is not mine alone to fight; I see lots of good fighters here at Loansafe; winning the battle is a matter of getting ourselves organized to that the right details can get to the right people in numbers too large for them to ignore.

[Civic Sam]

Thanks much Batman what a fabulous resource.

[Civic Sam]

Aurora, thanks! Helpful. Good to hear from someone who was approved after surviving the hassle. Loansafe is an real resource, wish I’d found it a year ago.
> >
About letter format: Scribd won’t accept my Word for Mac letterhead formatting, so I’ve cut that in order to post it. Am I missing anything about formatting?
> >
I’m wondering, did my letter to the President strike you as negative? GMAC would surely say it is. I do feel focused and positive about this letter, but very to comments and suggestions.
> >
A banker friend tells me that even if I do qualify for a HAMP modification, a banker could still regard me as a bad long term risk. I’m 69, very vigorous but have only $40,000 in retirement funds, $680 gross in social security and am working full time to net about $2,000 per month. All this to meet $2,200 monthly housing expenses (condo assessment, taxes and payments on a 30-year fixed rate $276,000 loan at $5.875%).
> >
Again, thanks. I keep this thread updated regarding responses to my letter.


Steve

[auroraproblem]

Aurora, thanks! Helpful. Good to hear from someone who was approved after surviving the hassle. Loansafe is an real resource, wish I’d found it a year ago.
> >
About letter format: Scribd won’t accept my Word for Mac letterhead formatting, so I’ve cut that in order to post it. Am I missing anything about formatting?
> >
I’m wondering, did my letter to the President strike you as negative? GMAC would surely say it is. I do feel focused and positive about this letter, but very to comments and suggestions.
> >
A banker friend tells me that even if I do qualify for a HAMP modification, a banker could still regard me as a bad long term risk. I’m 69, very vigorous but have only $40,000 in retirement funds, $680 gross in social security and am working full time to net about $2,000 per month. All this to meet $2,200 monthly housing expenses (condo assessment, taxes and payments on a 30-year fixed rate $276,000 loan at $5.875%).
> >
Again, thanks. I keep this thread updated regarding responses to my letter.


Steve

I try to keep any letter to about 3/4 page in length. So you will want to be direct, yet detailed just enough to get your points across. No need to spend a ton of time on it, just explain how it benefits all parties (not just yourself). Think of it like a business, have a plan.

The money could be an issue, 31% of that income is not likely to stretch that house payment. Even if they lower it to 2% for 40 years (taxes and insurance would push it over). Even putting down the 40k (which I would not advise) is not going to get it down to a number that works.

If there is anyone you can enlist as a renter, this could go along ways to helping you out. Once approved, it is up to you to make the payments. I know that many people can manage more than 31%, but you will have to be down there on paper to have a good shot (at least somewhere in there).

[Civic Sam]

Aurora, thanks. Hate to say so but I guess you're right. How about a compromise. The long letter is important, every word. So I will work up a 3/4 page letter and attach my long letter to it.

About a renter: I have thought of that. I have a rentable basement. But my last two rejections from GMAC (after "insufficient funds") were "sufficient funds" and "hardship is not imminent". Right now it seems I have too much money!

[Civic Sam]

I try to keep any letter to about 3/4 page in length. So you will want to be direct, yet detailed just enough to get your points across. No need to spend a ton of time on it, just explain how it benefits all parties (not just yourself). Think of it like a business, have a plan.

The money could be an issue, 31% of that income is not likely to stretch that house payment. Even if they lower it to 2% for 40 years (taxes and insurance would push it over). Even putting down the 40k (which I would not advise) is not going to get it down to a number that works.

If there is anyone you can enlist as a renter, this could go along ways to helping you out. Once approved, it is up to you to make the payments. I know that many people can manage more than 31%, but you will have to be down there on paper to have a good shot (at least somewhere in there).

Aurora, here's a link to my one page Executive Summary of my long letter. Just sent both docs to the President. Many Thanks for the suggestion to write it. Steve

[goldbud]

Dear Civic Sam,
Thank you so much for the letter to the president, I signed the petition. Gmac has allowed me to make partial payments for 11 months,
They mislead me into believing that my loan would be modified.Now I have been rejected for Hamp due to insufficient funds, and also denied for in house mod for negative npv. Let me know how you are doing? I hope things are working out for you.

[Civic Sam]

Hi goldbud - Thanks for your good words and sorry to hear you have joined the ranks of the misled. As for me, after being told for 8 months last year that I had insufficient funds, GMAC is telling me this year (even as my funds deplete) that I have sufficient funds, or am "not at risk of immanent hardship". Hard not to avoid the conclusion that GMAC is simply waiting for my well to run dry.

As for my letter to the President, no response to it so far , not even an acknowledgement from the White House. Nor any word from the two non-profits that last May "escalated" my case to the HAMP solution center. But the letter tells and documents an important story, I think, and I have plenty of fight in me. Wish I had more time!

Are you following the GMAC foreclosure scandal? It's big. Can't say how or if it will affect folks not yet in foreclosure - but there may be a ripple effect of some kind. Thanks again and hang in there!