Here on LoanSafe.org we have observed thousands of homeowners enter the government’s Making Home Affordable and Home Affordable Modification Programs in hopes that they will achieve permanent mortgage assistance to help them save their homes. These programs have been out for well over a year now and the feedback we have received proves that they have definitely not lived up to many homeowner’s expectations. In fact, many homeowners are reporting that they are left in a worse position than when they first begun looking for mortgage help.
According to the government guidelines, borrowers are first required to go through a three month trial period before being qualified for a permanent modification. If the borrower makes all the trial payments on time and turns in all needed information in a timely matter, a permanent modification is supposed to be offered. We have discovered that this is far from the truth as many homeowners have been making as many as 5,6,7 or more trial payments with no permanent modifications in sight for many of them. What was supposed to be per government guidelines, a three month trial period has turned into a six to ten month trial loan modification hell.
We believe that mortgage servicers are completely overwhelmed with requests and frankly cannot process these applications in a timely matter, but they will never admit to this. In addition, these government mortgage programs are just a set of guidelines that are voluntary for servicers to follow. Hence, there is no law or legal mandate making them do anything they do no want or choose not to do.
The blame for this mess is supposedly because of the loose rules set forth by Treasury when the program first came out causing confusion for borrowers and mortgage servicers. Borrowers would many times be qualified for the trial period when they first begin the program. But as time goes by, paperwork is lost and promises broke, leaving thousands of homeowners stuck in the trial period for up to an entire year waiting on a decision, and many times the decision is a denial.
The U.S. Department of Treasury reported yesterday that about one in four homeowners that entered the trial period have been turned down for permanent assistance. They claim this is mainly due to borrowers failing to make the modified payments, not turning in financial documents on time, or just proving to not meet the criteria for this program.
However, from what we have observed here on our forum and what hundreds of others have reported on, many borrowers are dropped out of this program due to mistakes on the lenders behalf. Many times it seems to be miss-calculations on income for borrowers who are self employed or homeowners kicked out because their unemployment benefits no longer will run for an additional nine months. According to the guidelines, homeowners were able to use unemployment benefits as income as long as they were receiving the benefits for a minimum of nine months. We have seen many approved for the trial period based off unemployment benefits, but when it comes down to a permanent modification they are denied because they have been on the trial period for six months and no longer can prove nine months of benefits. These are only a couple of examples of borrowers denied for no fault of their own.
In yesterday’s report by Treasury, the number of trial modifications canceled climbed to 277,640 in April, or 23%, up from 155,173 one month prior. It seems servicers are trying to wrap up old files as quick as they can, but at the same time are denying homeowners for ridiculous mistakes on their behalf.
Homeowners who have achieved a permanent modification under this program rose to 295,348 in April, or 13%, from 227,922 a month ago.
We strongly encourage anyone who is struggling with their mortgage through these difficult times or has any questions in regards to the government’s foreclosure relief programs to join our vast community of over 30,000 homeowners across the nation. Here you will be able to get educated enough and find all the information you possibly need to help save your home from foreclosure.
THIS WHAT I WROTE HUD TODAY HOPING AND PRAYING FOR SOME ASSISTANCE. THE LIES AND FAKE PROMISES THESE LENDERS TELL MUST STOP!!!
To whom this may concern:
My name is Cynthia Martin and I am the owner of a duplex in Oakland, CA. I’m writing this e-mail praying that your office can assist or direct me on what I need to do next. My story is so long that I don’t know where to begin, but I’ll try and make it short.
My lender is Bank of America and I applied for a loan modification back in April 2009 and was told that I might qualify for the Making Home Affordable Program that was going to be unveiled in the Summer 2009. I received notice by one of the representatives, by telephone, in July 2009, that I qualified and in order to receive the permanent modification, I would have to complete 3 monthly trial payments starting September 2009 through November 2009. I paid all of the trial payments and then some. I am now on my 10th trial payment and was told after making my payment, on May 1st, 2010, that I was denied due to a missing signature on my 2008 tax return.
During my whole trial period time and beyond, I have sent various documents to them as they requested as well as all of my tax documents. I filed my taxes through e-file so I wasn’t required to sign. Any other time during this whole process (12 months), if any documents was requested, missing, unsigned, updated information needed or whatever they required, The Making Home Affordable Department or HOPE Team would normally write and FedEx a letter or have a representative call. I am really upset that I was not informed that my tax documents need to be signed or that I wasn’t given the opportunity to provide that document to them.
I would like to know what can I do at this point? Is this legal? I have all of my documents and proof of all the information sent by fax and by mail to Bank of America. I have all the letters received from their office requesting any information needed to assist them with completing the process. And what’s really funny is I’ve spoken to 15 representatives within the past week and every last one of them said that their system shows I’ve submitted my 2007 & 2008 taxes documents and they sent my case to the 2nd Look Department. I have a letter that was FedEx to me last week confirming the denial decision due to missing/unsigned taxes. I really need some assistance because now I just may lose my home due to their inaccurate information or the lack of the negotiators real research. I’m fearing that my son and I will be homeless due to this mix up. Thanks in advance.
I KNOW I’M NOT ALONE AND MANY OF U READING THIS SITE ARE VICTIMS AS WELL.
Cynthia Martin(Quote) (Reply)
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Way to fight Cynthia. We all have to stick together on Main Street. Good luck to you!!
Go Cynthia!(Quote) (Reply)
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This is great! I was trying to do a modification with Citi, but I am getting the run around. How can I contact the government about what is going on. Citi is trying to foreclose me for being behind after they asked me to do it for 9 months now.
TrACY(Quote) (Reply)
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Cynthia,
what’s the status on your situation? I am assisting my brother and his young son with a similar situation. He was denied the permanent mod once but they let him reapply with current P&L paperwork. I intent on fighting Wells Fargo all the way to get answers.
Thanks,
Clive
clive(Quote) (Reply)
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In April I was set up on a “trial modification payment” for a period of 3 months. The modified amount was 31% of my gross income which is what is indicated by the servicer guidelines. I paid my 3 months, then reapplied for a permanent modification. I was notified that my modification had been approved. However after receiving the docs the “modified payment” was only 53.00 lower than my original current mortgage. ( The trial payments were reduced by 780.00!) I am a widowed, single mom, with a special needs child , who is a realtor in the AZ Market, one of the hardest hit areas. I must say, that I certainly do have numerous hardships. Citi simply stated if I do not sign docs, and I can’t afford the payment, then I will have to short sale my home or Citi will foreclose. Since my credit score of 785 has now significantly lower, due to Citi reporting me late, I cannot qualify for a home now. Thank you Citimortgage for absolutely nothing. You should be ashamed.
Julie Platt(Quote) (Reply)
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I was told that my payments would pretty much be the same because they would include escrow. I would have a lower interest rate but through the government program one of the requirements is that the monthly mtg payment has to include escrow. Hope this helps:)
Tracie(Quote) (Reply)
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dear Julie Platt,
I had a similar situation, but I suggest you fight this. Mine wasnt such a big difference between trial payments then permanent amount, but a substantial one. I wrote them asking them how they caluclated this, since the 31% guideline of gross income applies. I think they try all kinds of things, but stick to your guns and get them to explain why such a discrepancy in trial payments..it makes no sense. You should not pay more than 31% Gross income based on HAMP guidelines. Ask them to explain, I had Citimortgage too and I dealt with Arizona office I can give you the email of my case manager..email me. Good luck, Isabel
Isabel Folgado(Quote) (Reply)
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Cynthia,
Were you able to convinced Bofa to re-evaluate your case? My application got denied for the exact same reasons. I appealed but I’m still waiting for a resolution.
Martin P(Quote) (Reply)
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I was with Country Wide in an approved mod program in 2008 when Bof A bought my them they called me in April 2009 offered a new program that was coming making homes affordable I was not late or behind. They somehow reset my old mod in Jan 2010 making it look like I owed them $20,000 in lates and started my trial payments and now 10 months later denied me for the program. They are putting it in for a second look, but are they crazy or what is going on? Now they want all this money up front and reported me late all this time dropping my 680 score down to 500 so far. It feels like they set me up to take my house. Something has to been done about these banks. All of these story are so close.
Kathi Parks(Quote) (Reply)
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My trial payments have just been approved 1-1-11, Is there anything I need to worry about after the 3rd payment?
Dave Nass(Quote) (Reply)
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What a nightmare! I am with Chase Home Finance. I am a single mom and self employed, and the recession has cost me about $60,000 in lost income over the last two years. Thankfully it has turned around a bit for me, but I’m afraid it’s come too late.
I applied for HAMP in August, and have been making my Trial Period payments. I heard from Chase on Dec 2, requesting additional documents (bank statements and P&L statements) for the months of Oct and Nov since the approval process was taking longer than anticipated, and I faxed over these documents on Dec 3. I have not otherwise received any phone calls from them.
Today (Christmas Eve, got to love it), I received a Foreclosure Notice from Chase that states their intent to foreclose on my property on or around Feb 21. Their offices are closed today for the holiday, and I have promptly faxed a response to them. It was my understanding that foreclosure proceedings cannot continue while being considered for HAMP. And if you don’t qualify for HAMP, you need to be offered alternatives before they can continue again with foreclosure.
I have a pit in my stomach right now. I have to wait the weekend to talk to a live person. I wish I had just bit the bullet and paid the full monthly payments over the Trial Period, because I’m just that much more behind now in payments and if there’s no other solution, I won’t be able to financially avoid foreclosure.
Yuck!
Sandy B(Quote) (Reply)
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It’s the Wild West out there with the banks as far as I’m concerned. Just an fyi for reader’s who are in the same boat as Sandy, if a bank initiates foreclosure proceedings during the trial modification process it should be considered Wrongful Foreclosure and there are THOUSANDS of cases like these in the court systems.
If this happens to you please Google the Treasury Department’s Supplemental Directive 10-02. This was created as a guideline for the lender’s to follow in response to ALL the foreclosures that were being put into place while homeowners were under review for HAMP.
Another good tip is not to call the generic 800# but find out the Foreclosure # or Loss Mitigation # and try them. Reference the Directive, tell them you are under review for HAMP and the foreclosure needs to be paused.
Maryann(Quote) (Reply)
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We have been in loan mod hell with Wells Fargo for almost 9 months now. They have at best misinformed us and more recently blatantly lied.
First we called to ask if we should be making partial payments and were told that they would not post to our account until the full amount was received. At the time we were told we were to have a response in 30 days so it didn’t seem prudent.
Second we did not receive a demand letter before the loan was sent to the foreclosure attorney. $1000 was added to our total for late fees and attorney fees.
When we did receive the notification, we asked our Wells Fargo advisor for advise. She advised that the decision makers were all at a conference so there would be an additional delay but if we could pay off the amount that whe would just need a letter stating the source of the funds.
We borrowed the money to prevent our house from going to auction and were notified that we were approved for HAMP in less than 1 week. Three weeks later, the night before we were to take our first trial payment to the bank, they called and said they revoked the offer because the payoff had changed the amount that the trial offer was based on. We paid based on their advice and they denied because we paid?!?!?!?!?
Two words: Fraud and Lies.
We have a second mortgage that was also going to be modified based on the first and are now being forced to consider bankruptcy.
Fraud and Lies. It is my firm belief that they have determined that they could get the full amount of the mortgage in foreclosure and they would prefer that and any compliance with HAMP was only because they are forced to do so. I believe they only contact by phone because they don’t want a written record and they are very careful in what they say so as to be legal but not helpful. My only consolation is that I did not make the trial payments and then get denied and at least I am still in my home and current on my mortgage (and the loan I took out to get it current).
I don’t really see where we have a lot of options. They are closing our file as we speak. If we attempt another mod, we have to start all over and we have to be 60 days late, but they will start foreclosure at 60 days since we have already been in FC with them. HARP requires 6 months current and no more than 1 late in the past year, so our only option is to continue with our current payments (our HELOC is with Wells as well so they won’t modify that now either). Even if we did attempt another mod, no reason to believe something similar or worse wouldn’t happen.
It ought to be illegal!!
LC(Quote) (Reply)
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