In the beginning, there were subprime lawsuits over toxic mortgages that were plaguing homeowners across the country. Adjustable rate loans gone bad by the millions, had borrowers searching for legal relief everywhere. However, struggling homeowners quickly found out that it would cost an arm and a leg to hire a lawyer to fight the big banks with their even bigger lawyers. In addition, many borrowers realized that these contracts were mutually signed by the them and by the bank.
What this all comes down to is contract law. As they say in the banking world, the devils in the details and that is what many homeowners are quickly finding out as they reach out for help on their home loans.
Fast forward three years later, loan modifications are the hottest thing since Option ARM’s (negative amortization mortgage) in 2006 that were handed out to borrowers across the nation like McDonald’s sells cheeseburgers. However, obtaining a mortgage modification from your servicer is much, much more difficult then grabbing a burger and fries from Mickey D’s. Even with the Home Affordable Modification Program (HAMP) and the dozens of other programs that have come down the pike from Washington, up the creek homeowners cannot seem to find a paddle or boat anywhere to save themselves.
It is well known in struggling homeowner land, when you turn to your mortgage servicer for assistance on your loan, help is usually the last thing you get. Ill informed employees, lost faxes, calls that are never returned and loan modification promises that never materialize make this whole process a trip to foreclosure hell and people are really starting to get fed up.
This week in Queens, New York, three homeowners are taking on one of the world’s biggest banks, JPMorgan Chase for their loan modification shenanigans. The lawsuit was filed in Brooklyn Federal Court against Chase for alleged delays and denials on permanent mortgage modifications under the Home Affordable Modification Program (HAMP).
One homeowner, Alex Lam realized he had an adjustable rate mortgage and decided to be proactive with Chase before he became late on his loan. Lam said that a bank representative told him he was ineligible because he was current on his monthly payments and that if he missed a few payments, he could reapply for a loan modification later.
Lam decided to follow that advice and missed the following two months mortgage payments. He was allegedly approved of the trial loan modification under HAMP that lowered his monthly payments by $900. But instead of receiving a permanent loan modification that would have helped him save his home, Lam was served with a foreclosure notice and was shocked.
These mortgage stories are becoming more and more common as time goes by. There are thousands of homeowners right now in our forum that are sharing similar stories of loan modification shenanigans with most every mortgage servicer out there. The allegations made by the homeowners in this story seems to now be the norm, and not a rarity.