I'm shaking the Magic 8 Ball and asking "What's the likelihood the HAMP home loan modification program is ever going to help nearly as many people as predicted?" Hold on...Magic 8 ball is stuck on the edge of the floating 20 sided die...
Looks like it's stuck between "My sources say No" and "reply hazy, try again."
It's kind of ironic, because, both of those are what the bank keeps telling my parents ever since they applied about a month and a half ago.
Look, this is pretty easy to figure out. Banks aren't as eager to modify their loans as one might imagine, right? So putting BANKS in charge of loan modifications...it's not going to end well.
Here's what my parents have gone through so far...
- So they were unable to pay their mortgage for a bit -->
- They got a letter in the mail that their home is going to be foreclosed upon and had 16 days (or something)to talk to an independent home counselor and try for a modification -->
- They contacted a counselor and applied for.....the Michigan loan modification program -->
- A law firm acting as agent for the bank sent my parents a letter, postmarked on Friday and arrived to them on Monday saying they had 10 days from the postmark date to send them massive amounts of information...giving them 5 days to compile and send the information out OVERNIGHT to get there on time -->
- They sent out the info...and they waited -->
- Weeks later a letter comes in the mail from the same law firm acting as agent saying they got the information and now they need additional information, again sent out on Friday and received on Monday asking for info in 10 days from the post marked date -->
- They send out the info TO THE LAWYERS the next day -->
- But got a letter the NEXT DAY from the BANK claiming they never got the original information -->
This is sort of the intro of the theme...different actors within the process sort of....losing information, not communicating things in time... The Run Around
- So my parents send the BANK a packet with the original information AND the new information -->
- Weeks later the BANK tells my parents they're not eligible for the HAMP mortgage modification (remember, my parents applied for the Michigan mortgage modification)...but the Bank WOULD like to offer them their EXCLUSIVE Bank based loan modification program......
...which puts the mortgage payment at 56% of their income.
Remember that...he was told he wasn't eligible for HAMP
- My father sent communications asking about the Michigan modification, and heard nothing -->
- Finally he managed to get a meeting with the lawyer who organized a 3 way phone conference...the Banker told my father what they were offering was the HAMP plan...
...my father kept asking if he had applied for the HAMP plan and they kept evading a direct answer saying "it's been calculated based on the HAMP plan."
My father said he needed a meeting with the lawyer and his independent housing agent.... -->
- They scheduled a meeting... -->
- My father confirmed with the housing agent that the lawyer had scheduled the meeting and the housing agent said Yes -->
- My parents show up at the meeting...... -->
- And the Lawyer said "Oh...I'm sorry, I didn't realize you'd be coming. I had heard you declared bankruptcy and that you wouldn't be coming. I don't have ANY of your paperwork or anything"
"No...that's not true. We didn't declare bankruptcy."
The Housing agent was told that the meeting was cancelled...so she was not there -->
............................
Oh hell...I could keep going on...but you get the picture.
Basically it's all lead to the Bank basically saying "WE'RE trying to help you, but these programs are just so cumbersome...here, take this what we're offering you, or we'll jut foreclose." My mother said she spent an hour listening to the lawyer and the conference call where there was a frequent repetition of the concept that A) It's the mortgage modification plan that's letting them down and B) The BANK's hands are tied and they'll just have to take what the bank is offering.
It just goes on from here. Do some digging and this is happening all over the place...here's a really god article from Market Watch:
I am departing from my regular question-and-answer format this week to bring you an email from a reader, J.N., in Richmond, Va. I am running it in full, with a bit of editing, because it details in excruciating pain the trials and tribulations home owners are experiencing in trying to convince their lenders to work with them to modify their mortgages.
I receive many similar letters, but this is one of the best I've seen in explaining the difficulties owners are running into.
And here's a snippet from one such story, full of similar Run Around...
...About mid July, I started emailing to find out the status of my application and was told that it hadn't been assigned to a processor yet. That didn't make me feel like a very good customer of the bank. About a month later, I was informed by telephone that I did not qualify for the normal modification but that the bank would continue to look at other avenues for me. I wasn't exactly sure what "normal modification" meant, but at least it sounded like the bank wanted to work with me...
Sound familiar from above? The Bank informed him that he didn't qualify for the Normal modification and he would be routed to Something Else.
Anyway...this is how it goes, it seems, for many or most people who need a Significant loan modification.
The bank basically just drags its feet...seems to derail people from an actual loan modification program...makes a very low offer and leans on the home owner to take it or lose their house.
These are the guts of why the mortgage modification program isn't working.
The banks are willfully screwing it up.
Obviously.