For years I have provided loan products to homeowners designed by lenders that I now realize were in the better interest of the lender than the actual homeowner.
If it were not for Gods Grace I would have gone out of business long ago when this crisis started. As God blessed and sustained my company through these trying times, I made it my mission to help distressed homeowners. I now feel that I have a duty to the community to help as many homeowners as possible navigate the maze to save their home.
In my efforts to assist I have dedicated multiple resources to provide clarity and direction to distressed homeowners. I have made a tremendous effort to help as many homeowners that my office finds eligible apply for this Great program designed by the Obama administration. The homeowners that my office finds ineligible for traditional refinances are directed to apply for a "Home Affordable Loan Modification" directly with their lender that does not cost them anything. This program designed by the Obama administration offers hope where there otherwise is none. Critics can say what they want about the HARP program bottom line is it is a lifeline for families in need; if it worked - BANKS ARE REFUSING TO PARTICIPATE!
Bank of America, Wells Fargo, Citi and other Big Banks are actively deceiving qualified distressed homeowners applying for President Obama's Home Affordable Mortgage modification Plan
The major problem is the above-mentioned Banks are misleading borrowers into believing they are not eligible. In my efforts to assist these homeowners save their homes I have participated in dozens of 3-way conversations with the homeowner and the bank. These eligible homeowners where offered a different program that was more beneficial to the bank and much less beneficial to the homeowner not in accordance with the guidelines of President Obama's Plan.
FOR EXAMPLE:
- Bank of America: Requires 2 pay stubs / 2 years tax returns / hardship letter / 2 months banks statements / 4506 / etc. in accordance with the documentation required for consideration to be faxed to a fax machine that will not accept more than 10 pages! They then discard the submission for the program with no notice to the homeowner. In addition when a distressed homeowner who is current on their mortgage calls B of A inquiring about the Home Affordable Modification Plan they are prompted to enter their loan number, B of A system automatically identifies that that are current and transfers them away from the modification department thus never giving them an opportunity to apply.
- Citi: Actually denied an 85-year-old widow of a veteran that spent her last penny of savings and never missed a payment. She is paying a $2,000.00 mortgage payment even though she only received $1,500.00 a month in survivor benefits. She was denied because Citi's computer model calculated that they stood to loose $63,000.00 by modifying her loan. We contacted a HUD approved credit counselor from HOPE and had a 4-way call with Citi in regards to their unlawful denial in this case. The Citi employee actually emailed us (unauthorized) the screen shot from the software that denied her modification. I have saved this documentation and can provide.
- Wells Fargo: Representative in home retention claims that "Wells Fargo Financial" is not offering plan only "Wells Fargo Home Loans is offering plan” and vice versa when you speak to Wells Fargo Home Loans. Wells Fargo representative had borrower fax all required documentation and then after checking back once a week for eight weeks a "work out representative" offered a three year forbearance agreement that was less beneficial and required homeowner to sign and notarize a form that stated the homeowner "further agree to waive any claims or cause of action you may have against us as a result of this account" as a condition of acceptance.
Fact - The problem isn't the program; it's the maze that the banks make homeowners navigate to apply for it!
- The hoops the banks have created to apply for this program are used to discourage distressed homeowners seeking relief.
- On all the banks websites with the exception of Chase the space dedicated to the Home Affordability Program is either buried non-existent or the links send you in never ending circles. *(Sites have been updated in recent months!)
- Most elderly and low-income homeowners don't have access to the Internet to download the necessary forms.
- When a delinquent homeowner calls their lender they are automatically transferred to the collections department. The collection department has no interest in assisting the borrower modify their loan they only want a payment. The collection agent does not identify themselves as such to the homeowner and far too often mislead the caller into believing if they don't make a payment or post date a check for payment they will not take their modification request into consideration. Most homeowners just simply give up after being misinformed that they are not eligible!
- When called directly all of the above-mentioned Banks do not give a complete list of documentation to the homeowner to apply for the Home Affordable Modification Plan. When only partial documentation is compiled the Banks cannot process for the Gov. plan so they offer their own less beneficial plan.
- Most homeowners do not have ready access to a fax machine and none of the banks will give a mailing address to send the required documentation, so they have to go to a FedEx Kinko's or similar store and pay almost $1.00 a page to fax in the documentation.
Even with a fax confirmation there is no guarantee that these banks received all the documents. - Homeowners have no way of following the progression of their application and when they call in they are routed in never ending circles to every department but the one working on their modification.
- These are just a sample. Most homeowners are told they don't qualify prior to even sending in the documents! This was the case with the three individuals I referenced above. I have first hand knowledge and a paper trail of dozens of these unlawful occurrences. By law these Banks that received TARP money have to comply and they are not. Something needs to be done. This has to be exposed! Thousands of eligible homeowners need to be given the opportunity to keep their homes and succeed in this program. Banks are fleecing U.S. Citizens for their own profit!
I have also studied the HAMP guidelines extensively to assist homeowners that my office could not help. I found that if properly cited the HAMP law actually prevented any foreclosure prior to the homeowners’ consideration for the program. My wife is an attorney, I did the research on this law and she later appeared for a client that had a default judgment entered against them in a foreclosure matter. The judgment entered May 2008 and subsequently set for June 09 to confirm the sale of the property. She successfully cited the HAMP guidelines and the judge granted the motion to vacate the order previously entered and allowed the homeowner time to submit an application for a HAMP modification. Below is a summary of my findings after meeting with various lenders regarding HAMP that my wife utilized in this case:
I recently had the opportunity to attend a meeting on President Obama’s Home Affordable Modification Program with representatives from Major Banks and Servicers.
The Bank representatives from two of largest servicers in the United States boasted servicing one in five mortgages equating to almost 14 Million loans an approximately 8 Million loans respectively. In addition, the first Bank proudly disclosed that they have doubled the number of associates dedicated to home retention to 7,400 this year at which point the other Bank proclaimed that they had 11,000 associates dedicated to home retention.
The combined resources that just these two major lending institutions have dedicated to home retention is equal to .08 % of their entire servicing portfolio, less that 1/10 of a percent. This abysmal percentage truly represents the Banks intentions to comply with the Presidents HAMP program.
In order to understand why the Banks and Servicers are not making a good faith effort to comply with this law you must first understand what the HAMP program requires of them:
Servicers should not proceed with a foreclosure sale until the borrower has been evaluated for the program. Any Foreclosure action must be temporarily suspended, including new foreclosure actions.
Servicers must establish a property tax and homeowners insurance escrow account and disperse payments to the insurance provider and County and roll this expense into the principle balance of the homeowners current loan (even if delinquent taxes are owed and no previous escrow account was established).
Servicers must reduce monthly mortgage payments to an affordable level based on the borrowers income, regardless of principal balance owed.
The HAMP underwriting guidelines require the Banks and Servicers to accept lower payments and pay property taxes to the County and homeowners insurance out of the Banks’ funds! The Banks do not want to concur this expense; it is less costly to foreclose.
The representative from the housing counseling organization stated at the meeting that day, “We needed another moratorium, or new Law to stop the foreclosures plaguing the city of Chicago”. I stated that, “You don’t need a new law, you just need to enforce the American Recovery and Reinvestment Act of 2009, that President Obama already signed.”
President Obama signed the American Recovery and Reinvestment Act of 2009 into law on February 17th. On April 6th 2009 the Treasury Department issued uniform guidance for loan modifications across the mortgage industry in supplemental directive 09-01.
In accordance to the underwriting guidelines for HAMP within this Law:
Any foreclosure action will be temporarily suspended during the trial period, or while borrowers are considered for alternative foreclosure prevention options. In the event that the Home Affordable Modification or alternative foreclosure prevention options fail, the foreclosure action may be resumed.
Participating Servicers are required to service all eligible loans under the rules of the program unless explicitly prohibited by contract; servicers are required to use reasonable efforts to obtain waivers of limits on participation.
On April 21st 2009 the Treasury amended the supplemental directive 09-01 with Announcement (09-05R):
Q3. How should borrowers who contact their servicers be handled with respect to HAMP if the servicer does not yet have the proper documents or is not yet equipped to evaluate the borrowers situation?
Servicers are required to validate the homeowner’s eligibility for HAMP and capacity to pay. Servicers should begin the process of collecting the required documentation from the homeowner and the information necessary to establish an escrow account on non-escrowed loans. Based on the servicer’s understanding of the homeowner’s ability to pay, a servicer may place a homeowner on a forbearance plan pending its ability to execute a HAMP modification. Foreclosure actions (with the exception of those in Georgia, Hawaii, Missouri and Virginia), including initiation of new foreclosure actions, must be postponed for all borrowers that meet the minimum HAMP eligibility criteria.
Q8. Must servicers suspend foreclosure or not initiate foreclosure for all borrowers who are potentially eligible for the HAMP?
To ensure that a borrower currently in foreclosure or at risk of foreclosure has the opportunity to apply for a HAMP modification, servicers should not proceed with a foreclosure sale until the borrower has been evaluated for the program. Additionally, servicers are strongly encouraged not to initiate foreclosure until a borrower has been evaluated and determined to be ineligible for the program or the borrower fails to respond to a Trial Period Plan offer that has been made by the servicer.
All Fannie Mae-approved servicers must participate in the program for all Fannie Mae portfolio mortgages loans and MBS pool mortgage loans guaranteed by Fannie Mae.
Legally, Banks and Servicers may not proceed with a Foreclosure sale until the borrower has the opportunity to apply for a HAMP modification. Since the Banks and Servicers have not allocated the resources necessary to process the 4 to 5 million eligible homeowners currently in foreclosure or at risk of foreclosure as intended by the Obama administration, the courts should then enforce it!
