Tag Archives: loan modifications

What To Do If You Get Scammed From A Loan Modification

For the most part everyone knows by now, the numbers of homeowners struggling with foreclosure that are increasing. Countless homeowners are having trouble making their mortgage payments and are a missed payment or two away from a notice of default.  True they will be having to deal with how to fix bad credit and in the future how to get credit score back up.  But until that time you don’t want to be scammed if you are trying to save your home many of the homes in Santa Maria are for sale are either a short sale or even a foreclosure.   The reality is that the Santa Maria real estate market here in Santa Maria, California has been hit hard with values falling to over 50% of what their values were in the peak.

Many people will investigate any alternative to try and spare their house from foreclosure. This opens the door to scammers. The fact is, mortgage modification and foreclosure relief scams are popping up everywhere you go. As a homeowner you’ll want to know that they are out there and what to look for in order to steer clear of them. A scammer cannot only cost you money but can cost you vital time that you could use to save your house or get ready to move. You need dependable information on foreclosure or the short sale procedure in a timely manner.

Nearly all the ads you’ll notice will claim to help you save your home from foreclosure or lessen your house payment to an easily affordable level. Additionally they infer that they are associated with a government program or enjoy a direct line to your loan company. They don’t.  Certainly, there are honest businesses around that legitimately make an effort to aid homeowners yet, sadly, there is a high number that are simply scams.

Scammers are simple enough to spot simply because they generally ask for money up front. But, they’ve got other sorts of strategies as well. Look for these clues:

1. Someone who demands money at the start before they actually do anything. Many states have recently passed laws regulating money paid in advance for mortgage modification or foreclosure services. The most effective rule of thumb should be to not pay for anything in advance.

2. The scammers have ways of tracking down property owners who have missed payments or have their properties scheduled for auction. They then target these house owners knowing that they are more susceptible since they will be in a troubled situation. When you are one of these homeowners be extra vigilant in any dealings you may have with foreclosure rescue or mortgage modification companies.

3. Some scammers attempt to get you to sign the deed to your house over to them claiming they are going to make the payment on your property. They will not.

4. You should not make a mortgage payment to any person besides your lender. More than likely, you will not see that money again and neither will your lender.

5. Be aware of the phrasing of certain promotions that make it sound like they work directly with a government bailout program. They almost certainly do not. They more than likely would just like to make you another high fee, high interest consolidation loan which will only buy you a little time at great cost.

6. Getting a letter from a real estate agent offering you free services to do a loan modification.  Unless they are a govt sponsored consumer group they do not receive any funding so what is the motive to offer you this service for free? That truly involves lots of paperwork as well as time on the phone?  Well its to eventually get you to sell the home on a short sale so that they can earn a commission on selling your home but not necessarily help you get the loan modification as you may have been hoping for.

Ok, so what if you’ve recently been scammed? Well, you possibly can report the issue to the Federal Trade Commission (FTC). They have a web based complaint assistant and have a hotline at 1-877-FTC-HELP. You can also uncover good information regarding foreclosure or short sale consequences online.  There are many benefits to doing a short sale as well but you will have to read about that on my other blogs.  One thing to keep in mind regardless of what you plan on doing is that the Mortgage Debt Forgiveness Act of 2007 expires in 2012 and there will be tax consequences that will occur after that.   Please seek some legal counsel as well as some tax council as to what you want to do next year if you feel that maybe you will not qualify for a loan modification to avoid some serious tax consequences from the I.R.S.

There is also the NeighborWorks America group that educates the general public about loan modification scams. The best way to avoid these scams would be to educate yourself on the many varieties of scams and be very cautious about any individual offering to help modify your loan or save your house from foreclosure.

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Conditions of Negotiating for a Loan Modification

Getting a loan modification is actually one method in which a consumer can stay away from foreclosure. Not everybody qualifies and not all banks are participating. But, if you’re having trouble paying your mortgage, it is worth your even though to call your lender and find out what programs they give. You may not constantly get the answer you might be seeking, but when you get the correct person on the phone, you are going to drastically boost your odds of saving your house.

A loan modification may take numerous forms. It can be a lasting change in the original agreement made between you and your bank. In other words, it’s not a temporary fix, like a workout program or forbearance agreement; it is a long term plan that may last the life of the loan. However it is important to comprehend that most lenders won’t approve a loan modification if a temporary fix would also solve the difficulty. When presenting a modification, you may need to present your case in the best possible light. This is why several people decide on to hire a expert to negotiate with their lender, instead of attempting such an overwhelming task on their own.

The items that can be changed contain the interest rate, the length of the mortgage, the amount of the monthly payments along with the quantity of the principal, but only in rare instances is the principal decreased. Normally, adjustments are produced that boost the principal in order to cover any past due amount or other charges that could result in a lien being placed on the property. If a principal reduction is required to create the loan inexpensive, and it might be justified by a market value that has declined because the purchase, then an adjustment could be negotiated. In each case of a mortgage modification, we recommend getting a BPO (Broker Price Opinion), appraisal, or a Property Valuation to prove the current value to your lender. Nevertheless, a full appraisal is costly and usually not essential. Both other items named above might be bought for around $100 and need to adequately prove the value to your lender.

Banks all have waiting periods. Some lenders seem to take longer than others to obtain back to their clients. Bank of America, as an example, has been mentioned in hundreds of complaints to the Florida state attorney general for failure to act promptly when contacted by homeowners. It is very crucial to not just sit back and wait for your lender to take action. You have to be quite proactive by contacting them on a standard basis and making sure you’ve submitted all of the documents they requested.

Normally, a bank will offer the customer a “trial period”. In case you are provided a trial, you will be asked to make your payments on time for 3 months in a row. Some banks permit you to create the modified, lower payment. Others ask for your current payment, whatever that may possibly be. Many instances we see start having a workout program and then the loan is modified right after the first 3 payments. A workout plan is whenever you make your typical payment, plus an extra amount that’s applied to the arrears. This type of program requires you to make 3 greater payments until the loan is modified.

A major difficulty with agreeing to this kind of strategy is that you are relying on your lender to truly modify your loan three months later. In our experience, lenders almost never follow through and will say virtually anything to try and collect their money. Trusting them is in no way a great thought, so ensure you get everything in writing and follow any plans you’ve got agreed to. In no way agree to a modification, workout program, or repayment plan which is not affordable.

Overall, a loan modification is probably the very best possible approach to keep your home and stop foreclosure, so don’t waste any time and get started right now. Your first step would be to call your lender and ask them for achievable choices to stop the process of foreclosure. They really should have a regular loss mitigation package for you to total and return to them. If they don’t respond with an cost-effective strategy, or worse however, do not respond at all, then you may should hire a skilled to negotiate on your behalf.

Regardless of what occurs, you’ll know you did everything possible to save your property.

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Did You Know A Trustee Can Block A Loan Modification


Lawsuit Reveals How a Middleman Is Blocking Mortgage Modifications for Homeowners

by Paul Kiel ProPublica, March 31, 2011, 1:43 p.m.

Pamela Jeter of Atlanta, Ga., has been trying to get a mortgage modification for more than two years. She seems like an ideal candidate. She has shown she can stay current with a reduction in her monthly mortgage payments. Everybody would seem to win. Even the investors who ultimately own her loan think she should be able to get one. So, why is Jeter facing foreclosure?

A bank that she didn’t even know is involved with her loan has thrown up a roadblock to modifications. At least tens of thousands of other homeowners have shared a similar plight. Jeter’s case is a window into a broken system where even though the actual investors, when asked, say they want to allow modifications, the bank that acts as their representative has refused to allow them.

Two big banks act as middlemen between the homeowners like Jeter who make payments and the mortgage-backed securities investors who ultimately receive them. The banks’ jobs were supposed to be relatively hands-off, devoted more than anything to processing homeowner payments. When the housing bubble burst, they faced new demands.

One of those middleman roles is well-known to homeowners: the mortgage servicer [1], responsible for collecting homeowner payments and evaluating requests for a modification.

But it’s another middleman that’s proven the real barrier for Jeter: the trustee, who is supposed to be the investors’ representative, making sure the servicer is maximizing investors’ returns and distributing checks to them. HSBC is the trustee for the pool of loans of which Jeter’s is a part — and it’s refused to approve any modifications for loans like hers, saying the contracts around the mortgages simply don’t allow it.

 

 

The good news for Jeter is that, in what seems an unprecedented step, her servicer OneWest has taken HSBC to court in order to allow modifications. It filed suit in June of last year [2].

But in a sign of just how convoluted the mortgage world has become, OneWest is also pushing to foreclose on her. A recent sale date was avoided only after her lawyer threatened to sue.

Update: One day after this story ran, OneWest postponed foreclosure [3], saying that it wouldn’t attempt to seize Jeter’s home again for at least two months.

Jeter’s loan was typical of the boom years. In order to help pay for improvements on her home in 2007, she’d refinanced into an interest-only adjustable-rate loan. That loan was bundled with thousands of others by a Wall Street bank and sold off to investors (pension funds, hedge funds, banks etc.).

That’s where the trouble started. In Jeter’s loan pool and nine others, the contracts laying out the servicers’ responsibilities and powers contradict each other. OneWest’s lawsuit seeks to sort out that contradiction.

One document, a private contract between the servicer and the Wall Street bank that bundled the loans, explicitly forbids servicers from modifying loans in the pools in a way that would reduce homeowner payments. But other contracts — that investors could see — explicitly allow such modifications.

It’s become a familiar problem [4] during the foreclosure crisis, dealing with the aftermath of the banks’ corner-cutting and sloppy paperwork of the housing boom.

No one appears to have tried to sort out this mess until 2009, when OneWest requested that HSBC, the trustee, allow modifications. The administration had just launched the Home Affordable Modification Program (HAMP) [5], which pays servicers and investors subsidies to encourage affordable modifications. Under the program, modifications occur only when they will likely bring a better return to investors than foreclosure.

But HSBC refused to authorize any modifications, saying the contracts prohibit them. It’s obligated to act in investors’ interest, and it feared getting sued by those who didn’t want to cut homeowners’ payments. The dispute dragged on for months. Ultimately, HSBC offered to allow modifications only if OneWest accepted the risk of getting sued by investors, but OneWest wouldn’t.

OneWest was in an increasingly difficult situation, it says in its suit [2]. It faced potential suits from investors if it modified loans, and if it didn’t, homeowners in the pool might sue.

In late June 2010, with HSBC still not budging, OneWest filed suit, asking a federal judge to decide whether modifications should or should not be allowed.

The case suggests that when investors themselves are asked, they will approve modifications. HSBC polled the investors in the 10 pools [6] after the suit was filed. A large majority favored allowing modifications. Based on those results, HSBC said in a court filing in January [7] that it did not oppose OneWest’s request for a judge to intervene and that if the judge declared modifications were allowed, that would be fine with them.

In the meantime, 3,000 homeowners like Jeter whose mortgages are caught up in the dispute have been unable to get any reduction in payments. When OneWest filed its suit, it said at least 800 of the loans seemed eligible for an affordable government-sponsored modification but couldn’t actually be modified because of HSBC’s stance. Those homeowners “are facing the possibility of losing their homes through potentially avoidable foreclosures every day,” it said [2].

It’s not clear how many of those homeowners have since been foreclosed on. OneWest said in a statement that it had no choice in pursuing foreclosure: It’s “contractually obligated to continue servicing loans in accordance with the terms of the underlying securitization documents.”

The suit is remarkable not only because it seems unique — close observers said they hadn’t seen another example of a servicer going to court against a trustee — but also because it lays bare a relationship that is usually a mystery to homeowners and investors in securitized mortgages.

It’s often hard for homeowners to tell if a servicer is correctly citing an investor restriction when denying a modification. Servicers have cited investor restrictions when denying modifications for at least 30,000 homeowners, according to a ProPublica analysis of Treasury Department data. A Treasury spokeswoman said auditors examining such denials had found they were almost always legitimate. That’s not an experience shared by homeowner advocates.

How A Trustee Can Block A Loan Modification


Graphic by Paul Kiel and Krista Kjellman Schmidt, ProPublica

 

While there are clear cases where the contracts prohibit modifications, homeowner advocates say servicers often falsely claim their hands are tied [8], blaming “the investor” when there’s really no restriction on modifying loans. In a number of cases, said Jeff Gentes, an attorney at the Connecticut Fair Housing Center, servicer employees have told his clients that there was an investor restriction, when a little bit of digging showed that’s not true. We reported on this problem last year [8].

That’s also an experience shared by OneWest homeowners. Briant Humphrey of southern California says OneWest told him repeatedly for months that an investor in his mortgage wouldn’t allow a modification. But that doesn’t appear to be true. OneWest declared in its suit [2] against HSBC that, of the 500,000 or so mortgages it services, the only ones not eligible for possible modification were the loans at issue in the suit. Humphrey’s loan is not one of them.

His case is notable for another reason: Humphrey happens to be friendly with one of the Treasury officials in charge of HAMP, Laurie Maggiano. After narrowly avoiding a foreclosure by declaring bankruptcy, Humphrey was able to speak with Maggiano, and he credits her with finally getting higher level attention at OneWest. His case is currently in review again.

Overall, investor restrictions have been a relatively minor problem compared to the many other barriers homeowners have faced in a quest for a modification. They represent about 2 percent of the 1.9 million total homeowners who’ve been denied [9]. In most cases, the contracts written when the securities were sold give the servicer clear authority to provide modifications.

In the cases when there actually is a restriction in the documents, the servicer is supposed to at least try to get permission. The HAMP rules require the servicer to send a letter to the trustee requesting that modifications be allowed.

But even that small step has proven too much for many servicers. Last summer, a director at Deutsche Bank, one of the largest trustees, told ProPublica that such requests “never happen.” [8] Deutsche Bank did not respond when asked if that was still the case.

In cases where there’s a clear contractual bar to modifications, the servicer and trustee could take the initiative to change the contracts by having the investors vote on it or, if voting isn’t required, amend the contract themselves.

But in general, said Gentes, the housing attorney, servicers are slow to investigate and eliminate bars to modification. Servicers are paid a low, flat rate per loan and are motivated to keep costs down [1]. “The costs of removing an investor restriction are often borne by the servicers, and so extensive amendment rules often mean that servicers won’t pursue it.”

Trustees, who get paid even lower fees, are no different, said Bill Frey of Greenwich Financial Services, which specializes in mortgage-backed securities. “They’re very, very prone to inaction.”

Both, as middlemen, don’t bear the loss when a home is foreclosed on.

As for Jeter, eight months after OneWest filed suit to allow modifications, she is facing foreclosure for the fifth time.

Self-employed, she hit trouble in 2008 because of the recession. After failing in attempts to refinance into a conventional loan, she started talking to her servicer, then called IndyMac, about a modification. (OneWest [10] was formed from the remains of the failed bank IndyMac. It has recently been under scrutiny from regulators [11] for its foreclosure practices, along with other of the country’s largest servicers. )

An employee told her she had to miss several payments in order to qualify for a modification — a common experience for homeowners [12].

“I hadn’t done anything like that before,” she said. “It was a crazy thought.” But because she’d been assured that was the only path to a modification, she did it.

Several months later, OneWest put her on a six-month temporary payment plan that cut her payments almost in half from $3,500 to $1,850.

She made those payments, but still there was no modification. “I regret to inform you that your particular loan is in a group of loans that the investor will not modify,” a OneWest employee wrote her in an October 2009 email, telling her to either pay off her mounting late payments or face foreclosure.

The modification application process continued, however, and the reasons for denial proliferated. She was told at one point to get more income, so she took in tenants. She was asked over and over for the same paperwork — as we’ve reported, a typical experience [12]. In all, she says she’s applied for a modification about 10 times.

“It’s been pure hell,” she said. “I’ve heard every excuse in the book.”

Because of the mounting arrears and slumping housing market, she now owes more than her home is worth.

The effort has been a constant preoccupation for years now, and she’s communicated with other frustrated OneWest homeowners across the country. Turning OneWest’s fears of homeowner lawsuits into reality, she hired a lawyer who prepared a suit in case OneWest attempted to foreclose. In March, OneWest postponed seizing her home at the last minute. OneWest has offered another temporary payment plan, but Jeter is wary that it will end like the last one, with her payments simply lost. Currently, her home is set to be foreclosed next week.

In the meantime, HSBC and OneWest are awaiting a ruling in their lawsuit. The judge’s ruling could, as HSBC says in a filing [7], “cut that Gordian knot” and allow OneWest to provide a modification. The question for Jeter is whether that would come too late.

Follow on Twitter: @paulkiel [13]

 


 

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Which Banks Are Doing Loan Modifications?

Central Coast Homes For SaleOne of  the biggest things affecting the Santa Maria real estate market and the Santa Maria homes for sale just like in most markets across America are the number of homes that are in foreclosure or will be in foreclosure, due to the mortgage home loans on the properties going bad.  Even though the banks did receive some kind of bail out not can be said for the typical homeowner trying to get a loan modification because he lost his job or they cut his hours or any number of things that could of happened.  THIS IS A TON OF INFORMATION.

IF YOU WANT TO SEE WHICH BANKS ARE DOING LOAN MODIFICATIONS AND THE PERCENTAGES JUST SCROLL ALMOST HALF WAY DOWN .

Other than that I hope you get the information you are looking for because there is really a ton of it on here.

By the Numbers: A Revealing Look at the Mortgage Mod Meltdown

by Olga Pierce and Paul Kiel ProPublica, March 8, 2011, 1:37 p.m.

For the past year, we’ve been digging into the administration’s fumbling efforts [1]. We’ve crunched a lot of numbers along the way, and now we’re sharing what we found 2013 including loads of previously unreported data.

Using new Treasury Department figures, previously unreleased documents obtained through Freedom of Information Act requests, and new analyses of state and industry data, we have assembled the most detailed look yet at how the the mortgage industry [2] and the government’s main effort, the Home Affordable Modification Program (HAMP), have failed homeowners. It provides crucial context to the ongoing government investigation into mortgage servicing practices, which might lead to reforms [3] of how banks and servicers handle homeowner requests for modifications.

Here’s what we learned:

Total Pool of Delinquencies

Total Mods Each Month

(Source: LPS Applied Analytics [15] and HOPE Now [16])

The number of modifications each month has remained dramatically lower than the number of homeowners behind on their mortgages.

Although Treasury Department officials and mortgage servicers claim the industry has gotten better at handling modifications, the average rate of modifications in the past two years is not significantly different than the rate before HAMP launched.

The data for the total number of modifications provided by mortgage servicers comes from HOPE Now [16], an industry-headed coalition.

Percent of deliquent homeowners in contact with servicers

(Source: State Foreclosure Prevention Working Group [17])

Ideally, servicers would be in contact with troubled borrowers, discussing possible alternatives to foreclosure. But servicers aren’t doing that with most homeowners at risk of foreclosure-and they haven’t improved much. Servicers generally have multiple alternatives to foreclosure, including modifications, short sales and deeds in lieu, all of which are generally better outcomes for both homeowners and investors.

201CIf you have names, addresses, and phone numbers for your customers, it seems like you ought to be able to do better than reaching one out of three,201D said Mark Pearce, formerly North Carolina deputy commissioner of banks.

The data for the above graphic comes from the State Foreclosure Prevention Working Group [17] and covers 11 mortgage servicers that collectively handle about 35-40 percent of mortgages and a majority of subprime loans. The data show what percentage of homeowners who are more than two months behind are in discussions with their servicer about a possible foreclosure alternative.

Percent of seriously delinquent mortgages that have been…

Modified Unresolved Foreclosed

(Sources: Moody’s, ProPublica analysis)

A homeowner’s chance of getting a modification depends a lot on which company services the loan. In an analysis by Moody’s, Bank of America fared worst of all, providing less than half as many modifications as Ocwen, which specializes in servicing troubled loans.

The above chart is based on an analysis we did of Moody’s data on 300,000 subprime loans that had been more than three months behind in the last year or so. All had been packaged into mortgage-backed securities.

Moody’s also reported that getting a modification takes several months at all of the servicers, though some were worse than others. The worst was JPMorgan Chase, where the average modification occurred 11 months after the borrower fell behind. At Ocwen, the fastest, it was seven months.

As you can see, the vast majority of subprime delinquencies at Bank of America, the nation’s largest servicer, haven’t been resolved either way. About 41 percent of Bank of America’s loans in this analysis hadn’t even begun the foreclosure process, despite an average delinquency of 13 months. Another 27 percent of homeowners were in foreclosure but hadn’t yet lost their homes-the average delinquency there is two years.

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Non-HAMP Mods

HAMP Mods

Average

HAMP Delays Mods

(Source: HOPE Now [16])

Though HAMP was designed to make it easier for homeowners to get modifications, most of the people who applied when the program was launched in April of 2009 waited months for an answer. The result was a steep decrease in overall modifications. As that backlog was addressed, modifications temporarily increased but then returned to their pre-HAMP levels. Just before HAMP launched, there were about 125,000 loan mods per month. Since the program launched, there have been on average 125,000 mods monthly, including HAMP mods.

Just over one in five homeowners who applied for a HAMP mod have received a permanent modification.

Denied before trial

In a trial

Trial ended due to missed payments

Trial canceled for other reason

Got a HAMP mod

Mod ended due to missed payments

Paid off mortgage after mod

Number of Homeowners

(Source: Treasury Department, ProPublica analysis)

About 1.3 million homeowners who have applied for a HAMP mod were denied without being placed in a trial, a three-month period that is supposed to give homeowners a chance to show they can afford the new payments. Meanwhile, getting placed in a trial is just the beginning of a disappointing process for many homeowners: More than half of trials were canceled, most of the time despite the fact that the homeowner had made all of the payments. Trials have also frequently lasted far longer than the three months they are supposed to last. About six percent of those who’d applied were in a trial as of December.

The data, which covers through December, actually undercount the number of homeowners who have sought help, because it only includes loans where the servicer says it has responded to a homeowner’s HAMP application – about 2.7 million homeowners. There are no records for the many people who have applied but, often after months, not heard back from their servicer. [18]

Mortgage servicers, notorious for losing documents, cited missing documents in a quarter of rejections.

Servicer says documents missing

Mortgage payments already affordable

Mortgage does not meet criteria

Missed trial payments

Borrower does not need mod

Borrower withdrew from HAMP

Foreclosure better for investors

HAMP terms still unaffordable

Not primary home

Percent of Rejections

(Source: Treasury Department, ProPublica analysis)

In total, two million homeowners have been rejected from HAMP as of December: 1.3 million were denied even a trial modification and about 700,000 more had their trials cancelled.

The most common reason servicers cite for denying a modification has been that the required documents are missing or incomplete. Almost a quarter of rejections were for this reason. This occurred against the backdrop of widespread reports of servicers’ inability to reliably keep track of documents [19]. That means that many of those 460,000 homeowners may have been wrongly denied because the servicer lost their documents.

Over 500 homeowners have told ProPublica via a questionnaire that the servicer lost their documents. At least 300 times, homeowners were told they hadn’t supplied required documents that the servicer had never actually asked them for.

Note: HAMP defines an “affordable” monthly payment as 31 percent of the borrower’s gross monthly income.

So, you’ve applied for a loan mod: What are your chances of getting it with your servicer?

The eight largest servicers: Here’s what happened to applicants, as of December 2010:
No mod Waiting Got a mod
Denied Trial cancelled Currently in a trial mod Non-HAMP mod HAMP mod
American Home Mortgage Servicing 23% 2% 11% 37% 28%
Bank of America 29% 24% 8% 20% 19%
CitiMortgage 36% 18% 3% 24% 19%
GMAC Mortgage 53% 4% 2% 21% 19%
JPMorgan Chase subsidiaries 44% 9% 4% 29% 14%
Litton Loan Servicing 43% 10% 2% 33% 12%
OneWest 47% 10% 4% 17% 22%
Wells Fargo 31% 15% 5% 30% 20%

(Source: Treasury Department)

These are the breakdowns for the largest eight servicers.

Denied: You didn’t get a HAMP mod. You may have lost your home to foreclosure, sold your home through a short sale, or you might simply be waiting for further action from your servicer, including a possible offer of the servicer’s in-house modification.

In a trial mod: You’re in the program’s trial period, making payments to show you can afford your home with a HAMP mod. The trial is supposed to last three months but usually lasts longer [20]. From here, you’ll either end up with a HAMP mod or your trial will be canceled. If that happens, your servicer may still offer you a non-HAMP mod.

Trial canceled: You were denied a HAMP mod, either because your servicer decided you didn’t meet the program’s requirements or, less likely, because you didn’t make the trial payments. You may have lost your home to foreclosure, sold your home through a short sale, or you might simply be waiting for further action from your servicer, including a possible offer of the servicer’s in-house modification. Advocates say it’s worse for a homeowner to be rejected after making months of trial payments [21] than to be rejected up front.

Non-HAMP mod: Your servicer rejected you for a HAMP modification but has offered you an in-house modification. These mods generally are less affordable than HAMP mods [22].

HAMP mod: Your servicer offered you a HAMP mod.

Left in limbo: You might not fit into any of these categories, since servicers have struggled to process homeowner applications: Many homeowners, for example, go several months without getting any kind of response. [18] As we’ve noted earlier, this data, provided by the Treasury, only includes loans where the servicer says it has responded to a homeowner’s HAMP application. There are no records of how many people fall into that category.

Treasury claims servicers are improving, but its own data show otherwise.

Complaints as percent of calls to HOPE Hotline

(Source: HOPE Hotline [23])

Treasury officials-most recently, HAMP chief Phyllis Caldwell in congressional testimony in December-have cited the complaint data from a Treasury-sponsored hotline for homeowners to support their claim that servicers are getting better. Treasury officials generally point to decreases in certain narrow categories of complaints. But that obscures the general upward trend of complaints and sharp increases in the most common complaints, which are related to servicers wrongfully denying homeowners modifications.

Over the past year, Treasury Department data, obtained through a Freedom of Information Act request [24], indicate that homeowner complaints about mortgage servicers are increasing. Complaints are calculated as a percentage of total calls (excluding irrelevant calls like hang-ups and wrong numbers).

The Treasury Department’s log of complaints is also almost certainly an undercount. Known as the HOPE Hotline [23], it has not been advertised to homeowners as a place to lodge complaints about their mortgage servicer. In fact, many homeowners don’t know where to go to complain. When people do call, hotline operators do not solicit complaints but only record them if they are volunteered by the homeowner. Additionally, when a homeowner calls with multiple complaints (i.e., the servicer lost their documents and wrongfully denied them), only one is recorded. Logged complaints must fit into specific categories, and Treasury only added certain important ones in March of 2010, eight months after they began collecting the data.

A Treasury spokeswoman said that the increase in complaints was likely because there had been an increase in the number of homeowners denied modifications in 2010. According to program rules, homeowners are supposed to receive a denial notice that includes the hotline number. Many homeowners were denied after spending several months in prolonged trial modifications.

Overall, mods are more affordable, even including non-HAMP ones, though their terms are still less generous than HAMP.

Payments decreased 20% or more

Payments decreased less than 20%

Payments unchanged or increased

(Source: OCC and OTS Mortgage Metrics Report [25])

Before HAMP, most modifications left homeowners’ monthly payments unchanged-or even increased them. HAMP mods have affordability guidelines, which, for those lucky enough to actually get one, generally lead to a sharp decrease in monthly payments. There’s also evidence that HAMP has had a positive impact on the terms of modifications that servicers have offered outside the government program. Those non-HAMP mods, which outnumber HAMP mods, are now more likely to lower payments, but not as much as HAMP mods. According to recent government statistics [26]:

  • HAMP mods last year decreased homeowner payments by an average of $585
  • non-HAMP mods reduced them by an average of $332

Repayment Plans

Total Mods

(Source: HOPE Now [16])

In a return to its pre-HAMP practices, the mortgage industry has increasingly been putting homeowners who fall behind into repayment plans instead of modifications.

In a repayment plan, the homeowner catches up on missed payments by paying a portion of the past due amount each month on top of their regular payments. This is typically done over three to six months and is a far more difficult option for struggling homeowners than a modification, because it imposes an additional burden. Modifications actually change the terms of the loan forever and typically lead to a reduction in monthly payments. Government statistics [26] show that homeowners are twice as likely to re-default if the plan they’re offered increases their mortgage payment than if their payments are significantly lowered.

201CRepayment plans have always been what the industry has favored,201D said Diane Thompson of the National Consumer Law Center, because it’s easiest for the servicer. 201CNobody takes a permanent hit, it’s easy, quick, doesn’t require new underwriting, doesn’t require much thought.201D

Before HAMP, most solutions offered to homeowners were repayment plans. That changed for most of 2010 due to HAMP’s emphasis on mods as a solution, but now with new applications for HAMP winding down, servicers are returning to their preferred solution.

Unspent

Spent

(Sources: Treasury Department, ProPublica [27])

The Treasury Department set aside more than $37 billion from the TARP for two programs meant to help struggling borrowers, but little more than $1 billion has been spent.

HAMP has used so little of its funds [28] for a couple of reasons. It provides incentives for mortgage servicers, investors and homeowners only for completed modifications, but the program has achieved relatively few. Also, the incentives are paid out over five years for each loan. In a report in December, the Congressional Oversight Panel [29] estimated the Treasury would ultimately spend only about $4 billion.

About $7 billion was set aside for the Hardest Hit Fund [30], which provides subsidies to states for various foreclosure prevention programs. That, too, has been slow to get off the ground. Only $104 million has been spent so far.

You can see all of this data, broken down by state and servicer, in our bailout database [31].

For A FREE List Of Foreclosures & Pre Foreclosures On The Central Coast Click HERE

Central Coast Homes For Sale

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If you have any questions about buying a Santa Maria home for sale in the Santa Maria Real Estate market or any properties on the Central Coastand need to get a loan in Santa Maria, CA or any where in the state of so I California not just on the Central Coast, so I can do California home loans, and first time home buyer loans, as well as refinance home loans and just plain simple mortgage loans. So please contact me by sending me an email at: GenePerez@GMSLoans.net

I do also service all the nearby communities and other markets such as the Santa Ynez real estate market, Nipomo Real estate market, Arroyo Grande real estate market, Grover Beach Real Estate Market, and all other surrounding areas regarding the homes on the Central Coast.

my goal is to provide you with resources you need. I can also help in getting the financing for your home. If you have any suggestions or questions in how I can provide more or better

information please let me know. I have been helping my clients for the last 15 years on the Central Coast, Gene Perez – 805-448-7101 , DRE 01321588

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Important Disclaimer: Questions and answers provided on this website and by Gene Perez is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice.

Gene Perez is Licensed Real Estate Broker for Valley Hills Realty and a mortgage broker for Greater Mortgage Solutions.

This blog and its content is copyright of Gene Perez 2010. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge Gene Perez as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining Gene Perez’s

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Advice On How To Get A Loan Modification

Homeowner Tips for Getting Loan Modifications

by Srinivas Rao ProPublica, Sep. 15, 2010, 11:48 a.m.

ProPublica asked a simple question of more than 700 homeowners dealing with the administration’s mortgage modification program: Knowing what you know now, what tips would you give someone who’s struggling with a mortgage payment?Their advice: Get help, stay organized, and don’t give up.

In total, 718 homeowners, all of whom applied for a loan modification through the Home Affordable Modification Program, volunteered tips and tricks for struggling homeowners. While more than a third of respondents were skeptical about the value of program, the majority of respondents suggested simple steps homeowners should take to survive the process of applying for a modification. Culling through the hundreds of responses, three pieces of advice stood out.

Have you worked for a servicer in a loan modification call center? We want to hear from you.

Are you a homeowner who’s struggling to pay your mortgage? Are you seeking a loan modification through the government program? We want to hear from you.

Don’t do it alone. The most popular suggestion was a simple one: Don’t be afraid to ask for help. One hundred thirty-five respondents advised struggling homeowners to hire lawyers, contact their elected representatives, alert the media and file complaints with a variety of government agencies; they also advised homeowners to rely on emotional support from friends, family and other homeowners in the same situation. As one California homeowner put it, “Find others to talk to, or you will go crazy.”

One of the most recommended resources for struggling homeowners was the HOPE Hotline, at 1-888-995-HOPE. The Treasury Department-sponsored hotline, operated by the nonprofit Homeownership Preservation Foundation, helps connect callers with HUD-approved counselors who can provide struggling homeowners with information and support. Homeowners who suspect their servicer of making mistakes can escalate their case to a special HOPE Hotline team. The Hotline can also connect homeowners to local HUD-approved counselors; homeowners can access the list of counselors directly at HUD’s website.

Stay organized. Research and organization were important themes among respondents, with 125 of them advising homeowners to take notes, to do online research, and to get everything in writing during their campaign to get a loan modification. For many respondents, the process of applying for a loan modification stretched across months, involving an ever-changing parade of customer representatives that 64 percent say gave them contradictory answers at times. Respondents recommended everything from pen and paper to certified mail, phone recorders and video cameras to keep track of the process. As one New Mexico homeowner explained, “document your journey thoroughly — you will never be able to recall or communicate all the madness you will go through.”

Just keep trying. Another 48 homeowners stressed the importance of making mortgage payments by any means possible. Despite what 52 percent of respondents say they were told by their servicer, homeowners do not have to be behind on a mortgage to be eligible for a HAMP modification. By making their monthly payments, however painful, struggling homeowners can prevent themselves from descending into a spiral of debt, and perhaps avoid the loan modification process altogether. As one Massachusetts homeowner put it, “Sell your furniture, car, dog and your soul to the devil to get your mortgage payment. The banks are liars, incompetent and not trustworthy.”

Others offered optimism to those searching for loan modifications, asking struggling homeowners to not give up the fight. Ninety respondents told homeowners that they had to “be relentless,” to “persevere” and to “just keep trying.” Many who stuck with the program remarked that it eventually paid off, with one homeowner saving over $25,000 after treating the application process like “a part-time job.” While most described the struggle as heroic, at least one respondent put her advice bluntly: “It sucks, but stick with it.”

Still others gave homeowners common-sense advice, ranging from tips on how to getting a consistent story from your servicer (by building a relationship with one or two representatives you can reach directly) to how to improve your application’s viability (by watching your spending and not using your ATM card for eating out). One Maryland homeowner spoke for a handful of respondents in stressing the importance of being polite. “Above all, don’t be combative on the phone, or the entire conversation and time spent on hold will be for nothing.”

But some respondents were less hopeful about the value of the program. 193 respondents advised homeowners to steer clear of the program altogether, describing it as “pointless,” “humiliating,” “hopeless” and “not worth the hassle.” “Quit paying, save your money and find an apartment,” said one Nevada homeowner, echoing a common theme of many of the more downtrodden responses. “They’re going to get your house anyway they can.”

To many of these homeowners, the loan mod program is at once deeply frustrating and their best shot at securing their home and financial future. They have spent months, sometimes years, navigating a bureaucratic maze set up by their servicers, all the while in the dark about the final the status of their loan modification.

For struggling homeowners looking to start the process of a loan modification, one Florida homeowner may have had the most practical advice of all: “Pray.”

For A FREE List Of Foreclosures & Pre Foreclosures On The Central Coast Click HERE

If you have any questions about buying a Santa Maria home for sale in the Santa Maria Real Estate market or any properties on the Central Coastand need to get a loan in Santa Maria, CA or any where in the state of so I California not just on the Central Coast, so I can do California home loans, and first time home buyer loans, as well as refinance home loans and just plain simple mortgage loans. So please contact me by sending me an email at: GenePerez@GMSLoans.net

I do also service all the nearby communities and other markets such as the Santa Ynez real estate market, Nipomo Real estate market, Arroyo Grande real estate market, Grover Beach Real Estate Market, and all other surrounding areas regarding the homes on the Central Coast.

my goal is to provide you with resources you need. I can also help in getting the financing for your home. If you have any suggestions or questions in how I can provide more or better

information please let me know. I have been helping my clients for the last 15 years on the Central Coast, Gene Perez – 805-448-7101 , DRE 01321588

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Important Disclaimer: Questions and answers provided on this website and by Gene Perez is to be considered general information, and is not intended to substitute for informed professional financial, tax, legal, investment, accounting, or other professional advice.

Gene Perez is Licensed Real Estate Broker for Valley Hills Realty and a mortgage broker for Greater Mortgage Solutions.

This blog and its content is copyright of Gene Perez 2010. All rights reserved. Any redistribution or reproduction of part or all of the contents in any form is prohibited other than the following: you may print or download to a local hard disk extracts for your personal and non-commercial use only. You may copy the content to individual third parties for their personal use, but only if you acknowledge Gene Perez as the source of the material You may not, except with our express written permission, distribute or commercially exploit the content. Nor may you transmit it or store it in any other website or other form of electronic retrieval system without obtaining Gene Perez’s



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