On Fri, Dec 4, 2009 at 8:25 AM, Jean asked:
I am wondering if any of you have experience with the Obama Administration’s modification program, HAMP. If so, I am wondering if you think the NY Times has it right in this column about why so few of these modifications are becoming permanent. http://www.nytimes.com/2009/12/04/business/economy/04norris.html?_r=1&scp=1&sq=modification&st=Search To move from trial to permanent modification, a borrower needs to make the payments for three months and get in required paperwork (hardship statement and proof of income). The story reports on experience at just one servicer, Chase, and says that there about a quarter of those with trial modifications made no payments during the three-month trial and in total nearly half failed to make all three payments. Of the half that made all three payments, only a quarter got in all the required paperwork—a hardship statement and proof of income. The column makes it sound like servicers are doing everything they can and borrowers are failing to follow through. There is no mention of whether servicers might be making it a little difficult or unclear how and what to submit.
Dear Jean:
Great book written years ago entitled something like "How to Lie with Statistics." Tells you all the ways news media skews statistics to get a desired result. In this case, it won't matter whether the statistics are right or not. What isn't being reported is how those statistics are being measured.
Three quarters of the people who make no payments consists of those very same people who were sent a Trial Loan modification on a Friday and did not get paperwork until Monday, and the paperwork states that it must be returned by Tuesday, and must be notarized. I had one yesterday, Bank dated letter last Friday, didn't mail out until Monday. Didn't arrive until Wednesday and paperwork was due on Tuesday. So we called Home Retention, and they stated that they were very sorry that the homeowner didn't return the paperwork on time and now he no longer qualifies for a loan modification. He will have to reapply and wait for another trial loan modification package to come out. What crap is that? So when they say that no payments were made usually its because the homeowner didn't get timely paperwork.
Let's look at another reason no payments are made. The bank sends out a trial loan modification which does not conform to the HAMP program guidelines. They require the homeowner to pay two or three reasonable payments followed by a balloon payment for all the arrearages. I can fax you proof of this statement of all the trial loan mods that were sent to my clients which required a balloon payment in writing. The contract REQUIRED them to promise to make a payment that the bank fully knows well that it is impossible. So we contact the bank and the representative is instructed to tell us not to worry about the balloon payment because that last payment will be waived if they make the first 2 or three payments. I am assured that the final loan modification will be issued before the final ballon payment. So I ask the representative if I can record this assurance because I know that the contract doesn't have an integration clause and I could use the permissive recording as parol evidence. What happens? REFUSAL. I ask for a fax number so I can send something in writing to confirm the understanding. REFUSAL to give a fax number. I ask if I can fax to home retention and told that they will have to get back to me. More bank Crap.
I have other colleagues who have sent in these agreements and when the client did not make the balloon payment they got a rejection letter from the lender stating that because they didn't make all the payments they didn't qualify for the Hamp program.
I have yet another client who made all of the payments except the last balloon payment. Before that payment came due the lender sent us a letter telling the client to keep making the same monthly mortgage payment and they would then send a final loan modification out once we provided additional information. I have the fax confirmation sheet proving that I sent all the information they requested on a timely basis. Proof that the mortgage payment was made, was sent with the information. They credited the account with over 15K in payments in a four month period. The lender then sent a letter stating that the borrower no longer qualified. They stated in the letter that we had 14 days to dispute the determination. This letter was sent on August 18, 2009, The letter arrived in California on August 22, 2009, However, their property had been sold at a foreclosure auction on August 21, 2009. More Lender Crap. I called to find out what happened as was told that because he didn't make all of his payments (the 22K ballon payment) he failed hsi trial loan modification plan! More bank crap. Now mind you on this one I sued the bank and am fighting off the eviction now.
Now let's look at the documentation issue. The banks are constantly reporting that they didn't get documents. I have learned to use a fax confirmation sheet which copies the first page of the document faxed onto the confirmation sheet. I have learned to fax documents one at a time. Because if I fax more than one page at a time, the lenders generally claim to deny getting the documentation. So I then follow up with sending to them the Fax Confirmation Sheets proving what was faxed. The new denial letter comes stating "oh yeah we found the paperwork, but you no longer qualify." I point out to them that the documenttation has not materially changed in any way, and ask "How is they qualified over the phone, yet not on paper when the paper PROVES what was stated over the phone. The response generally is "The lender is no longer participating in the loan modification." MORE BANK CRAP!
I can assure you that the statistics are ALARMING as to how many times the bank claims that paperwork was not sent, when in fact it was sent both by fax and by mail. I have over 50 fax confirmation sheets in one instances where the lender keeps stating that I have the correct number but nothing is coming to them.
I sure would like to know who is buying off the media in the servicing industry. Homeowners don't have the resources, neither do all the solo attorneys who are trying to help these homeowners to run an add in a newspaper to show the world what lying, incompetent, and bad faith acting the servicers really are.
Also think about this. I have one client who lost her job and wen to train with Bank of America as a customer service representative. She informed me that she quit the program 2 weeks in because it sickened her to be trained to stonewall homeowners. She was told that when she got the initial phone call she was to run a program on her computer that would say whether the borrower qualified for a loan modification. She got curious to run some numbers when every number she put in for one home owner came back as either the borrower made too much money or too little. She said to me that despite repeated attempts to ascertain a number that would work, no amount of income would every qualify the borrower. The average homeowner will call in, see they are not qualified for one reason or another and just give up.
In California they passed SB 94 which makes it a crime to take any money or anything of value like a post-dated check, or a deposit into an attorney client trust fund, in order to apply for a loan modification. One can only be paid after the months of aggravation one goes through to get a loan modification if one is had at all.
Now let's add insult to injury, there is a case in California that states that unless the lender signs the loan modification agreement it is absolutely unenforceable under statute of frauds. The same case states that unless new and additional consideration is given for the loan modification, other than the payment of money which is already owed, the agreement is invalid. I can't believe the banks are really going to do this, but seeing all of the bad faith tactics I have seen in the past two years, I firmly believe that they will NEVER in most instances send back a signed agreement. I firmly believe that the day will come that the banks will sell off the notes and the new note holders will demand full payment of all the arrears and CLAIM that the Loan modification agreement is not enforceable as against them.
It is absolutely sickening to see who the banks are acting under the circumstances.
So if you ask me, those statistics are probably right. But they are twisted and skewed by the banks own bad faith tactics that virtually guarantee that most homeowners, whether they have an attorney or not, will not get a loan modification that was contemplated by the HAMP program, no matter how well qualified they may be.
Thanks for reading the rantings. Maybe someone high enough up in the world will read this and understand that we are really trying here, but there is as much incentive for these lenders and servicers to give a fair and reasonable loan modification as there is in offering 13 year old a dollar to go out and clear a cow pasture of cow pies.
Okay enough of my ranting and raving.
Best regards,
R. Grace Rodriguez
-818-734-7223-
