According to a recent news article, 7 million households are behind on mortgage payments.
Since March of 2009, when the Home Affordable Modification Program (HAMP) program began, until March of 2010, there were 227,922 permanent modifications approved. In the same time period, there have been over 3 million foreclosures. I am beginning to think that the mortgage modification program was more of a publicity stunt, than an actual way to help struggling homeowners. In fact, I am also beginning to think that the program is just a way for the banks to squeeze a few thousand dollars out of struggling family’s pocket by giving them hope that a permanent modification is on the way. The permanent modifications rarely get approved.
I have ZERO clients who have been able to secure permanent mortgage modifications through the HAMP program. I have asked several other attorneys and none of them know of anybody who has received a permanent modification. Here is how the mortgage lenders trick you believing that you can keep your house.
- You seek assistance because you see trouble on the horizon.
- The mortgage company tells you you need to get behind on your mortgage payments to be eligible for assistance.
- You get behind on your mortgage payments in order to become eligible for help.
- You fill out a ton of paperwork and the bank determines that your new “Trial Payment” will be some amount less than you currently pay.
- They send you a contract where you agree to make the trial payment for three months while they process your paperwork.
- You make your three trial payments.
- They do nothing.
- You call and say “I made my three trial payments and lived up to our contract, where is my permanent modification?”
- They respond “We are really behind in processing the modifications, please continue to make trial payments.”
- You receive several phone calls each month from a call center operator who speaks broken english asking for updated documentation.
- You provide the requested documentation.
- You continue to get calls asking for the documentation you have provided.
- You eventually send the documentation at least three or more times until they realize they have it.
- A new month begins and you are called many more time asking to provide updated documentation.
- Six to eight months later, a person actually looks at your file.
- That decision maker requests even more information.
- The person tells you that you are not eligible for a permanent modification because….
- The bank begins to make collections calls in order to collect the several months of partial payments.
- The bank begins foreclosure proceedings.
- Your house is eventually sold at a fraction of the price you owe.
- You would love to buy the house at the new, lower price, but are unable to do so because your credit is trashed (and the trial payments are not reported to the credit bureaus as regular ad timely mortgage payments, they are reported as non-payments).
The system is really a brilliant move on the part of the banks because if you are behind on your mortgage payments and consider bankruptcy as an option, you will have a tough time keeping your house if you are behind on your mortgage payments going into a Chapter 7 bankruptcy.