We the People vs the Banks on loan modification

There is a petition circulating and picking up steam in the online world designed to get the attention of lawmakers on Capitol Hill. It is simply titled, The Petition to the US Government from American Homeowners.

With hundreds of thousands of homeowners facing foreclosure and running into bureaucratic delays at the hands of less than sympathetic bank employees, constantly lost documents, trial modifications never mailed out, trial periods past but never made permanent and foreclosure sales in the midst of supposed loan modification review the cries for fairness & accountability are reaching a crescendo.

The HAMP system as it stands rewards banks for making a trial modification by advancing them nearly 1/3 of the monies available for the entire modification at the time homeowners enter the trial. Given the truth that entering the trial modification is such a small step in the process, along with the banks less than stellar performance on making these modifications permanent it appears that the compensation may be premature and out of line.

When a borrower enters the trial modification the servicer receives $1,000. Bank of America who has placed over 200,000 borrowers into trial modifications received has received over $200 million dollars for simply placing homeowners into "trial modifications" with no guarantee of ever getting a permanent modification. At one point the bank had rushed 180,000 trial modifications into the mail without having complete income documentation, leaving in doubt the ability to complete these modifications.

As of the latest Treasury report, Indymac / OneWest has entered 19,623 homeowners into the trial modification phase and accomplished an astounding ZERO completed modifications; yet this dismal effort has netted the investment group over 19 million in taxpayer dollars. Many borrowers, and consumer advocates complain that Indymac is making no effort to make these modifications permanent and in fact has invented new ways to deny modifications.

Many servicers mass mailed trial modifications to at risk borrowers to get their share of the free money offered for simply getting a borrower into the trial plan. They then seemingly pull out all the stops to halt the process and deny making the modifications permanent.

Indymac borrowers all across the country are searching for attorneys to bring class actions for the trial modifications that were sent out and denied before the 2nd payment was received by the bank. Even in these cases the servicer was paid $1,000 for entering the homeowner into the trial period and then promptly dumping them out of the plan.

I have spoken to homeowners who say the lender constantly get the financial income and expense numbers wrong and will not listen to reason or go over the numbers they use to deny the modification. Mitha, an embattled homeowner from Brooklyn, NY complains "the customer service reps blame the "negotiator" and will "never" put that person on the phone" she went on to say; "calls to Indymac employees result in well scripted answers that always end in favor of the bank".

The current system appears to be a mess and the trial period has created a new layer of bureaucracy in an already bogged down system. The financial benefit gained by servicers for simply putting a homeowner into the trial is great. The monies left to make the modification permanent pales in comparison.

Banks who made the original loans with little or no documentation and closed them sometimes in less than a week from application now routinely take 5,6 or 7 months to approve a loan modification. The irony doesn't go unnoticed.

To further complicate the situation lenders are outsourcing some of the work to 3^rd party providers who are even worse at processing the paperwork, and have little access to a borrowers account. Bank of America uses the HOPE team a 3^rd party that goes out of its way to make homeowners believe it is part of the bank. Until recently SunTrust used LoanCare this outsourcing caused so many delays and problems Suntrust recently pulled back all of its files from LoanCare. Some lenders are using Zenta, which has a myriad of addresses and if you send paperwork to the wrong address it is returned by Zenta employees as undeliverable.

The Petition to the US Government from American Homeowners seeks to address the many concerns of homeowners facing foreclosure.

Click Here to See The Petition

HAMP | HAMP Loan Modification Report Card

HAMP HAMP Loan Modification

A How To Guide

On March 4th, 2009 the Obama administration revealed its plan to help millions of distressed homeowners in danger of foreclosure. The program was proudly touted as the definitive way out of the current housing and mortgage crisis.

The year has ended and since April 2009

the program is responsible for 728,408 active modifications. 697,026 are in the trial period

and 31,382 have been made permanent.

Although there has been plenty of time for loan servicers and lenders to strengthen their efforts and start making a considerable difference in preventing home foreclosures, many servicers have repeatedly chosen to aggravate the crisis through noncompliance and excuses.

Prior to the introduction of HAMP, servicers' efforts to modify loans had picked up a considerable amount of steam. By March of 2009 loan servicers' efforts in private in house modifications were running at a pace of 120,000 per month. That means that if left to their own devices servicers and lenders had they continued at that pace would have completed modifications on more than 1.2 million loan modifications.

It is now harder than ever to get assistance from your lender due to the new heavy documentation and government bureaucracy created by HAMP. It is not however an impossible task. Even with its bureaucratic red tape many homeowners have been able to get payment reductions that helped them save their homes.

If you are looking for assistance with HAMP be sure to get up to speed and learn everything you can about the guidelines and requirements. Talk to your lender BEFORE submitting an application. With HAMP you only have one bite at the apple. You have to get it right on the first try.

Here is what you will definitely need to submit a complete file to your lender:

Last 4 paystubs for everyone in the house who earns money.If you don't have paystubs, you will need a cash letter from the wage earner defining what they take home monthly. (Yes your lender WILL accept this)(It's in their best interest).

• 2 years W2's for each wage earner in the home.


• 2 years tax returns


• 2 months bank statements - your lender will require ALL pages of your statements. If you don't have them, go to your bank and get a 2 month printout, make sure that someone in the branch stamps and signs the printout or your lender may not accept it


• If you are self employed you will need to provide a profit and loss statement that spans a minimum of 3 months, I recommend you do this for a 6 month period


• A well written concise ONE PAGE hardship letter


• An income and expense sheet that shows Monthly Numbers for Gross Income, Net Income and all household expenses

If you take the time to prepare and do it in a well organized manner you will improve your chances of getting a modification under HAMP greatly.

Get educated QUICKLY; learn everything you can about the HAMP guidelines and what your lender offers in the way of assistance. Plan your request for assistance and be organized and prepared BEFORE you submit anything to your lender.

Remember the disclaimer they read you when you call? It's the one where they tell you they are required by law to advise you they are attempting to collect a debt and anything you tell them will be used for that purpose. No matter how nice the representative sounds, they work for the lender and they are there to help collect your payments.

Homeowners looking to take advantage of HAMP should always make sure to Get Educated so they can Get Modified and Get On With Their Lives...