Homeowners Defaulting in Loan Modification Program
Struggling homeowners who received loan modifications under a federal government program are defaulting on their mortgages at an alarming rate, according to a watchdog report released Wednesday.
The report from the special inspector general for the Troubled Asset Relief Program said the Treasury Department’s Home Affordable Modification Program, or HAMP, has failed to ensure that mortgage reductions are sustainable.
House Republican leaders put an emphasis on overhauling tax code ahead of talks over the debt limit.
Home loans modified in the third and fourth quarters of 2009 are now defaulting at a rate of 46 percent and 39 percent, respectively. As of the end of March, more than 312,000 homeowners have defaulted on mortgages modified under HAMP, according to the report.
“This is a significant problem,” said Christy Romero, special inspector general for TARP. “When homeowners fall out of these modifications, all of a sudden they’re facing huge mortgage payments. If they can’t afford it, they’re going to get foreclosed on.”
The Obama administration created HAMP in 2009 as a lifeline for the millions of homeowners facing default in the wake of the housing bust. The program provided $75 billion to help lenders reduce borrowers’ monthly payments to 31 percent of their income.
At the time, the administration estimated that HAMP would help as many as 4 million homeowners avoid foreclosure. But the program has been plagued with delays and has faced criticism for not reaching enough struggling Americans.
Rest here…
Full report below…
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4closureFraud.org
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I still don’t get it! I don’t understand the mentality of people. I went the modification route but only because I still had ‘some’ equity position but like Shelly Erikson I made 5 of the 6 modification (trial)payments and just before the 6th was due they told me I was ‘unapproved’. Went into foreclosure and I fought like a dog (pro se). Foreclosure was dismissed with prejudice and finally the so-called lender released the mortgage of record. These borrowers who signed these modifications that were already underwater was jsut a ticking time bomb. You are now tied to an underwater mortgage via the modification AND as posted above you now have a brand-new contract that wiped out all of the previous fraud! These people only gave me more power to do what they intended to do all along – foreclose and take your home! Now I’m fighting another foreclosure with Chase on my daughter’s home that I am signed on since ’07. It’s one of those Stern’s lawsuits that they think they can cover up with a name change! I got my check for the fraudclosure agreement and using that check copy and letter for filing “discovery”. It’s an on-going battle but for those that just gave up with the modifications I still do not understand their reasoning. Clouded and ‘zombie’ titles, robo signing and the like are so prominent…
If your mortgage or deed was being “Serviced” most likely it went to MERS. Once they were scrutinized and turned into securities the Promissory Note had to be destroyed. They can not have a security and a note at the same time. Once this took place there is no valid contract between the homeowner and the lender. For there is no Lender. Most state laws all include “Lenders”.
Since there is no contract and the banks knew of this they had to come up with a plan called “Modification”. Once the homeowner went for modification and put their name on that piece of paper the banks then had a contract with you and the bank or servicer. Then comes the foreclosure.
I personally refused Bank of America’s Modification only because of a “Gut Feeling”. I did not want to lock into a contract of any kind with BofA. I have refuse to pay on my mortgage since 2009 and they have yet to foreclose on me.
Oh they try to threaten me but it does not work. I have no contract with any servicer. Now Bank of America turned it over to Specialized Loan Servicing in Colorado. What a Joke they are. They are worse than Countrywide if you can believe that or not.
I am still on the fight though.
Or the banksters are doing what they did to me. I paid five modification payments then received an unapproved letter for no good reason. I was told I was approved, not on a trial plan. However a letter came with the mod coupons telling me if I made three trial payments on time I would receive my final modification That was the only hint I was on trial. Over the phone i was told I was approved. I made every payment and did what the banks asked then received a letter I was unapproved. I thought it was a bad mix up and called the bank, to be told , due to Obama changes I was now unapproved, therefore my mod payments were considered to be partial payments so I was in default and foreclosure. I am not even on that list to be paid the funds for doing this to me. I received a two thousand dollar check penitence pay for the mod fraud while not in default framed to be in default. It has cost over twenty thousand in litigation fees. Most people I know that received the mods in 2010 on had this same letter come to them I received and most due to the economy continuing to decline can not afford the mod the bank deceived them with then due to a drain in their income due to the bank crimes being allowed to continue breaching the settlement plan. I just received a letter that due to me not making the mod payments they told me in October of 2010 they denied me after five payments, my house is in accelerated default, by a fraud assigned by a fraud. WAMU never transferred the notes to Chase nor anyone after Chase.
This article may be the end game for the banks.
READ THIS CAREFULLY.
//deadlyclear.wordpress.com/2013/04/27/mers-too-many-dead-ducks/ And they all née explicit consent…UETA…:
MER-TOO-MANY-DEAD-DUCKS…….
A game changer for the alleged lenders and con artist Washington RCW listed below protects the homeowners from MERS electronically filing without their explicit consent to do so and no one did. Not one of us which voids the contracts
Washington did not adopt UETA and E-Sign doesn’t apply since we have a statute addressing the issue RCW 19.34.320 [“No digital message shall be deemed to be an instrument under Title 62A RCW unless all parties to the transaction agree, including financial institutions affected.”] http://www.ncsl.org/issues-research/telecom/uniform-electronic-transactions-acts.aspx
Overview of UETA Section 16
[0012]
UETA Section 16 introduced the concept of a transferable record and leveraged the legal requirements for controlling an electronic chattel paper as defined UCC 9-105 to specify the legal requirements for having control over a transferable record. However, it restricted the scope of a transferable record to be an electronic record that is either a note under Article 3 of the UCC or a document of title (i.e. title) under Article 7 of the UCC. Hence, transferable records are electronic equivalents only to either paper promissory notes (i.e. negotiable instruments) or paper documents of title. UETA Section 16 also requires the issuer of the electronic record to explicitly agree that such a record is to be treated as a transferable record.
Of course they are going to default! Like a Chapter 13, if you didn’t make enough money before and you have no windfall or new source of income, you aren’t going to make those payments when they add everything to it. Many of the modifications had increased balances, no principal reduction, increased escrow added to the back end. Not only that the entire deal put them underwater on their mortgage with no way to sell or get out. The handwriting on the wall is that they will default and get out and give up. It was always necessary to reduce principal to coincide with current market value. That was NOT done in the majority of cases. Still is NOT being done or offered NOW. The entire process was never conducive to saving homes or helping the homeowner. A few people got a little spending money and a lot of lawyers made a bundle but the whole mess is still a mess and the homeowner feels helpless!
There will be a second wave of default. Property values continue to settle and it ain’t over yet!