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Facing foreclosure? Is Chase your mortgage company?  Have you applied for a loan modification with them to try to save your home? Then you need to read this.  You also need to read this if you or someone you know was denied a loan modification because the hardship was not considered permanent.

In an article for ProPublica dated February 7, 2010 Paul Kiel reported that Chase has improperly denied some applications for loan modifications.  The reason they gave for the denials is that the applicant’s hardship was not permanent.

In his article Mr. Kiel reports that ProPublica found several cases denied for this reason.  They all occurred in November of 2009.

• One case involved a mortgage broker.  In the paper work he submitted to Chase the broker indicated that he felt that the steps taken by the Obama Administration might turn the Housing Market around.  If that occurred, his income might increase.  Because of that Chase denied his request for a loan modification.
•  Another case involved a lady in California.    Chase denied her request because they said her income had not decreased.  She works as an  x-ray technician.  Because her salary was not high enough, she delivered pizzas three nights a week to supplement her income.  The interest rate on her mortgage was 9.5%.  The monthly payment on her mortgage was over 50% of her income.  When she couldn’t pay the property taxes early in 2009, she fell 2 months behind on her mortgage payments.  She had applied for a loan modification in the spring.  Chase cut her monthly payment from $3,350 to $1,778.  She was able to make these payments and made six before they denied her request for a modification.

The sad thing is that Chase misinterpreted the guidelines for the Making Home Affordable Program.  In December the U S Treasury advised the mortgage companies participating in the program that they could not deny an application because a hardship was not considered permanent.

If Chase denied your application because they felt your hardship was not permanent, take action immediately.  The problem is that the guidelines for the Making Home Affordable Program that once a mortgage company denies a modification, there is no provision for an appeal of that decision.    

If you tried to get the loan modification on your own, speak to a lawyer or an expert in loan modifications.  Explain what happened and get them to represent you.

You may have to file a new application for a loan modification.  If you do, follow up with Chase regularly to make sure that they are processing it.

You can also contact a housing counselor at  1-888-995-HOPE (4673).  Explain that Chase denied your application because they felt your hardship was not permanent.  Add that you understand that this denial was incorrect.  Ask them if there are any steps you can take to get Chase to reopen your case.

You may have read this far and said that your mortgage company is not Chase.  However, they denied your application for the same reason – your hardship is not permanent.  If that has happened, I recommend that you do the same.  Get a lawyer or an expert in loan modifications to help you.  Also call the housing counselor at  1-888-995-HOPE (4673).

The same is true for any family members and friends you have who may have been denied a loan modification for this reason.

In order to save your home from foreclosure, you need to know as much about the process and what steps you can take.  This is not difficult.  You can become an expert in a short period of time.  There is much information available to you.  One source is my EBook.  To get more information on it, please click Stop Foreclosure.

Much Success,

Mark Elkins

If you have been reading the posts here on my blog, you know that in the past I have commented on the poor performance of Bank of America in the Making Home Affordable Program. 

 The Largest Mortgage Company

The Lowest Percentage of Permanent Modifications

 On January 15, 2010, the U S Treasury released the monthly Performance Report for mortgage companies in the Making Home Affordable Program through December of 2009.  The report showed that through December Bank of America had authorized permanent modifications on 3,183 loans out of the 292,305 loans on which trial modifications had started.  That is 1% of the total.

 There were 9,178 permanent modifications pending.  That is 3% of the total.

 Let’s see – 1% plus 3% is 4%.

 Would anyone say that Bank of America is doing a good job?  I am sure that you would say no.  I also am sure that you would agree that many have to be outraged that the largest mortgage company in this country is treating people facing foreclosure so poorly.

 Bank of America’s Disgraceful Performance

Has Caught the Attention of Others

 The lack of help Bank of America is giving to people who have loans with their company and are facing foreclosure has caught the attention of various consumer advocacy groups.  One of these is the PICO National Network PICO).  This network represents more than 1,000 religious congregations with over 1 million members from 40 different denominations across the United States. 

 Representatives from PICO have met with officials from Bank of America at various times since 2008.  At these meetings they looked for Bank of America’s help in reducing the number of foreclosures.  They have been frustrated because Bank of America has not cooperated.  The bank has done nothing to help more of their customers save their homes.

 PICO Increases Efforts Against Bank of America

 On Tuesday night, January 12, representatives from PICO had a meeting with nine high level executives from the Bank of America at a catholic church in Antioch, California.  Antioch is in the San Francisco Bay area.

Also joining the representatives from PICO were leaders from National People’s Action and labor leaders from the Service Employees International Union (SEIU).  These groups are also very concerned about the role of Bank of America in the growing number of foreclosures across the United States. 

Reverend Lucy Kolin of PICO was the main spokesperson for PICO and the other consumer advocate groups.  They made these requests of Bank of America:

• Do all they could to help people facing foreclosure save their homes.
• End predatory lending.
• Get their act together and approve loan modifications for more of the people eligible for them.
• Stop hurting families and communities.

The representatives from Bank of America had no responses to these requests.

Picture This – Witnesses to the Meeting

Because of their unsuccessful discussions on this matter with Bank of America in the past the people from PICO invited representatives from other groups to sit in and observe what transpired during the meeting.

Just picture this.  There were over 50 people who witnessed the discussion at this meeting. These included the local congressman, representatives from the local and state governments and representatives from other national organizations. 

People Praying Next Door and Across the Country

 There is more. 

Next door hundreds of residents from the San Francisco Bay area gathered to pray and let the others know of the poor treatment they received from Bank of America.  After the meeting ended the representatives from PICO and the other organizations updated them on what transpired at the meeting.

PICO also enlisted people in other cities across the country to pray that they would get a positive response from Bank of America at the meeting.  Individuals and groups prayed prior to the start of the meeting and while it went on.

A Well Thought-out Ongoing Strategy to Get Bank of America

To Change the Way They Handle People Facing Foreclosure

 PICO is intensifying their campaign to get Bank of America to change its practices.  What they have planned will not only get more visibility to the way the bank is treating people facing foreclosure, it will also hurt the bank financially.  Here are some of things they have planned:

 They are asking the individual people, churches and religious denominations as well as other institutions and local and state governments to withdraw any money that they have invested in accounts at the Bank of America.

 They are sending delegations to meet with the chief executive officer and members of the Board of Directors of the bank.

 They will petition the U S Treasury to investigate the mortgage companies participating in the Making Home Affordable Program.  The Treasury should impose financial penalties on the Bank of America and any other mortgage company not following the guidelines of the program.

 It will be interesting to watch as this develops.  I imagine that other consumer action groups will urge that people withdraw their money and close their accounts at the Bank of America.  If enough accounts are closed, the bank will have no alternative but to change their practices.

 What about You?

Here is your opportunity to let your opinion be heard.

I urge you.  If you have any accounts at the Bank of America, go into your local branch.  Close the accounts.  Let them know that you are doing it because of the way they are handling people facing foreclosure.  You are upset with their poor performance in the Making Home Affordable Program.

Don’t stop there.  Talk to your relatives and friends about this.  Urge them to do the same if they have any accounts at the bank.

If enough of us do this, we will catch the attention of the executives at the Bank.

If you are facing foreclosure and your mortgage is with Bank of America, hire a lawyer or an expert in loan modifications to represent you.  You cannot trust that the bank will process your application for a loan modification promptly or correctly.  You also have a far greater chance of losing your home if you try to handle everything on your own.

Please learn as much about the foreclosure process and the steps you can take to save your home.  You need to know this even if you hire someone to represent you.  My EBook can help you.  To find out more about it, please click Stop Foreclosure.

Much Success,

Mark Elkins

I don’t know if you saw or heard about it. 

 On December 30, 2009, the city of Memphis and Shelby County, Tennessee where Memphis is located filed a federal lawsuit against Wells Fargo.  The suit alleges that Wells Fargo had their loan officers steer members of minority groups who were buying homes and looking for mortgages into subprime mortgages.  This was done even though many of these people may have qualified for conventional or FHA mortgages. 

 The suit alleges that Wells Fargo took this action to increase their profits.  They did not think about the ultimate outcome that might occur.  The interest rates on these subprime mortgages were quite a bit higher than the interest rates on either the conventional or FHA mortgages.  Many of the people who got these mortgages could not continue to make the monthly payments and foreclosure action commenced.  As a result of Wells Fargo’s action a disproportionate and unnecessary number of foreclosures were finalized.

The suit contends that Wells Fargo targeted African-American neighborhoods in Memphis and Shelby County. Over 43% of the foreclosures on Wells Fargo’s’ mortgages in Memphis and Shelby County were on homes in these neighborhoods even though  only about 15% of all of their mortgages in the area were on homes in these neighborhoods.  Over 59% of their mortgages in Memphis and Shelby County were on homes in white neighborhoods. Foreclosures occurred on only 21.5% of these mortgages.

 Former employees of Wells Fargo are supposed to confirm that the company gave their loan officers financial incentives to steer people into subprime mortgages where the interest rates were higher even though they qualified for conventional or FHA mortgages.  They frequently told these people to make a minimum down payment.  They also encouraged them to state their income and assets rather than to fully document it in the paper work for their mortgages. 

 The suit contends that as a result of the foreclosures that have been finalized, many homes are now vacant.  Squatters have moved into some.  There has been an increased risk of fire and crime.  This has created additional costs for Memphis and Shelby County. 

 Property values in these neighborhoods have dropped.  This has led to a loss of revenue from real estate taxes for the city and county. 

 Wells Fargo Also Sued By Baltimore and Illinois

 In 2008 Baltimore and the state of Maryland filed a similar suit against Wells Fargo.  In August of 2009 the Attorney General of Illinois filed a suit alleging that Wells Fargo targeted people in African-American and Latino neighborhoods in Chicago for subprime mortgages.  The interest rates on these were higher.  On many of these the foreclosure process has started.

 Just last week, January 7 to be exact, a federal judge dismissed the case in Baltimore.  The judge said that Wells’ harmful practices on mortgages which had been alleged could not be connected with the damages the city has suffered.  It could also not be shown that real estate taxes dropped as a result or that home vacancies rose.  Likewise it could not be established that an increase in criminal activity and the higher police and fire department costs stemmed directly from Wells Fargo’s actions.

 There are strong similarities between the suit filed by Memphis and Shelby County and the suit in Baltimore.  The suit in Illinois is slightly different.  It will be interesting to see whether a judge will reach the same conclusion or a decision will be made in Memphis and Shelby County’s favor.

 If Memphis and Shelby County win their suit and if the Attorney General wins the suit filed in Illinois, the door will open.  Wells Fargo will have no alternative but to agree to modify their loans on virtually all of their subprime loans not only those for African- Americans and Latinos.  This will happen nationwide not only in Illinois and Tennessee.

 If you are facing foreclosure and if your mortgage is with Wells Fargo, I suggest that you talk to a lawyer or an expert in foreclosures.  It would be best for you to be represented by a lawyer or an expert.  They can let you know what your options are.  They can also guide you in the steps to take to save your home.

 I also suggest that you learn as much about the foreclosure process and the options open to you.  There is a lot of information in my EBook.  You can find out more about it by clicking Stop Foreclosure.

 Much Success,

 Mark Elkins

On November 5, 2009 the gloves came off in the state of Ohio.  At stake is how much control can a state have over the way a mortgage company modifies loans for people facing foreclosure in that state. 

 Up until now mortgage companies have run their loan modification programs without any monitoring from state and federal offices.  In some instances the modifications they have offered have been on their terms.  They have given very little consideration to the people to whom these have been offered.  They have also paid little attention to the state or federal governments.

 On one side there is Ohio’s Attorney General.  He filed a suit against American Home Mortgage Servicing, Inc. (AHMSI).  The suit alleges that the company violated Ohio’s consumer protection laws.  His suit deals with how AHMSI is handling the cases of people whose loans they are servicing and who have requested loan modifications.  He asserts that the company violated the law by

•  Ignoring the requests of people facing foreclosure for loan modifications,
•  Having incompetent and inadequate customer service, 
• Failing to modify loans in a timely manner, and  
• Offering unfair and deceptive terms on loans that it did modify.

 The Attorney General’s office indicated that they had received complaints from 119 residents of Ohio facing foreclosure about the way AHMSI treated them when they asked for help to save their homes.

 In this suit the Attorney General seeks a permanent injunction against AHMSI continuing these practices.  He also asks penalties to be assessed.  He also requests that the court order the company to put in place processes designed to provide efficient, competent and adequate customer service for all of the Ohio residents whose loans its services.

 On the other side is American Home Mortgage Servicing Inc.  This is not a mortgage company.  It is a servicer.  It originally was the servicing arm of American Home Mortgage.  When that company went bankrupt in 2007, American Home Mortgage Servicing Inc. was sold to Wilber Ross & Co LLC.  The company services the loans kept by American Home Mortgage.  They also have become the second largest servicer of subprime loans in the United States.  They took over the servicing of the loans of Option One when that company went bankrupt.  They purchased the servicing rights on some subprime loans from Citi Residential.  In 2009 they started servicing some loans of the bankrupt Taylor, Bean and Whitaker that they purchased from Wells Fargo.

 At the same time the lawsuit was filed by the Attorney General in Ohio, AHMSI filed a counter suit against the Attorney General.  They asked the court to declare that the way they handle loan modifications and the service they offer to people seeking loan modifications are in line with the law in Ohio.  When they filed their suit, the company sent out a press release.  Here are some of their comments from that release:

•  They have a large staff in place and have high customer service standards.
•  Their customer service representatives work closely with people who contact them to resolve questions, concerns and complaints they have. 
• They have worked closely with people from Ohio who have contacted them about loan modifications. 
• Since joining the Making Home Affordable Loan Modification Program in July of 2009, they have sent letters to every Ohio resident behind on their loan payments and eligible for a potential modification under this program inviting them to apply for a modification. 
• Prior to joining the Making Home Affordable Modification Program they had developed their own loan modification program to assist those who were facing foreclosure. 
• Representatives of their company have participated in Outreach events held in Ohio at which they have met face to face with people whose loans they serviced and were facing foreclosure. 
• Since October of 2008 the company modified the loans of 2,200 people in Ohio under their own program.  There were an additional 173 people who currently have trial loan modifications under the Making Home Affordable Modification Program.

 In the press release they also commented on their nationwide effort to help people facing foreclosure save their homes.  They said that from October 1, 2008 to September 30, 2009 they have offered more than 67,000 loan modifications to people whose loans they service.  These were outside of the Making Home Affordable Modification Program.  This was greater than 15% of all of the loans they service.  On 79% of these, the monthly principal and interest payments were reduced by an average of 30.5%.  Since they joined the Making Home Affordable Modification Program on July 22, 2009 they have initiated more than 6,800 loan modifications under that program.

 Who is correct?  Is the Attorney General correct or has AHMSI acted in the best interests of the people in Ohio whose loans they service?  The courts will decide this.  However, there is other information available which shows how AHMSI is working with people who are facing foreclosure and want to save their homes.

The Obama Administration publishes a monthly Servicer report showing how each company is performing in the Making Home Affordable Modification Program.  The report through November of 2009 indicates that AHMSI’s loan modification activity has been very poor.  Trial loan modifications have commenced on only 6.3% of all of the loans AHMSI services which the Administration estimates are eligible for modification.  Thus far permanent modifications have only been offered on 201 loans.  That is 2.6% of their loans with trial modifications. 

 The report indicates that trial loan modifications have been offered on 23% of all of the loans for all mortgage companies in the program.  Permanent modifications have been offered on 31,382 loans.  That is 4.1% of all loans with trial modifications.  So AHMSI is right near the bottom.

 Here are the figures for AHMSI from the report through November of 2009:

•  120,787 – Estimated loans eligible for modifications 
•  12,621 – Trial Loan Modifications Offered 
•    7,642 – Active Trial Loan Modifications 
•       201 – Permanent Modifications

 As these numbers indicate, AHMSI has just barely scratched the surface on the loans they are servicing where people are facing foreclosure.  They report that they have modified more than 67,000 loans outside this program.  There is no way to know how accurate this figure is since an independent company has not verified it.  There also is no way to know how many loans that the company services which are outside the Making Home Affordable Modification Program are eligible for loan modifications.

 A search on Google indicates that there have been numerous complaints from people nationwide whose loans AHMIS services.  Many deal with the poor service they have received from the company when they asked for a loan modification.  In August of 2009 there was one post which suggested that the people who had problems with AHMSI ban together and file a class action law suit against the company.

 Much is at stake in these suits for the Ohio Attorney General, AHMSI and the people whose loans they service who are facing foreclosure.

The Attorney General has to protect the people of Ohio.  He has to make sure that those who are facing foreclosure and who desire to save their homes are not mistreated by the mortgage companies handling their loans.  If his suit is successful, then he will be able to go after other mortgage companies against whom complaints have been filed and get them to correct their ways.

 IF AHMSI is successful, they will avoid penalties.  They also will be able to process requests for loan modifications without governmental agencies looking over their shoulders and demanding that they handle these any differently than they are currently.  If they lose the suit not only will they have to pay a penalty assessed by the state of Ohio for their actions, the company will also open itself up to law suits filed in other states.  There is also the potential of a class action suit being filed against them.

 If the Attorney General wins the suit, people facing foreclosure whose loans are serviced by AHMSI will get better service from the company when they request a loan modification.  Their requests will be processed more timely.  Any modifications will be fairer for them.  If AHMSI wins the suit, then they will continue to be treated as they have been with little change being made by AHMSI.

 It is unclear who is right.  Are they allegations made against AHMSI by the Attorney General in Ohio correct?  Are the assertions made by AHMSI about the job they are doing on loan modifications correct?  If you are facing foreclosure and if your loan is being serviced by AHMSI, you should hire a lawyer skilled in foreclosure law to represent you.  You have too much to lose if you don’t.

 I would also recommend that regardless of who your mortgage company is, don’t try to get a loan modification on your own.  Hire a lawyer or an expert in loan modifications to represent you.  They can get a far better outcome for you. 

 You may also want to check out my EBook.  It will help you understand the foreclosure process and the steps you can take to save your home.   You can get more information on it by clicking Stop Foreclosure.

 Much Success,

Mark Elkins

Ever since the start of the Making Home Affordable Modification the mortgage companies have been slow in processing applications for loan modifications for people facing foreclosure.  Numerous times in past posts here on my blog I have commented on how poorly the companies have treated these people.

Up until now the mortgage companies have controlled the loan modification process and any other steps people undertook to try to save their homes from foreclosure.  The companies did what they wanted without regard to the people they were supposedly helping, nonprofit organizations, and city, county, state and federal governments.  In normal times they got away with this. 

Back in the Good Old Days

The number of foreclosures at any given time was low.  It was beneath everyone’s radar.  No one really paid attention to what was happening.  Back in those days, there were no real attempts to help people avoid foreclosure. 

If people were behind on their house payments, the mortgage companies just took the amount they were short, added interest and penalties to it and tacked it onto the balance owed.  They took the total and typically divided it by a certain number of months and added that amount to the monthly payment.  The person facing foreclosure was advised what the mortgage company had done.  They were also told that their new payment monthly would be that inflated amount.  When they paid the total off, their monthly payment would drop back to what it had been.

The people were responsible for making the larger payment.  The mortgage companies didn’t care where or how they came up with the money.  They just expected the people to get it.  If they couldn’t, the mortgage companies didn’t care.  They just went forward and foreclosed on the homes.

Those Really Weren’t Good Old Days, Were They?

I am sure you would concur with me that if the American public knew what was happening, they would have been outraged.  Yet because of our ignorance mortgage companies got away with it.

As the foreclosure crisis has grown and reached epidemic proportions, far more attention has been placed on the mortgage companies and how they handle foreclosures.  The initial programs introduced by the Federal Government requested the mortgage companies to do certain things voluntarily.  They never did and the programs failed.

The Making Home Affordable Modification Program

In March of this year, a new program was rolled out by the new administration.  The Making Home Affordable Modification Program was introduced.  On paper it is a great program.  It called for loan modifications where the monthly payment of a person facing foreclosure would be reduced to 30% of their gross income.  This would enable many more people to save their homes than were ever able to in the past.

There was only one major problem.  There were no penalties in it for mortgage companies if they did not follow through on modifying loans as specified in the program.  There were certain cash incentives built in; however, these were not large enough to make it advantageous for the mortgage companies to modify loans.

So the mortgage companies continued to do as they had been doing, not really modifying loans or attempting to do so and blaming it on the people who were facing foreclosure.  They said that the people who had financial challenges were not submitting the necessary information to them.  They were uncooperative.  

There Was One Big Difference

The problem was too big.  There were too many foreclosures.  There was too much attention focused on the mortgage companies.  Too many people were complaining about how uncooperative these companies were.  Reporters investigated and found that most complaints were legitimate.  The U S Treasury and the Department of Housing and Urban Development which oversaw the Making Home Affordable Modification Program had to do something.

The Monthly Servicer Reports

At the end of July executives from the mortgage companies were called to a meeting in Washington with high level officials from the U S Treasury and The Department of Housing and Urban Development.  At this meeting they were told that their performance had to improve.  They also were told that beginning in August the U S Treasury would start to release monthly reports on.  These reports would show what each mortgage company was doing with their loans in the Making Home Affordable Modification Program.

Each month since then reports have been released.  These have shown that the mortgage companies have really been doing a horrible job with loan modifications.  The mortgage companies have put their own spin on their poor performance.  Some have said that they are proceeding cautiously with modifications because they want most of the people to whom they give modifications to be able to save their homes.  Others continue to blame the people who have requested modifications for not submitting required information to them.

The Latest Problem

For the most part trial loan modifications started in July.  These trial modifications last three months.  If the people to whom these are given make their payments on time, they are supposed to be converted to permanent modifications.

No statistics have yet been released on how may trial modifications are being converted to permanent ones.  However in the last two weeks, information has been leaked that only 1% have been converted to permanent modifications.

Mortgage companies are again blaming the people for not submitting the necessary paperwork.  Housing Advocates and non-profit groups who represent people facing foreclosure are fed up with the companies.  They are clamoring for a change.  They want the administration to take more aggressive action to make sure that the companies modify loans for people as required.  The administration should run the program and make sure that people facing foreclosure should get the modifications that they need.

The Treasury’s Response

On Monday, November 30, officials from the Treasury Department took the nest step to prod mortgage companies to help people facing foreclosure.  They announced that they were going to monitor the mortgage companies more closely.  They threatened to penalize companies that don’t do enough to help people requesting modifications.

They added that they are going to issue report cards to mortgage companies and there will be consequences including financial penalties and sanctions for those which perform poorly.

The mortgage companies need to be brought under control.  They need to be working with everyone to help people facing foreclosure save their homes.  They cannot continue to work against them each step of the way.  Those companies that don’t change should have to pay large financial penalties.

Changes in the Making Home Affordable Modification Program are being made very slowly.  There is no indication of when this program will start to work as it was intended to.  Until that occurs, people facing foreclosure who apply for loan modifications will continue to experience the same challenges that people are experiencing right now.

If you are facing foreclosure, don’t expect that you will have it easy.  Expect to do battle each step of the way.  Don’t try to negotiate a loan modification by yourself.  Get a lawyer or an expert in loan modifications to help you.  Also find out as much as you can about the foreclosure process and steps you can take to save your home.  There is much information on this in my EBook.  Please check it out by clicking Stop Foreclosure.

Much Success,

Mark Elkins