We will see if Treasury or any other agency acutally takes a proactive step to curbing these abuses on the middle and lower classes.

The mingling of the words laws and rules is confusing.

My takeaway is the New York legislature passed laws similar to Treasury program rules which were never enforced…

I feel sympathy for borrowers but also for people who did the right thing by not buying and would like a chance to buy at a reasonable price.

I feel like it’s a double edged sword. Some people who should have known better bought risky investments, i.e. adjustable rate morgages, and some people were taking advantage by predatory lending practices. We can’t have rules set up to let banks and lenders get away with crimes against investors but we must have rules to protect the less informed and less savvy.

The modification programs were ill conceived in the first place and the Obama administration has proven it can’t implement programs well at all. We should have either left the banks alone or made damn sure the rules were rules and not guidelines.

I’m sure that this NY law, while well intentioned, will simply cause the mortgage companies to drop out of the modification business altogether. They don’t have to modify anything, program participation is voluntary. I don’t think there is a single law or regulation on the books that requires them to do this. It was a “pay for play” incentive program using tax dollars to reward them for making adjustments to existing loans. So far, it has failed miserably.

Expect a sharp increase in borrowing costs if the law is changed so that everyone is entitled to modify their loan anytime there is a recession or a significant drop in property values. Every mortgage was a contract with specific requirements and remedies for the parties. Barring fraud from either party, those contracts are just as valid today as the day they were signed. If there was fraud, the guilty party should pay the maximum penalty, period.

Any other interpretation is a social engineering response to what is basically a pure business deal.  I’m not unsympathetic, this is affecting me, too. But, it’s business, not a matter of “class”.

Jon,

We can’t turn back to clock on the TARP funds that were given to banks to ‘rescue them’. If you came to me and said, I’ll give you 25 million to help you get your house in order and you have to pay it back as soon as you can, I could take care of my special needs child, deal with my own health issues and probably come out pretty financially set in 2 years also.
I agree that we should have let the banks fail and maybe I would have lost my house anyway but at least that way the banks would not have used a tax-funded lifeline and told the public to F-off as they essentially have. The problem here is the ‘business deals’ , as you put it, are people’s homes and lives. If you take all the property to complete the retaking of lots of financial ‘wealth’ and you make sure it is going back to all the financial institutions and traders, at least let the banks deal with the TRUE cost of that. At least have the ‘investors’ in a portfolio have to take the true hit when 40 properties in a group of 100 are foreclosed and the other 60 drop between 20-40 in value.

This is so over due and unbelievable that after all the bailouts the banks received they still drag their feet and the federal govt is so weak to do anything to seriously bring the banks to the table <a >Santa Maria Real Estate</a>

@ Erich - a significant issue here is property tax collection, for most localities the fiscal underpinning of everyday life. The taxes pay for schools, police and fire, libraries, local health and social service agencies and maintenance (such as road crews and salt trucks.)
Keeping the original family in place at a slightly lower payment has a much, much less disastrous effect on these taxes. The neighborhood, suffers less blight and less price depreciation than a string of foreclosures brings.
While some buyers may be buying up deals (esp. speculators) many people would prefer to their neighborhood not hollowed out and devalued.
Those devalued locales yield a lower property tax haul, and the rampant teacher layoffs, library closings etc. that you see in the news reflect this.
Penalizing and deriding people who happened to relocate in the boom, and paid accordingly, is no solution. Actually, many boom buyers have carried a disproportionate burden of prop. taxes vs. neighbors who bought earlier and had prop taxes set then (esp. in areas where the annual tax increase is limited regardless of prevailing sale prices.)
Those pre-boom buyers have been doubly enriched, with prop. taxes set much lower than their new neighbors, and the perk of accelerated property value appreciation. Even with the downturn, I have neighbors who are still up 40-45% vs. 2003, and have a tax bill about half of mine.
BTW, Prof. Elizabeth Warren of Harvard and others have shown with evidence-based research that medical bills, job loss and family disruption are the leading causes of economic malaise for families now, not careless spending.
Every foreclosure is a small tragedy, and with six million expected in 2009 + 2010 (combined) it is worth asking how we can stop them.
Peace.

Jon, I do not agree with the ‘all or nothing’ thinking on this issue. (”. . .everyone entitled to modify their loan anytime there is a recession. . .”) We are experiencing very unusual times which require unusual uncommon response.

Yes, every mortgage does have specific requirements & remedies in their contract. One of the remedies required by law regardless of whether stated in a contract is that the banks deal with people in good faith.  This is the law in every state in the union. No exceptions. Just because the banks are ‘voluntarily’ participating in the Loan Modification program does not relieve them of this lawful obligation to deal with people in good faith.

Having to wait months and, in my case, a year and a half to finally get a response of some sort from the bank is simply NOT a show of good faith on the part of the bank that required me to literally spend down every last penny of savings, which took a solid year,  before I went into default. To lead me on by telling me they would have an answer within 30 to 60 days & for me to keep paying the full mortgage is simply NOT good faith on the part of the bank.

I’ve had this home for 18 years. I came down with cancer & experienced side effects that made it impossible to keep my particular job. If I was an irresponsible person I would never have been able to keep this home this long & I would never have tried to work something out with the bank. I would never have trusted the bank’s repeated statements that I would have an answer within 30-60 days. Every time they wanted another document, or wanted an updated version of a document, a new 30-60 day time frame began to run. There is no way that dealing with long standing customers in this manner can be considered “basically a pure business deal” conducted in “good faith.”

I’m glad someone is doing SOMETHING.  Chase doesn’t return calls, doesn’t respond to letters doesn’t respond to complaints filed with the OCC, US Treasury, FHA or anyone else.  I have been trying to get answers for over a year now.

Since Fannie Mae and Freddie Mac are asking for more government, tax payer funds, at the very least these rules should apply to them.  When we (housing counselors) escalate to Fannie and Freddie, they are not modifying.  Instead these government, tax payer entities are refusing to use the MHA program to the fullest.  Use funds for Fannie and Freddie to modify loans.  Give the money to the taxpayers directly instead of continuing to fund these giant, incompetent organizations.

Bankers have finally come to terms with the fact that if they want to remain bankers they have to clean-up their mess. They cannot choke off economic growth with unacceptable levels of home auctions, and REO inventories, and expect to have an economy where they can survive.  Pure economics is forcing banks to make as many of these loans perform as they can.  They have no interest in seeing million of loans not perform. Modified performing loans coupled with orderly short sells and deeds-in lieu of foreclosure iare the only courses of action left for banks. They have gotten smarter as the choices have become more obvious.  When we have our next bubble in real estate prices let us hope that the lender’s drawer full of real estate deals will have less dogs with less fleas. The next recession should be much more orderly rather than the current absurd deleveraging from the bank’s bubble blowing lending.  Now our economy is left with too much unemployment that begats more foreclosures in a never ending downward spiral triggered by the gravitational pull of deleveraging. We aided and abetted the banks by borrowering what they were silly enough to lend us. We paid for our economic growth with our second liens, refis, and credit card consolidations. Now we all have to row in the same deleveraging boat if we are ever going to get to safe economic shores.

Dwayne,

The only issue with what you stated is that we are NOT in the same boat. The banks were given BILLIONS in taxpayer money to assure they were liquid. Homeowners have received scant help.
The funds should have been given to the borrower with it being tied to their particular loan with terms and conditions which made the note holder rewrite the loan within the same guidelines and the borrow holding the cards as to control of the money. That way, if a lender did not want ‘follow the rules’ at least the borrow had some leverage. Then we might be closer to being ’ in the same boat’.

Many borrowers are experiencing difficulties such as those that Kate faces.  They did not have a sub-prime mortgage, but have a long-standing fixed rate loan and have lived in their house for a number of years, never missing payments and always being timely.
Those applying for Obama’s loan modification under similar circumstances (many doing so before ever becoming delinquent), are being targeted for foreclosure by unscrupulous lenders.  There is no fear of breaking the laws for these lenders because there is no fear of enforcement. 
I applied after becoming disabled due to injury which also resulted in losing my job.  My husband was laid-off.  We applied for HAMP and within months, the lender more than doubled our regular mortgage payment, hit us with unwarranted fees and charges and pushed us toward foreclosure, not because we were late or had missed any payments but BECAUSE THEY COULD.  They want our equity and could care less about modifying our loan.
So, stop and think how this may affect you.  Don’t for a minute think that this can’t happen to you someday…eventually you may not even need a loan modification application for it to happen.  When lenders can routinely ignore contractual agreements and get away with it, few are safe from these tactics.
I support Elizabeth Warren and thank her for her efforts.

I believe it is time to organize, protest, and put pressure on politicians. Wall Street has been bailed out. Wall Street has done nothing to help Main Street. When people make 80-100 million dollar a year they have no concern of the little people.(Maybe that is why these people should be in a 90%taxbracket)Could you be happy with $8million/year after taxes?  Well these people just never can have enough.
To them we are in a different class. In there eyes we have to be exploited as long as they can get our last penny. This is why we hear when many people making the modified payments while banks are foreclosing on their homes anyway.
The Banks have no intention of helping struggling homeowners. If the Banks would want to help they could because the money is there : the government already gave it to them. But they paid themselfes big Bonuses.
while leaving the homeowners in limbo.
As long as our government won’t see angry homeowners protesting on the street this government will do nothing to help save our homes
I am not talking about 50 people at a time I am talking hundreds of thousands cross country.
So people if you want to save your home it is time to get organized and make your voice heard. It is time for our government to make Home Loan Modification Mandatory by these banks.

This would be a good time for ProPublica or some other organization to explain to readers that the FED, Fannie Mae and Freddie Mac are NOT public taxpayer-supported government entities. They are government sponsored private entities with the goal of making a profit for their stockholders. Researching their relationship with the government may have some merit as it appears to shift over time. Fannie Mae on wikipedia:

http://en.wikipedia.org/wiki/Fannie_Mae

Fannie Mae, was set up as a stockholder-owned corporation chartered by Congress in 1968 as a government-sponsored enterprise…The corporation’s purpose is to expand the secondary mortgage market by securitizing mortgages in the form of mortgage-backed securities, allowing lenders to reinvest their assets into more lending and in effect increasing the number of lenders in the mortgage market by reducing the reliance on thrifts.

Thank God, for doing the right thing!! I have been waiting for an answer for my loan modification since October 2009!! I have submitted 2x financial documentations and still have heard nothing back. In July, I was denied HARP, reason - I qualify for programs that preceeded HARP???? ..WTF, I quickly informed BOA, that I did not apply to those programs and wanted to more detailed written reason why I was being denied…I am awaiting their answer.

I am so glad that there is an official government agency holding the banks accountable if they do not comply with the federal law

One of the biggest problems in the modifications is making the proper entity come forth. They are not making the bank prove ownership of the loan and just making up new notes. How is that continuing?  Its FRAUD. There will be endless property title issues if they dont stop just letting anybody modify your loan!

Yeah…people should have known better…that they were going to get hosed and the government would help the banks, (PREDATORS), and not the people, (VICTIMS). Too bad we don’t have lobbyists. We only have “representatives”...LOL!

Mari… your kidding right… so why are they draining the taxpayer to stay afloat? Do you enjoy the fact that their foreclose mill’s are using your money to kick American people out on the street with falsified documents? Take a look at what is happening in Florida with the state AG filing claims on 3 law firms hired by Fannie Mae. You should enjoy reading about one of the firms DJSP that went “public” with an SEC filing… based on the racket Fannie Mae has set up for them.

Wake up America you will be next

Does anyone know if this applies to financial service companies like GMAC—My friends in California were trying to modify a loan with GMAC for over 2 years—repeated applications, constantly lost paperwork, changing payments, and this week there house was sold without them being told (They were notified a year ago that the house had been foreclosed and subject to sale) which they stopped and continued to try and get a permament mod or refinance-told by GMAC servicer on the phone that mos was almost done and not to make next payment or wind up locked in at a higher rate-until approved or denied. Bam! there house was sold last week and they still have not been notified! A week later they received notice their mod was not approved because a document was not properly signed- but GMAC would still work with them. Local rep said GMAC not under control of banking? Is that true?

Jon,

HAMP program participation *was* voluntary at the outset, in the sense that banks did not have to contract with Treasury to participate.  But they all entered these contracts, and a contract, once entered into, is not voluntary.  All major banks and servicers now have contractual obligations to implement this program. 

Nor are the participation contracts with the government “pay for play”.  Banks agreed to implement the mod program with respect to all qualifying mortgages in their servicing portfolios.  They have been reaping the benefits of loss sharing, incentive payments, albeit in very selective fashion, on the modifications they have performed. 

While banks have been out of compliance with these contracts, so far Treasury has not clawed back payments from the banks because the banks have been singing the tune that they are trying to implement the program.  But if banks decided to unilaterally breached these agreements by ceasing implementation altogether, the damages on such breaches would be very high.

First the problem was the wrong entities were ‘modifying’ mortgages. They did not even have the authority to make the modification cause they didn’t even know where the lender was. Now in Florida they say they are goibng to force the ‘real’ lender to come forth to deal with the homeowner. Good luck with that.

The program may have been voluntary in the beginning, but I also understand that any bank that took bailout funds had to participate. BOA took bailout funds, and are saying they paid it back, so are now implying that their participation is in a voluntary status..BS, so what if they paid it back..they still took the funds and now should in good faith do something good for the tax payers that made the bailout funds possible!

The bottom line is they are all crooks.
They are ALL filing fraudulent docs to support their foreclosure claims. Up until now its been smooth sailing and they have gotton away with bloody murder and nobody blinked an eye. Like a bunch of programed robots.. If the attorney General is for real the party is over. all its gonna take is the right people to take a good look and uphold the law! BOA should be put out of business. Their the ring leaders. All we are really asking for is for the courts to follow the law! Is that to much to ask?

We are not disputing legitimate foreclosures. If its legal do it! Fraud is never acceptable. If you have to make up documents and fabricatate assignments, and back date signatures, ect…. come on! what a circus.

I work for a small firm, established to assist homeowners in a hardship with mortgage modifications. We actually have a 100% success rate b/c we can find out early if we are able to work with you and your bank.  If anyone needs assistance with a modification please call Ariella at Tidewater Financial Solutions for more information. 910-509-7172. Thanks.

I sued BAC/BOA and Wilshire over the violations of HAMP.  They have filed a Motion to Dismiss those claims saying that I don’t have “standing” or I am not the “real party in interest” and cannot bring suit against them—only the gov. can.  I am opposing these motions claiming I am the “third party beneficiary” of such laws.  I am a former trial att of some 30 plus years who has extensive litigation exp against the likes of GM, Sprint and other major corps so I can go the whole way but this is absurd.  If the person screwed over by the breaches of the HAMP can’t sue what’s the point.

I sued BAC/BOA and Wilshire over the violations of HAMP.  They have filed a Motion to Dismiss those claims saying that I don’t have “standing” or I am not the “real party in interest” and cannot bring suit against them—only the gov. can.  I am opposing these motions claiming I am the “third party beneficiary” of such laws.  I am a former trial att of some 30 plus years who has extensive litigation exp against the likes of GM, Sprint and other major corps so I can go the whole way but this is absurd.  If the person is denied a hamp by the breaches of the HAMP they should be able to sue.

On October1, 2010..the federal HAMP regulations which will now become NYS laws will go into effect. Let’s see if it will make a difference!

I applaud Guen Caranchini for sueing BOA, I believe that the NYS Attorney General office is suing BOA for some other violation as well!!!

NOW IF THESE LAWS ARE VIOLATED, THEN WE NEED TO START A CLASS ACTION SUIT AGAINST THE BANKING INDUSTRY AND THE GOVERNMENT SHOULD PROHIBIT ANY FORECLOSURE PROCEDURE AGAINST ANYBODY TAKING PART IN THE SUIT UNTIL THERE IS A RULING!! THE BANKS MUST DEAL WITH US, THE CONSUMER, IN GOOD FAITH!! THE UNETHICAL WHEELING AND DEALING STOPS NOW!!

A CHASE BANK Loan Modification Saga:

1. I was laid off in May 2009, right after my 55th birthday, ending a 32 year career at Macy’s.

2. I paid my mortgage for as long as I could, while applying for a Loan Modification with CHASE.

3. CHASE bank moved us to foreclosure rather than process our paperwork within the stated 30 day period.

4. CHASE has made it almost impossible to complete the process.  They have employed the following tactics:

They made it EXTREMELY difficult to communicate with them

They asked over and over, and OVER for the same paperwork, including those that don’t require updates

They told me that we don’t qualify for the Federal Loan Modification program because ours is a 2-familiy house (which of course, is a lie!)

They sent a package marked “FORECLOSURE” all over the outside, to me, at my former place of employment, Macy’s, even though this was never a contact address on file with CHASE Bank, and I hadn’t worked there for 10 months!

After I complained in writing, about the FORECLOSURE package sent to Macys, CHASE sent yet ANOTHER package, marked “personal and confidential” in an OPEN, UNSEALED, envelope!

They sent us a written rejection from the Federal Loan Mod. program, stating that we didn’t meet the 31% income/housing cost requirement (which is a lie)

They failed to answer how they came up with that assessment when the NPV input values show that we DO meet the 31% requirement by a HUGE margin.

They failed to send a corrected rejection letter from the Federal Loan Modification program, even though they acknowledge that the stated reason for reject was incorrect.

They put us on a CHASE (not Federal) Trial Modification.

They told us that we probably didn’t qualify for the Federal program because we have TOO MUCH EQUITY in our home, but again, refused to put that in writing.

They told us that they are NOT TRYING TO KEEP US IN OUR HOME. They ARE trying to mitigate their losses, and that CHASE BANK WOULD PREFER THAT WE SELL OUR HOME and pay off our mortgage!

They told us that CHASE will most likely reject us for a permanent CHASE modification because we have TOO MUCH equity on our home.

They failed to answer our repeated, written requests for an explanation of all the items listed above.

They failed to complete our modification after 3 trial payments, as specified and as indicated on the CHASE web site. (I’m making our 5th trial payment today.)

Isn’t it ironic, that a refinance at current rates would make it easy for us to keep our home, but we could never qualify, since I am unemployed, and CHASE bank seems determined to make sure we never get a permanent loan modification.

CHASE advertises “CHASE. THE WAY FORWARD”. 

One of the CHASE web sites states:

“THE WAY FORWARD”

“At JPMorgan Chase (NYSE: JPM), we do our best to manage and operate our company with a consistent set of business principles and core values. First and foremost, this means always trying to do the right thing. “

REALLY?  Their actions tell a different story!

Just as in the ILLEGAL immigrant fiasco, the Feds are not enforcing immigration law.  Its being done by the states instead and then the Feds interfere with enforcing it.  Isn’t that backward.  Backward is forward in this new world though.

But now this is the same thing, the Feds are not seeing to this fiasco, the states are and kudos to those who do but isn’t that amazing.  The feds are the ones who set up this whole bailout thing and now they aren’t following up.

Nothing is as it ought to be.  Whatever is done is exactly the opposite of what logic would dictate.