Journalism in the Public Interest

For Gov’t Mortgage Mod Program, New Numbers Show Old Problems

Homeowners still have long, costly waits in the federal foreclosure-prevention program. And for many seeking mortgage modifications, the final answer is no.


TARP chief Herb Allison (Getty Images file photo)

Each month, the Treasury Department releases new information about how homeowners in its mortgage modification program are faring. And each month, the numbers get bleaker.

Take a look at our graphical rundown of the numbers, broken down by each bank or mortgage servicer participating in the program.

Here's a quick summary: About 1.3 million homeowners have received a trial modification, a temporary reduction in payments designed to make sure they can keep up with the lower monthly bill. It is supposed to last three or four months. For most, it has lasted longer than that, and for over a quarter of a million homeowners, it has lasted longer than six months.

About a million homeowners have received a final answer from their mortgage servicers. For nearly 60 percent of them, the answer was that they did not qualify for the program, even though most did not miss a trial payment. For those who remained current, the most common reasons for disqualifications were homeowners' not meeting the program's income requirements or not sending in the required documents, according to the Treasury. (Meanwhile, homeowners routinely complain that their documents are lost when they send them in to the servicer.)

Despite all those denials, there's still a large backlog of homeowners in limbo: About 118,000 have  been in a trial for more than six months. Back in May, Treasury officials said mortgage servicers had promised them this backlog would be cleared by the end of June. That didn't happen. On Friday, Herb Allison, the Treasury official in charge of the TARP, said servicers had made a new promise: They will reach decisions on those loans "over the next month or so."

This lack of accountability has been a recurring feature of the program. Several times, Treasury has threatened to penalize servicers for breaking the program's rules, but has never followed through. Recently, nearly 400 homeowners responded to a ProPublica questionnaire, and most said their servicers had broken the program's rules. Our profiles of five homeowners who've tried to get a modification through the program also show the errors and delays that have been common.

Allison put a positive spin on the fact that hundreds of thousands of homeowners have waited for several months for a final answer from their servicers. Homeowners in the trials have "benefited from lower payments ... for many months" and from "having time to obtain other solutions to their needs," he said. And that relief has come "at no cost to taxpayers." (Servicers in the program are paid incentives only for completed, permanent modifications, which accounts for the fact that very little of the $75 billion once earmarked for the program has actually been spent.)

Homeowners in the prolonged trials tend not to see the situation so blithely. Most will be ultimately denied a modification under the program, and some of those homeowners will be confronted by demands from their servicers that they immediately pay up their arrears or face foreclosure. In addition, homeowners in the trials have often seen their credit scores decline as a result of the trial.

Advocates also say that it would have been better for denied homeowners to have saved money for the possibility of foreclosure rather than have spent it on prolonged trial payments. As Diane Thompson, an attorney with the National Consumer Law Center, put it: "Being in a trial modification if you don't get a permanent modification is worse than having not been in a trial modification. Period."

Treasury Department officials have emphasized that nearly half of denied homeowners will nevertheless be offered modifications by their servicers. But those modifications are not required to meet the guidelines of the federal program and are thus not likely to reduce monthly payments as steeply. A report released by federal regulators earlier this year showed that 78 percent of modifications through the program reduced the homeowner's monthly payments by over 20 percent. By comparison, only 36 percent of modifications outside the program cut payments that much.

Just to reiterate how CHASE bank is operating, here’s my experience:

1. CHASE moved us to foreclosure rather than starting us on trial payments within 30 days

2. CHASE sent a package marked “FORECLOSURE” on the outside, to my former place of employment, Macys, although this was never an address used with CHASE, and CHASE knew that I had been laid off 10 months earlier, after a 32 year career with Macys.

3. CHASE failed to respond to my written complaints about their handling of our Loan Mod. request, and specifically to the fact that they sent a foreclosure package to my former employer.

4. CHASE sent yet another package to my former employer, marked “personal and confidential” in an UNSEALED envelope.

5. CHASE told us that we don’t qualify because ours is a 2-family house. (1-4 family homes DO qualify)

6. CHASE rejected us, in writing from the Federal program, for the stated reason that 31% of our income is not less than our housing expenses (In fact, it IS, by a HUGE margin)

8. CHASE put us on a CHASE trial rather than a Federal Loan Mod. Trial.

7. CHASE acknowledged verbally that we DO meet the 31% requirement, but stated we PROBABLY were disqualified because we have TOO MUCH equity in our home.

8. CHASE stated verbally that we will probably be denied a permanent CHASE modification because we have TOO MUCH equity in our home.

9. CHASE stated that their goal was NOT to keep us in our home.  Their goal was to “MITIGATE THEIR LOSSES”, and they would prefer to force us to sell our house and pay the full mortgage balance rather than offer a permanent modification.

10. Contrary to statements on the CHASE web site, they have not made a decision after 3 trial payments. We just sent in our 5th trial payment.

I think CHASE has acted in a despicable manner.

One of the CHASE web sites states:


    “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. CHASE?  Your actions tell a different story!


Here’s an idea.  Prove me wrong!  DO THE RIGHT THING!  Move us quickly to a permanent Federal Loan Modification.  Turn this around to a positive story, and I will certainly post the results here.  Then do the same for all those others suffering legitimate hardships, and I’ll bet they’ll post their stories as well!

I’m 110% sure someone at CHASE monitors this site.  So I’ll be waiting by my phone for a call from some CHASE big shot, apologizing, and making this right!









Chase Bank did an even worse thing to us. They gave us a trial modification in the HAMP program, then sent us two conflicting letters with the terms of the final. They mixed us up with someone else. Finally, we got final modification papers but we thought the primcipal amount was wrong. We signed and notarized the final agreement and sent it back with a separate letter reserving the right for a full accounting of our loan. We made several payments of the modified amount—not actually a very good deal—then without warning they went to court and tried to sell our house without notifiying us they had canceled our modification. Now we are in court in Illinois fighting for the contract that took over a year to get. They seem to be trying everything to steal houses and on the face of it pretend to be “helping.” And why not? They have to make money somehow. We will fight back in court because this is reprehensible. But a shame that the mortgage payment goes to the lawyers, not to pay down our note.

Chase has been wonderful, no issues here. We did what they asked and they got us modified right after our trial period.  Sounds like many mortgagors shouldn’t have gotten a mortgage to begin with if they can’t comply with simple instructions. They are giving a great program for those of us who really needed the help.

Max -  think you’re probably the ONLY person who’s had a positive experience with Chase.  Seriously.  We followed the instructions to the letter and have had to submit docs 11x (last count) because they were “misplaced” by Chase.  That’s only the beginning.

Good for you, though!


Good for You!! It’s good to hear that CHASE did things properly for one family. 

Why do you categorically assume all the other cases are borrower error? 

I assure you that I am 100% in compliance with every CHASE, and based on the similar stories of so many others, it’s clear that my saga is not unusual.

JS -

As a Math teacher of 19 years, I know there are exceptions to EVERY rule.  I just wish we were some of them!  LOL! 

Max -

I agree with JS - don’t be so quick to blame so many errors on the borrower.  The majority of us are quite well educated and are 100% capable of following instructions to the letter.  I’d almost be willing to be Chase is MAYBE beginning to wake up with all of the negative publicity and poltical pressure they seem to be receiving.  Just a guess, and a hopeful one at that.

Also, it’s ALL of the large banks making identical errors - there are thousands of stories out there that mirror each other.  BOA, Wells Fargo & Chase happen to be the largest of them and the errors are definitely identical. 

Once again, good for you, Max!  Say a prayer or 2 for the rest of us to be as fortunate as you’ve been!

SHAME on Nationstar! You ran me around in circles for six months, losing documents, bending rules and ultimately saying I was not qualified unless I missed three months of mortgage payments. Are you reading the same Fannie Mae rules that I am online? Obviously not.

Great photo of Herb Allison’s true nature, a smug boredom coupled with a dash of D.C. arrogance and some “I got mine” smirk.
Dreadful that this turkey gets to slop taxpayer funds around. Make a total mockery of the Obama “promise” to bring change to Washington, to operate with transparency and to put Main Street alongside Wall Street in terms of priorities.
Disgusted with this truly atrocious mendacity, prevarication that ranks a level or two below that of Watergate dopes. At least they did not shrug while the middle class swirled around the bowl of the Great Recession.
He should apologize and resign immediately. Like, today.

Maybe Max working for a monitoring department for Chase and when there is too many complaint on websites they have to write in something good. Just like BP. There was enough money left from the bailout to cover these jobs.

I have watched many hours of congressional oversight hearing. These bankers have no intention of helping homeowners. Have you all noticed even in this article:

homeowners not sending in the required documents,

Just how stupid these bankers think we are are?
Why wouldn’t someone who want to save their home refuse to send in Information?

after 18 months, one denial, and just completed a trial at $2600 which was fair.  they offered me $3500 for the first 5 years, then $3700 for the remaining term.  very NOT affordable in a house they valued at $530k and the loan principle of $701k.  will my house value increase $170k in the next 5 years?  likely not.  applaud the effort, sort of, but not gonna work….

More on Chase:
David Lowman, chief executive for JPMorgan Chase’s home mortgage division, was asked by Congressman Barney Frank during congressional hearings to identify who homeowners should contact to address and resolve their concerns. Lowman offered, “Come to me.” And “come” they did: Over 50 Chase borrowers in the audience came to him with their questions, but Lowman turned tail and ran from these homeowners, embarrassing members of Congress and fellow bank executives who also testified. Read more and see the video:

I truly feel for homeowners who have gone through the lies from Chase and the other Bail Out Banks. Unfortunately, the reality is that many homeowners do not qualify for reductions in payment and were falsely given hope from the bank representatives that in the end do not understand the bank guidelines nor do the have the authority to really help homeowners. Income is routinely counted from sources that will not be allowed by the underwriters that actually approved the Loan Mods.I honestly have a feeling this is done on purpose, the banks are in fact “COLLECTORS” and the want every penny you are willing to pay. In many circumstances, homeowners are in what I call, “Loan Mod Denial”, they know they will not be able to document their income but they are emotionally attached. In the end, short selling the home and eliminating the debt is the best financial option, period…

It makes no sense to give a final modification and then, without warning, yank it. Especially, since the payment was actually higher. We were paying Chase $3800 a month and if they take our house it will sit idle, taxes over 7000 a year. What’s the logic in this? I think Chase is a like a big machine with many moving parts and no real brain. Too big to fail? Too big to do the math or make a reasoned decision, it looks like. Why should consumers (who never asked to be Chase customers) pay because a bank is “too big”?

My research tells me that banks will strain on the side of “no mods” or “no admittance of foreclosure” because each and every loan mod or foreclosure or default etc is going to effect their quarterly reports to shareholders…...none of the major banks want this…so they will drag their feet behind the scenes, but up front they will make gross statements of major assistance to homeowners.

  I hate to say this,..But I DO NOT believe You !
  Ever heard of a ” Shill “,.....A shill is a person who is paid to help another person or organization to sell goods or services. The shill pretends to have no association with the seller/group and gives onlookers the impression that he or she is an enthusiastic customer.

michael blechman

Aug. 25, 2010, 6:32 p.m.

The bankers are money grubbing fake populists.
They claim to want to help but never have come close
to any provable action.  Put your money in locally owned banks.  A credit union account is more likely
to serve you honorably.  Service to stock holders makes banks such as Chase directly opposed to any
real help for clients.  Take your money out of the big
and failing the public banks.

Fellow homeowners that were caught in the financial tsunami of our lifetime….  I am one of you, and have given up hope on getting any meaningful help through Chase or the Obama administration.  And allot you know that except for maybe your family and friends, nobody really gives a damn.  And the public thinks we are just a bunch of dregs that can’t control their money.  Now I bought in an ‘up and coming’ area of Oakland, poured everything I had in to this property…. watched it all wash away like a hurricane had hit the bay area.  I am a general contractor and I have worked all my life, never took a dime, self-employed, payed all my taxes, hired guys, hired subs, bought hundreds of thousands of dollars of materials…..  But when my business went to zero, and the houses lost over 50% of their value, and the foreclosures came on strong.  We tried to stay above water, made the ‘temporary’ payments for nearly a year in the 3 month plan!  Well nobody cares, and you know it… we are not too big to fail… we already did.


I’m disinclined to believe you too, though I’m willing to say you might be a rare specimen—Chase can point to and say, “See!”

Chase has consistently bargained in bad faith, and the list of those commenting here is clear evidence of that—unrelated and unacquainted people telling the identical story, time and again.

• We hear the Treasury Dept. has threatened Chase with censure and penalties, but even that doesn’t happen. Why?
• We hear the promises—3 months becomes a year on loan mods and the people are then denied.
• We hear again and again the saga of lost documents. Shouldn’t an institution keeping track of billions of dollars be just a little more responsible?

I wanted to believe Chase had a stake in seeing people remain in their homes, but I’ve watched billions in bailouts go to executive bonuses. I’ve wanted to believe our government was really trying to help, only to watch it turn a blind eye to this contrived incompetence. I’ve wanted to believe there was a possibility of retaining my own home of more than 20 years, only to finally have to face the bitter reality that wouldn’t happen.

And when I put it all together, I look at a very basic tenant of Marxism—that property is not to be in private hands, but in the government’s hands.

For that, I weep for those who are losing the American dream, but mostly for my children and grandchildren who will never know the freedoms Americans have fought and died for.

Chase needs to be held accountable.  The length of this process is beyond stressful.  They continue to “need updated docs” but WHAT are they expecting to change?  NOTHING changes - not income, not monthly expenses, nothing.  Why they couldn’t just follow the rules in the first place is beyond me.

All I want to do is keep my children in our home and I’ve more than proven my committment to do so.  SO, my stupid question of the day is:  WHY DOES CHASE MAKE THIS SO IMPOSSIBLE???  I mean, really, WHAT else could they possibly need????


The ONLY way Chase is going to be held accountable is if some ballsy lawyer starts a class action suit against it and its peers in the home mortgage business.

Please Join me on keep asking CNN for a Special Show on Loan Mod Nightmares. If enogh people will write it could happen. CNN has a section where we can ask them to report. Here is my recent letter to CNN.

Families with children get foreclosed on while banks suppose to help them with the loan modification. The incompetency or unwillingness of banks has caused too many families with children to find themselves homeless and on the street. When Big Wall Street firms got bailed out our government has assured the people the bail out will help Main Street, and this is the only way to stabilize the economy. It has been almost 3 years since the first bail out by Bush. Nothing has been accomplished for homeowners, only big banks have benefited from the bail out. No job creation. No Credit for small businesses. We have more foreclosures then ever in US history. However at the same time CEO salaries and bonuses have been skyrocketing and these CEOS salaries are higher then ever in US history.  All this on the back of the American Taxpayers.

I have been watching CNN since Bobbie Battista reported the news, and it was in the 80s.
I believe a 2 week special every day 1hour show, with an open telephone line and e-mail would bring a light on this current corrupt crisis that many homeowners going through. It would enlighten our nation how this Home Affordable Modification is just a game for banks that has been created buy banks through our government. Reason: Too many foreclosures would literally paralyze our economy. This way banks will not take too many properties back right away, and at the same time banks able to collect some money from homeowners before eventually foreclosure take place.

First, Max is a shill.  Or a condescending s.o.b.

“...many mortgagors shouldn’t have gotten a mortgage to begin with if they can’t comply with simple instructions” 

What eluded Max is that most of us have complied, not once, but countless times, and still been asked for more docs and substantiation, intermingled with the original ones they claim they never got.  If Max had actually been through the anxiety and distress over the horrible possibility of losing his home, he would at the very least have empathy for others in that position.  He clearly has nothing but contempt.  ‘Nuff said.

Pastor Dave:  Why won’t anyone file a class action?  I’ve seen references on several complaint sites that indicate no lawyers will take the case.  However, I’ve received notices of class actions against AMEX and Wells Fargo before (not related to this problem however), and clearly their size and power didn’t stop those lawsuits.  It seems like this is a natural for a class action lawsuit.

Supplemental Directives bulletin:  I downloaded the Supplemental Directives (link in one of the docs on this site) which provides instructions to the servicers of types of documentation they might request.  In my case, Chase has asked for ALL of the items suggested as backup, where (in my interpretation) the list of items was merely a guideline to demonstrate various means to substantiate income. 

In my case they first wanted hubby’s annual SSI income statement that is used on our tax return.  We first provided the 2008 statement, then the 2009 when requested.  Last week they decided they also need the document originally sent when he first applied for social security, because it shows the frequency of payments.  Nevermind that we had just given them four months of bank statements, where the automatic SSI deposits are shown monthly.  I suppose next they will need an affidavit from the rep at the SSI office who took his application.  The absurdity is truly mind boggling!  What it shows me is that all these requests are just to buy them time while they collect our money.  Their bottom line appears to be the Net Present Value calculation, where they figure out which is most profitable for them - a foreclosure or a modification.  Helping us stay in our homes indeed.

I was somewhat surprised to see a clause that said borrowers signing up for a loan modification do not forfeit their right to legal action.  That’s good news, unless there is another hidden clause elsewhere reversing it which I missed!  (is possible…didn’t read all 38 pages)  :)

Good luck everyone.  I’m ready for anything at this point.

# 1 - To the person who wants us to write to CNN - please post the e-mail address.

# 2 - to all - identify the mortgagor.  All Chase victims do, but Chase is not the only one.

# 3 - to all the victims:
—-Contact the FTC - they will assign a case #.

—-Write to your State Attorney General; his/her portal has forms that you can print, and attachments are allowed.  Be sure to put the FTC case number in the complaint.  With enough complaints, his/her office will do something: either penalize servicers, or fashion some other kind of punitive action.

—-cc to:
*Corporate Offices of your servicer

*Comptroller of the Currency (call 800-613-6743 to obtain their web-page for your state)

*Your state’s Department of Savings and Mortgage Lending

*And last, copy the FTC quoting the original case number.

Be professional and do not let your emotions be apparent.

It is OK to vent your frustration here, but the only way that agencies will take action is when they can no longer ignore the issue. Let’s flood them.

It may be good to let know that you did (mention your state) so that they can keep track.  The have the tools to do so.

My story extends to 17 months of everything everyone is talking about.  No additional debt.  Started with a credit score higher than 820.  Wells Fargo approved me for the 3-month trial, then a few days before the permanent mod was to take effect, I was notified of a rejection over a fact known to them for more than half of the 17 months and was never a problem before.  Wells ordered six credit reports without my knowledge or authorization and my score is down to 791. It goes on and on.  But taking action is what is needed. 

Please do.

My mistake.  I am the mortgagor, Wells is the mortgagee.

Lucy Alva and everybody who is willing to write to CNN. here is the web address Just copy and paste
it to your web browser.

This article is part of an ongoing investigation:
Foreclosure Crisis

Foreclosure Crisis: Banks and Government Fail Homeowners

Banks and the government have fallen short in helping homeowners in danger of foreclosure.

The Story So Far

Systemic failures at the country’s banks and mortgage servicers have exacerbated the most severe foreclosure crisis since the Great Depression, and government efforts to limit the damage have fallen short. ProPublica created an unrivaled database of homeowners who have faced foreclosure, opened a Facebook page to encourage homeowners to share their stories, wrote profiles of some of them, and incorporated their experiences into our reporting. We also provided a comprehensive rundown of the numbers behind the crisis.

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