Journalism in the Public Interest

Loan Mod Program Left Homeowners’ Fate in Hands of Dysfunctional Industry

The Obama administration’s flagship foreclosure prevention program has gambled on the willingness and ability of a troubled industry to help homeowners.

Alexis Burris, in her former San Diego home, with materials she accumulated during her year-long quest for a loan mod. (Paul Kiel and Olga Pierce, ProPublica)

February 18, 2011: This story has been corrected.

Last February, with 6 million homeowners in danger of losing their homes, the mortgage industry was assembled at a luxury hotel in San Diego applauding themselves—literally.

“As a group, we owe ourselves a round of applause,” said Yvette Gilmore, vice president of loss mitigation at Freddie Mac, citing the industry’s efforts to avoid foreclosures, garnering loud clapping from the ballroom full of bank executives, lawyers and others in the industry.

That same weekend, nearby homeowner Alexis Burris was agonizing over the impending loss of her home. She had spent a year seeking help from the mortgage servicing company that handled her loan—and that had the power to decide whether to save her house or foreclose on it—but had found the servicer to be anything but helpful.

There were delays, numerous errors and the servicer “continually lost everything,” Burris said. “There were some papers I had to send them 11 times.”

Millions of others homeowners have been caught in the dysfunctional machinery of the loan servicing industry. 

Yet the Obama administration bet the success of its foreclosure prevention program on the ability and willingness of that same troubled industry to help homeowners -- and lost. The program, overseen by the Treasury Department, has been characterized largely by lax enforcement and deference to banks. Instead, the program assumes that in return for modest incentives, servicers will develop the capacity to fairly and efficiently help homeowners modify their mortgages. But the industry hasn’t made the changes, which would involve a hit to their bottom line.

And though the inadequacy of the government’s incentives has become increasingly clear over time, the Treasury has not acted to change them. The program’s payments to servicers continue to fall far short of what would be needed to overhaul the servicers’ approach to homeowners, said Steven Horne of Wingspan Advisors, a company that specializes in handling troubled loans. Banks would have “to rewrite the business model, and it’s not worth it.”

On Thursday morning, federal regulators at the FDIC, Federal Reserve and Office of the Comptroller of the Currency said they found “critical deficiencies” in the way servicers do business and are considering sanctioning the industry’s largest players—who are also the nation’s largest banks. The flurry of tough talk comes after years of inaction by the Treasury Department.

Fixing the industry will require “difficult changes and significant investments to rectify broken systems,” said Federal Reserve Governor Sarah Bloom Raskin in a speech last week. “I have seen little to no evidence of improvement in the operational performance of servicers since the onset of the crisis.”

Over the past year, ProPublica has been exploring why the government’s program has helped so few homeowners. So far, we have detailed the Treasury department’s weak oversight, and how the administration quietly retreated from a plan to get tough on banks. In part 3, we will discuss reforms that could lead to more help for homeowners.

The stories are based on newly disclosed data, lobbying disclosures, dozens of interviews with insiders, members of Congress, and others. Today we tell the inside story of what happened when the fate of struggling homeowners was placed in the hands of the industry with little incentive to help: the mortgage servicing industry.

On paper, the government’s Home Affordable Modification Program, or HAMP, was supposed to address one of the main roadblocks to modifying loans: The banks handling most mortgages often have little incentive to avoid a home going into foreclosure since they don’t actually lose money when that happens.

That’s because mortgage servicers, the largest of which are the nation’s largest banks, don’t own the vast majority of the loans they handle. So, they don’t bear the loss if the loan goes to foreclosure. In fact, servicers often make money from foreclosure fees.

“Foreclosure is the path of least resistance inside a servicing shop, because once it goes into that mode, all of the costs are essentially borne by third parties,” said Horne.

But when it comes to making modifications, servicers have to make big investments in staff and infrastructure to work effectively with homeowners. HAMP sought to defray some of those costs by paying servicers $1,000 per modification and up to $3,000 more over time if it was successful.

Before the foreclosure crisis, mortgage servicing was a highly profitable business for large banks. They were paid a flat percentage that more than covered the cost of cashing checks from homeowners. Servicing a typical loan cost the servicer about $48 a year, according to a new Federal Housing Finance Agency analysis, while for a typical $250,000 mortgage, the servicer’s annual fee would be about $625 a year. Given the huge number of mortgages they handled, servicers made tens of billions of dollars in the years leading up to the crisis.

Ideally, “in good times, servicers are using some of the residual income to build out systems and procedures to handle the pressures that come with worse times,” said Fed Governor Raskin. “Unfortunately, as we have seen, this has not happened.”

Instead of investing in technology upgrades or employee training, banks pocketed the profits.

When the default rate tripled, servicers floundered, and almost as soon as HAMP launched it became apparent they weren’t up to the job.

Documents obtained by ProPublica via a Freedom of Information Act request show homeowners started calling a Treasury-sponsored hotline with complaints of servicer errors within weeks of HAMP’s rollout. Servicers, who still relied on fax machines, were losing customer documents over and over. Others said servicers were charging them for modifications.

"There were definitely times where I'd check and see if someone faxed in documents and [their file] says they were declined because they didn't comply, but I was looking at their documents," said a Bank of America call-center employee, who didn’t want to be identified for fear of losing his job.

More than 344,000 homeowners have been rejected from the program because the servicer said their documents were missing, the most common reason for denial.

“I think we’ve made massive improvements in our ability to capture, retain, and index documents appropriately,” said Rebecca Mairone, a default servicing executive with Bank of America. “I mean, for our industry, and certainly for Bank of America, this was a new process for us.”

Many problems have stemmed from the servicers forgoing upgrades on their decades-old payment processing technology.

Servicers were “mostly using a kind of mainframe-based technology that was basically initially developed to be glorified accounting technology,” Austin Kilgore, editor of Mortgage Technology magazine, said.

Better technology has existed all along, experts say. “The tech is out there—it’s difficult for a servicer to make enormous investments in technology, given the time frames, the compression and the volumes,” said Greg Hebner of MOS Group, a company that performs loan modifications for servicers.

The main industry solution to the problem of lost documents has been the HOPE LoanPort, a system that allows housing counselors to submit homeowner documents via a website. But even though the portal relies on off-the-shelf software, HOPE Now, a servicer-dominated alliance with counseling organizations and community groups, did not launch the system until November of 2009—about seven months after HAMP began.

Nine months later, only 1,400 full modification applications had been submitted through the system, said HOPE Now’s president Larry Gilmore. He said the volume would increase as more servicers and counseling organizations sign on. HOPE Now did not respond to requests for more recent numbers.

HAMP Did Little to Increase the Number of Mods

Non-HAMP Mods


Though HAMP was designed to make it easier for homeowners to get modifications, most who applied when the program was launched in April of 2009 waited months for an answer. The result was a steep decrease in overall modifications. As that backlog was addressed, modifications temporarily increased, but then returned to their pre-HAMP levels. Just before HAMP launched, there were about 125,000 loans mods per month. Since the program launched, there have been about 125,000 mods monthly, including HAMP mods.

The major servicers hired tens of thousands of employees to help handle the flood of phone calls, but the same cost-cutting approach kept pay low. Experience wasn’t necessary.

"At this point, we just need people in the seats, even if they're not qualified," Robert Northway, a consultant from McLagan, told an audience of servicing industry professionals in February of last year.

Staffing up to process modifications “just demolishes the bottom line,” says Duke Olrich, president of DRI Management Systems, a company that makes software for banks and other servicers. “The whole name of the game is to keep employee costs to a minimum if you can.”


Olrich says his company crafts its software so that even someone with no mortgage experience, “who might have been flipping hamburgers two weeks ago,” can speak with a homeowner about a modification. When a homeowner qualifies for a payment plan, the software puts it in green.

Robbie Abalos was 20 years old when he worked in a CitiMortgage call center in Tucson, Ariz., last year, at $10.50 per hour, a typical wage for the job. He had no mortgage experience and says the training was “just kind of a joke.” Abalos was advised not to “bend over backward” for callers, he says, because it cut down on the volume of calls he could handle.


A Citi spokesman said, “We believe our loss mitigation training is quite substantial, including dedicated training for new hires and specialized materials designed to encourage a strong customer focus."


It was common industry practice to tie employees' pay to keeping calls short. Among the four largest servicers, calls with homeowners average around eight minutes, according to data the companies submitted to Congress last year.


Many employees tasked with working with homeowners were moved from collections departments, and multiple current and former servicing employees said the emphasis was still on collections.

“Your manager is telling you, ‘Collect, collect, collect,’ ” said Debra Foley, who also had no experience when she was hired by Countrywide near the end of 2008. “Most people want to stay in their house. So why aren’t they”—meaning banks—“helping?”

Mairone said Bank of America, which acquired Countrywide in 2008, has since “created more of a distinction between what a collector does and then what a modification associate will do to help the customer.”

Retaining experienced employees has also been a problem for servicers. Most of the large servicers reported to Congress last year that their call centers had annual turnover rates around 25 percent.

Industry representatives say they are doing the best they can, given the enormous numbers of homeowners lining up. “The amount of effort being expended on this is tremendous,” said Vicki Vidal, a lobbyist for the Mortgage Bankers Association.

While an unnecessary foreclosure doesn’t hurt the servicer, it does hurt investors who ultimately own the mortgages and who lose money when homes are sold for a fraction of the mortgage amount.

“We do a lot of business for investors where they just want us to get the borrower on the phone and figure out what the heck’s going on,” said Hebner, the loan modification contractor. “We call the borrower, and the borrower says, ‘I’ve been trying to call servicer ABC for the last 60 days, I couldn’t get through.’ ”

Mortgage-backed securities investors risk unnecessary losses in the “hundreds and hundreds of billions of dollars” as a result of servicers’ cost-cutting practices, said Hebner.

The Roots of the Government’s Inadequate Incentives

Though HAMP relies heavily on incentives to get servicers to change, ProPublica has found a series of faulty assumptions built into the program’s design.

During interviews with numerous experts, government officials and industry representatives involved in the program’s design, no one could point to research that provided a basis for the servicer incentive structure. Instead, the number appears to have emerged from back-of-the-napkin calculations at a series of agency meetings.

“It was just a guess that $1,000 might be enough,” said Karen Dynan, a former senior economist at the Federal Reserve.

When designing the program, decisionmakers wanted to ensure servicers were only paid for successful modifications because tax dollars were at stake. But it still costs servicers money to evaluate the more than 1 million homeowners who didn’t ultimately receive a government modification. They get no incentive payments to offset that cost.

Treasury also overestimated the percentage of homeowners who would move from trial modifications, for which the servicer is not reimbursed, to permanent modifications. In October of 2009, Herb Allison, then head of TARP, estimated that a “bare minimum” conversion rate should be 50 percent, and a successful rate would be 75 percent. So far, less than 40 percent of homeowners who’ve started trials have gotten a permanent modification.

Under Treasury’s original assumptions, servicers could have received upwards of $10 billion in government funds. As it’s turned out, they’ve received $419 million two years into the program. Bank of America subsidiaries have received about $50 million of that, but told Congress in 2010 it would spend an estimated $350 million that year on HAMP-related expenses.

As the program struggled, the administration didn’t move to increase the incentives. That would have been difficult politically. “There was a sense that you could raise that payment, but it was coming at a pretty clear cost to the taxpayer, and it wasn’t clear that it would make a big difference in the number of mods being done,” said Dynan, the former Fed economist.

Treasury and servicers insist that the industry has changed as a result of HAMP, claiming that customer service has improved and pointing out that modifications are in general more affordable than before the program launched.

“Making Home Affordable has been the catalyst that has created more options for affordable and sustainable assistance than has ever existed before,” said acting TARP chief Tim Massad.

Those on the front lines, however, say those improvements are hard to see. In White Plains, NY, the non-profit Community Home Innovations arranged an event for about 100 homeowners meant to address many of the common problems they experienced with servicers. In June of last year, about 15 months into the program, the homeowners met face to face with a specially trained group of Bank of America employees, equipped with scanners that could immediately input customer documents that would be transmitted to a specially designated team.

Bank of America, the nation’s largest servicer, promised the homeowners would get answers within two weeks to 45 days. Seven months later, about half are still waiting for a decision.

In light of the poor results, a Bank of America representative told Peter Spino of Community Home Innovations that it was suspending all similar events until they could fulfill their promises.

“We are always cautious about committing to events when we have capacity constraints that do not allow us to meet the organization’s and customer’s expectations,” said Bank of America spokeswoman Jumana Bauwens. “Since this particular event which took place last June, we have built up our tracking system, improved document collection and expanded the number of associates dedicated to processing loans from these type of events,” she said, adding that the bank had attended more than 90 events in the fourth quarter of 2010.

A push is under way to dramatically reform the servicing industry. Calling servicers “unprepared and poorly structured” to help homeowners during a sharp downturn, the Obama administration is considering changes that would pay servicers more for handling struggling loans, in the hope that this would buy better customer service for homeowners in trouble.

While the call for reform is a tacit admission the program fell short in changing the industry, these changes would only apply to loans made in the future. Burris and approximately 2 million other homeowners have already lost their home to foreclosure over the last two years.

Correction: A caption in this story previously said the government’s foreclosure prevention program, HAMP, launched in April 2010. In fact it was launched in April of 2009.

Unhappy Texan

Feb. 17, 2011, 6:29 p.m.

@ Julie Bradley - 3:38 - Feb 6 posting under Govt’s Loan Mod Program Crippled by Lax Oversight, etc.,  It is too late for many and soon millions more.  Your questions are very valid and though not just the only factor in all cases, the pattern that you have observed has a name: “The Underwriter”.  I am going to post a link to a non-profit organization that is working very hard in launching a campaign effort that the Egyptians inspired him to do, asking every committee in Congress, agencies involved in, or entities that will have a say on either legislating or finding a way to remove the underwriters from the mortgage servicer institutions, with a collective request to hand those duties to a neutral party.  The titles or highlights may not impact some of you, but that is not the point.  The important thing is that once he notifies every victim past and present, through updates in the AAHMP web site, and probably in the next article coming out here in propublica, everyone should get ready including family, friends and anyone who knows anybody who has lost or is about to lose his/her house, or whose loan mod application has dragged for months, or was deceived, to participate in the campaign.  He will post the date, time and instructions.  Please, everyone keep in mind their acronym:  AAHMP.  And after starting with the customary http etc., etc., copy and paste the following link to his campaign blog:

Lets not be too proud to beg and accept whatever Big Fed help we can get before The Republicans
have a chance to act out their outdated 19th century ideas.
We need to look at the future.
The past is water over the dam.

You are Missing Key Points… The Law Firm That Handles Foreclosures In CA.NV. and AZ Also Owns The Foreclosure Company so Its In Their Conflict Of Interest To Overstate what is actually Owed To Courts. Many Chapter 13 Judges Got Sweet Heart Loans and The AG’s ARE ONLY Now Checking Politicians Countrywide Loans. There is another Player that No One is Looking At…I Have Eight Notebooks Of Evidence

Government Intervention… reward failure! The article clearly states that the industry uses “software” that can turn a burger flipping GED into a loan mod specialist!

“A push is under way to dramatically reform the servicing industry. Calling servicers “unprepared and poorly structured” to help homeowners during a sharp downturn, the Obama administration is considering changes that would pay servicers more for handling struggling loans, in the hope that this would buy better customer service for homeowners in trouble.”


lolll..I don’t think I like that choice of word; I associate “dysfunctional” with an accidental or coincidental situation - i.e., a family that became dysfunctional because of emotional challenges afflicting one or more key members.

I note that the wealth-harvesting side of America’s finance industry was/is fully…fantastically…functional.  Were our finance industry “dysfunctional”, I would expect that all areas would show neglect and/or mismanagement.  When the only areas that do not function correctly are related to customer service, compliance with the law, and moral and ethical behavior…

That’s not “dysfunction”; that’s corruption.

Good Article !!  This HAMP is a total outrage nad National Disgrace, written and supervised by government idiots !  The sooner ended the better.

From NEVADA AG Catherine Masto:

The Complaint alleges that Bank of America is:
1) Misleading consumers by promising to act upon requests for mortgage modifications within a specific period of time;
2) Misleading consumers with false assurances that their homes would not be foreclosed while their requests for modifications were pending, but sending foreclosure notices, scheduling auction dates, and even selling consumers’ homes while they waited for decisions;
3) Misrepresenting to consumers that they must be in default on their mortgages to be eligible for modifications when, in fact, current borrowers are eligible for assistance;
4) Making false promises to consumers that their modifications would be made permanent if they successfully completed trial modification periods, but then failing to convert these modifications;
5) Misleading consumers with inaccurate and deceptive reasons for denying their requests for modifications;
6) Falsely notifying consumers or credit reporting agencies that consumers are in default when they are not;
7) Misleading consumers with offers of modifications on one set of terms, but then providing them with agreements on different sets of terms, or misrepresenting that consumers have been approved for modifications.

Because of Bank of America’s false promises, many Nevada consumers continued to make mortgage payments they could not afford, running through their savings, their retirement funds or their children’s education funds. Additionally, due to Bank of America’s misleading assurances, consumers deferred short-sales and passed on other attempts to mitigate their losses. And they waited anxiously, month after month, calling Bank of America and submitting their paperwork again and again, not knowing whether or when they would lose their homes. Whatever the consumers’ particular circumstances, they all suffered the stress and frustration of being misled by Bank of America while trying to take responsible action to modify their mortgages so they could continue to make their payments and remain in their homes.

“We are holding Bank of America accountable for misleading and deceiving consumers,” said Attorney General Masto. “Nevadans who were trying desperately to save their homes were unable to get truthful information in order to make critical life decisions.”

Bank of America’s misconduct in misrepresenting its mortgage modification program was confirmed in interviews with consumers, former employees and other third parties and through review of relevant documents. Former employees describe an environment in which Bank of America failed to staff its modification functions with employees who had the necessary training, skills and experience. According to employees, the modification process was chaotic, understaffed and not oriented to customers. Employees were even reprimanded for spending too much time with individual consumers.

“Consumers turn to their banking or lending institutions for answers when faced with a life changing decision such as saving their home,” said Attorney General Masto. “Bank of America’s callous disregard for providing timely, correct information to people in their time of need is truly egregious.”


Recently Had an atty. show me discepenceis in my Foreclosure !!! I am ready To Drag Esquires and  
  ” Justice Representatives ” Drag through my Streets
For oversight, Fraudulant Filing By Attys. for Freddie & Fannie and Our Gov’t Bailing The Scum Bags Out and I Want True Justice You Miniscule Gucci Suit
  Bmw,  Mercedes   Ass Holes !!!!!!!!!!!!!!!!!!!!!!!!!!!!!
  Where is My And My Neighbors Money George B. ?
Obama ?    Mr. Clinton ???????  Bush Sr. ?????
  Smoke And Mirrors Little Ego Dorks ??????  O.K.
My Fellow Americans !!! Where did Our Money Go !
  Why Were   ” We ” Complacent ?  Not any More !!!
Wake up Neighbors !!! Speak Up and Load Your Guns !!!  O.K.    Pile up Throwing Rocks First !!!! 
  What Does Our Gov’t. Do ?  ” Marshal Law ? ”
  Done With the Current System !!! Sincerely Shawn!

does BAC have a notebook somewhere with these canned “it’s not really OUR fault” answers that its p.r. ladies try to shovel out to the public?
first it was (wah wah) mean old Countrywide came into the fold with so many crappy loans. so *that* was why they were the worst, by far, at loan mods.
then it was (boo hoo) a shortage of staff and a need for time to get more people on board and trained. (and, apparently, a chronic shortage of fax machine paper…lol)
oh, don’t forget this excuse: the loan mods program guidelines kept changing and required “clarification.”
then, BAC’s somewhat sketchy loan mod team announced that homeowners were to blame - for not adhering to the guidelines and for not sending in paperwork.
next, BAC tried to finger “investors” - lying that most of them forbade the loan mods the bank would otherwise happily make. ProPublica showed that this was a stinker of a tall tale, and not true.
BAC also cited issues with second trusts, again needlessly trumping up another reason that although they would *love* to HAMP more people, they were forbidden by those mean old second trust holders.
(what is next - Brian Moynihan on YouTube with a “my dog ate the HAMP loan mod manual?” video?)
then came the suspension of f.c. in the fall, which was another lie (many filed in my country over that period.) and the whole parade of comically defensive BAC types (weirdly poorly dressed and groomed) who whined to Congress (under oath!) that the loan mods were just too, too hard. oh, and that the in-house fee-festival alternatives were better. (better for BAC’s bottom line, natch.)
sheesh. it is enough to make a loyal American a cynic.
I started this process with a substantial amount of money on deposit @ BAC. I am closing my last account these this week - and will be happy to do so.
BAC - banksers gone wild. major Fail.
move your money, folks. and no more checks. make them wait. they might be forced to deal soon, let’s hope.

Nut   Less     America   !!!  Please Wake Up !!!
  In Arizona when Goof Ball Puled out his Gun and
Authorities were Called ??? They sent in The Guys That were Trained To Throw ” Lead ”  Better than the
  “Goof Ball”  O.K. ,  Not to Diminish the Painfulness of   Seemingly Innocent People Being Shot !!!! and the Totally Innocent Little Girl !!!
  Sorry Folks, Not Being Disrespectful !!! The Point is
  Fill out ” ALL ” the Paperwork you Want !!!!!!!!!
  ” How is that Working ” ??????????????
  Then What ???? Here we Go !!! Buckle Up Folks”
Sincerely Shawn !!! Please Understand We really Get Back to Primativeness in Survival Stuations !!!!
  Plan Ahead !!!

When I Say ” Gucci Suit Boyzs”  I mean the people
that are in my tax dollar Circuit That Buy Suits More Expensive than My old Mortgage !!!!!!!!!!!!!!!!!!
Keep Filling Out Paparwork For Dorks People !!
  Let me Know Where That Has Gotten You ????
  Sincerely Shawn Mc.

I guess old habits are hard to break. Some people can’t seem to rise above. What a disappointment. Oh well, I guess they didn’t really mean what they preached?

Concerning the above article, is it any surprise who or should I say which lobbyist wrote the supposed help to the home owners? That the “O” hailed it as help? It was/is a sham, right from the start. We have had 2 years, going on three now, of just what to expect from the present administration. The present Congressional dilettantes & their sycophant helpers of the plutocracy is mind boggling. The question that should be on everyone’s mind, is this the kind of government you want to raise your children under? It’s not going to return to the good old days of yesteryear, but continue to erode until we too have to hold our heads above the sewer line.


Feb. 17, 2011, 10:34 p.m.

Following is everything in one cartoon shot. Link:

Just Piling up Rocks here at the House Norman !
  Sincerely Shawn !!!


Feb. 17, 2011, 10:48 p.m.

Dysfunctional? A more suitable word will be CRIMINAL
Its not more incentives what the gov has to give the servicer’s what we need is more oversight, and punishment every time they brake the law by:
Forging notes, lost of notes, intentional destruction of notes, unauthorized people signing mortgage assignments or endorsing notes, missing documentation, fraudulently fabricated documents, different plaintiffs foreclosing on the same property, plaintiffs who do not exist, illegally breaking in to homes and the inability or refusal to provide proof of purchase and/or ownership of the promissory notes.FORGERY, FILING FALSE DOCUMENTS INTO GOVERNMENT RECORDS, EXTORTION, ABUSE OF PROCESS, FRAUD ON THE COURTS, and countless others of CRIMINAL VIOLATIONS !

And what about all of these?
AIG $70 Billion
Asset Guarantee Program $12.5 Billion
Bear Stearns $29 Billion
Capital Purchase Program $218 Billion
Commercial Paper Facility $1.8 Trillion
Fannie/Freddie bailout $400 Billion
FHA rescue $320 BIllion
GSE debt purchases $200 Billion
GSE Mtg Backed purchases $1.25 Trillion
Making Home Affordable $50 Billion
PPIP $100 Billion
TALF $70 Billion
TARP $70 Billion
TIP $40 Billion
*owning Congress…. “priceless

The people are not even getting part of the 50Billion HAMP to help homeowners, Foreclosures hit over 5 million already
I agree with the first comment and participate in the campaign !




Now Karen, They are not worth wasting your health over. We are at their mercy until the time comes that everybody in this country finds it within them selves to say we have had enough, we want change, if we don’t get it, well, there are ways to achieve the ends. There is a book titled: “From Dictatorships To Democracy by Gene Sharp, that should be among the reads of everyone. Read it, pass it on, organize. If the plutocracy fears more than fear itself, it’s when the people have the courage to stand up to them, which I might add are usually “little men with little——s”. I’m sure you get the meaning here.


Feb. 18, 2011, 1:15 a.m.

Norman,  Amen !

Unhappy Texan, thank you for the mention. I would ask anyone that visits the site mentioned about “This Egyptian Thing” to read the second article on the logic of the effort.

I would also like to make it clear AAHMP is not a non profit. We are a trade group made up of professionals that are needed to assure proper underwriting. Our organization has invested over two years of time and significant funds to create a process that does work.

With regard to the article, there is nothing new here.  We have all known from the start that this current process would not work that is why AAHMP was created.  The objective now is to change the process where it can be changed.

The stories of pending fines are a glimmer of hope. It appears the reason the final report has not yet been released is because OCC and the FDIC disagree on the level of fines. It is not a question if fines are coming for poor performance but rather at what level. I have spent all day creating a proposal that I have just sent to all relevant parties involved in the process.

My proposal is based on the single message I propose be used in “This Egyptian Thing” effort.  That is the underwriting needs to be taken out of the servicers hands where ever possible. What if one of you where denied a modification after paying a trail mod for 10 months. If a neutral third party underwrites the file and it proves that person did in fact qualify for HAMP the servicer would be fined plus lose the incentive program of $4k. This would translate into big loses to the servicers.

Yes, to many this may seem a small amount and does not equal the anguish a person is put through when dealing in the system. This is however a start - something hundreds of thousands of people can look at for possible hope.

This is an achievable goal, a change that can take place if we get enough people to support our effort. There will be many hearings coming up relating to the announced fines, we need to target the right people at the right time. We need to get all the frustrated American to speak with a single message.

Needs to be some eggs Broken for this situation Steve !!!
  Thanks Norman “Dictatorships To Democracy”
Suggestion . I would Like to Suggest a Great Book Referred to me by A Very interesting Fellow
”  Unintinded Consequences ” By A Fellow Named
  John Ross .  Written or at least Released in 1996 +/- !  Sold for 15 $  New.  Now Over 100 $ to Get But it is in Your Library’s .  Long Book , Will Get You !!! Keep Reading !!! Sincerely Shawn Mc.

I’m sorry Shawn, I am not sure what you mean - eggs broken.  Excuse my ignorance.

Eggs Broken Steve is Playground Mentality In Our Present Day !!!!! The Only Reason A Bully or Jerk Picks on Others is Because They Realy don’t Believe They Will Have to Swallow their Own teeth in the Next Few Minutes Or Later !!!!!  Only reason People Pick on or take Advantage when they think they Can is Because they don’t Think Someone will Drag Them Out Of their House and turn Them into A Vegatable in Front of their Children and Wife !!!
Any Questions Now Steve !! ??  Anyone Else ???
  thats Why I Say , Keep Playing Paper Games with the Scum Bags that are Doing and Continue to Do What their Doing !!! Mark My Words !!!
  If you think Your Pen and Paper and Good Education will Help ,  ? Keep It Up !! Call Me When The Note to The Principal About The Bully Doesn’t Get You or Others Very Far !!! I am Your Guy !!!
  Shake a Mans Hand And I Can Normally Figure Their Profession !  Lilly Handed Gucci Suit Gov’t.
  Esquires, Judges ........;.;......;....; Please Lets try to Proceed Civily !!! Time Will Tell Steve !!!
I Really am A Fair Person ! Thats what Equips Me to Detect Slight Of Hand Fellows ! Met Many of those in My Life ! My Newly Elected Govenor ?  I Would Not have the Weasle asx My Neighbor !!
Fact ! I Have Carried Bags For Him and In His Group For 15 Yrs. and Welcome To America !!!

Shawn - I guess you agree with me than. Its like 10 people all walking up to that bully and saying you can’t do this no more - there are to many of us.

Golly I am Such A Heathen sometimes and Glad to Have Intelligent Calm Reasonable Wonderful People in my Infield and My Outfield !!! Would Really Enjoy Meeting all of you Face To Face ! Thanks Steve for your more Non I’ll say Confrontational Approach !
  I am an Excitable Irishman, and My Father Taught
me to box when I was 3, 4, 5, 6, Every other Day !
However, I am a Very Kind and Loving Man as my 2 Old Spoiled Dogs and My Son would Attest !
Thing is The Bullies in my Life Misread Meak ...For Weak ...  OOOps !!! So I am A Bit Cultered and try to have an Open mind and Keep Learning . 
Though there are Probably Code Violations For
Fellows Like Myself Living Within City Limits !LOL.
  Sincerely Shawn Mc. Lets Keep Together Steve,
  “We 10 ” Thanks .  Seriously !!!


Feb. 18, 2011, 3:13 a.m.

While our country’s lenders’ actions are utterly abusive and taking full advantage of a system with no proper oversight… there should be no surpise here. After the real estate crash, the lenders just moved on to the next phases of gutting piggy banks… take taxpayers’ money by promising to modify loans and help homeowners, then take homeowners’ money through bogus trial modification plans which end in an arbitrary denial for permanent modification and foreclosure - thus getting a nice lump sum of cash… in California, the law firm of Fransen & Molinaro is accepting clients who “failed” trial loan modifications for litigation against lenders - www . fransenenandmolinaro . com for details and further information.

Unhappy Texan

Feb. 18, 2011, 3:30 a.m.

Sorry, did not mean to mislead.  Too much reading in too short a time in too many blogs including the non-profit ones and for some reason I got a little confused thinking that AAHMP was one of them too.

Now, as far as Steve’s intention in his Egyptian Thing, I know from experience that like many, we and others were victimized by the servicer who could no longer deny approval of the 3-month trial period under the pressure of compelling proof of qualification, but were also subsequently hacked by the underwriter just “because they can”

So please, quoting Shawn ““Needs to be some eggs Broken for this situation Steve !!!, “” is the closest we can get to be heard by legislators; but the numbers will have to be huge and therefore, all the other organizers and web pages that are planning any kind of massive local protest, all of us - globally -  will be better served with ONE unified, massive and effective campaign at a national level.

So in addition to visiting his web page, keep watching his postings here too.

Unhappy Texan-You are so appreciated Sir. Many people do not have a clue what Steve and his company have been trying to do. It is not about the money (even though he and his backers have invested millions in the software etc. to be able to truly help) as he and those who are in his company have fought this battle since the beginning. Given the chance I KNOW they can make a difference. At the very least, all will be given a FAIR and HONEST answer. Hundreds upon thousands of homes can and WILL be saved. I beg anyone reading this post to investigate further… This effort is for REAL, please join in.
Shawn Mc.-I recognize your thinking. My blood Father was a “prize fighter” back in the day. First toy I remember after learning to walk, was a contraption that had a flat metal base (to stand on) of which was attached a spring pole with a speed bag. Only have one good arm at present, but feel my jab would suffice with any of these bankster lillies. Although we both know that brains will prevail in this battle…it would be an honor to have you at my back as I would be at yours!

Olga and Paul,

With all due respect for your great work on this topic, I think this article completely misses the boat. It is written on the premise that HAMP was intended to help homeowners when in fact it was intended to help investors in mortgage backed securities.

You wrote :

“On paper, the government’s Home Affordable Modification Program, or HAMP, was supposed to address one of the main roadblocks to modifying loans”

I don’t think so! Consider that the seldom seen FDIC HAMP guidelines state on page 3 that the program

“MANDATE that the cost of a modification must be less than the estimated foreclosure loss.”

Unless I’m completely crazy this means that homeowners with substantial equity are categorically denied permanent modifications.

And we know that underwater homeowners are denied because the banks don’t want to take principal write-downs. 

So it seems that only homeowners who are just a BIT underwater, or have just a very SMALL amount of equity actually qualify for HAMP modifications.

HAMP is a scam.  It was doomed from the start by it’s very own guidelines.  And, to add to the problem, the governments HAMP qualifications page never asks about equity, so homeowners like myself are lured into trial modifications that were doomed to fail, because the HAMP program mandates that the bank REJECT us, and tap into our equity via foreclosure instead!

Now, if I’ve got this wrong, I wish someone would explain to me how I’ve misinterpreted the facts. If not, I wish this article exposed HAMP for the SCAM that it is, rather than suggesting that it was a well-intentioned program that simply didn’t work!

Note also that AG Tom Miller, also suggests that homeowners with equity be excluded.  He testified:

“To be clear, the States do not believe that every foreclosure is a tragedy that must be avoided. To the contrary, we have consistently stated over the last three years that we are only interested in modifications where the cash flow from the modification exceeds the expected proceeds from a foreclosure sale.”

Paul. Olga.  Please respond!

Everything reported here by propublica is spot on. After being laid-off in August 2008 applied for a modification in then with my bank. The program was new and everything was slow. I understood. Program ramped up and I was unemployed for a year, stringing out a severance, going on unemployment until it ran out, living without health insurance for my wife and kid. Almost a year to the day I was laid off I finally found a new job in a horrible economy at $10K +/- a year less than the old job. Still was trying to get the mod through the bank. FAXes never received, underwriters refusing to approve, started the process again because of a mistake by the bank, but, by God, finally got a mod on the mortgage!

At $200 less than per month than the original.


Not everyone who had issues with their mortgages during the meltdown were in their troubled homes through risky and shady loans OKd — surprise, surprise — by the mortgage companies and banks that caused the damn mess to begin with.

Yet it’s these same people, who never were brought to task (and hell, some banks prospered!) that are now “helping” me…? It truly is sad and sickening that after what this country has gone through over the last three years or so that the greed is still firmly cemented int he foundation of these banks.

Two-hundred bucks a month? WTF?

I wasn’t employed in the real estate sector, or construction. But the domino effect nailed my company and ultimately my job. I paid my mortgage as long as I could. Then just couldn’t anymore; jumped through the hoops for two years to get a mod — and for what?

Looks like we’ll lose the place anyway, even with their “benevolence.” 


How about this:  Reset everyone’s credit standing/report who has been effected by this blatant criminal behaviour from “do not touch” to “good”.  Sounds fair to me.

This whole HAMP program was dysfunctional from day one, proposed by and supported (?) by dysfunctional, self-centered politicians and a president who says one thing and does another. The greedy banks and service companies (Ocwen, for one) are also complicit in this government scam. Just another case of the average family suffering at the hands of our completely incompetent government officials. I guess this whole process shouldn’t surprise me after 18 months of dealing with a totally disinterested, rude and lousy service company.



@Shawn Mc: 

I’ve got my “eggs and rocks” at the ready!!!!


Thanks Acmodspecialist, Karen , Steve and Norman an Mr. Baker !
  I watched the youtube Show U both Suggested !! Good Stuff !!
Funny Part was, A the Club I Loop at, The old Sr. CEO’s of 3 Banks
Retired in 2005 - 2006 !!!  Makes Me Wonder What they Saw Coming Down the “Mainstreet”  Hmmmmm.
  Now We have Quite A Few Lawmakers, Senators & Such are Announcing Their Retirements !!! What Do They See ???
  I Submitted For Dismissal of my Foreclosure Last Fri. Based on Fact.
I Have to Pay Attention and Submit Civil Against The Esquires and Freddie Before The Weasles “Gucci Suits” Can Resubmit With some Other Guise !!!  Requesting Jury of My Peers ! And Think I will Call out The Blind Judge That Rubber Stamped The Forclosure !!!
  Why Should any Judge Entrusted to Be Just and Doesn’t Not Be Thrown out “Off The Bench”  Mess With Americans Some More Dorks.
Try to Make Sure they all Lose there Law Firm and Their Houses !!!
  Any Suggestions Neighbors ?  ( And I Am Being Nice )
Sincerely Shawn Mc.


Feb. 18, 2011, 5:57 p.m.

JS, You have most of it right except that I will also like to add that Banks and Servicer’s. make a lot of money by getting borrowers in to the Trial Period Plan, because all the money the borrowers are paying while in trial period its put in a suspense account (that in itself should be illegal)  they keep all the money trial payments for themselves, they do not apply it in to the borrowers account, they do not return it to the borrower, and they do not give it to the investor, Is simple robbery without a gun, is nothing more than simple theft and the longer you are in that trial plan the more payments and more money for themselves, Also many times when they finally modify a loan, or foreclose the keep all that money they don’t apply them at the end Trial Period Plan = License to rob
In regard to the equity the wrongly logic they using is that if theres is equity on the home then borrower has money (equity) and that also because the borrower has equity he can refinance (which many times its not true because banks don’t want to refinance unless you are at 60%-65% LTV,  FHA you can do as much as 96% but is no easy, now there is a Home Affordable Refinance Program (HARP)  that goes as high as 125% LTV but you have have the mortgage owned or guaranteed by Fannie Mae or Freddie Mac and only if you do not have an FHA, VA or USDA loan.
you should look in to it
Good Luck


Feb. 18, 2011, 6:09 p.m.

Shawn Mc I commend you for fighting the foreclosure on the courts, good for job I believe that maybe at the end foreclosure will be fought and won at the courts, keep pushing back and good luck !


Feb. 18, 2011, 6:11 p.m.

Shawn Mc, I commend you for fighting the foreclosure on the courts, good for you. I believe that maybe at the end foreclosures will be fought and won at the courts, keep pushing back and good luck !

I know many will disagree but HAMP is a good program - it has failed not because of it design but because it was not implemented properly by the servicer and there was no enforcement by Treasury.  The only problem with HAMP is the NPV test.  Comments made here are accurate however I do not have the current figure but in the first year only 7% modifications where declined due to NPV.  That is 7% to many but you have to remember where that came from - The Chairwomen of the FDIC. Her job is to protect the financial institutions of the country so it is not suprise that was her position.  Everyone should know that the FDIC are the one’s fighting for the largest fines.

With regard to the creation of HAMP, it was not created by the banks.  It was originally based on the FDIC mod-in-a-box program.  They where flaws in that program so additions where made that enhanced the fairness of the program.  One enhancement was of the NPV test where the servicer “can” modify regardless it the test was positive or negative.  HAMP does not require a foreclosure if test indicated its better to foreclose.

There where suggestions made during the formulation of MHA (HAMP) that where not adopted.  Two examples are the 30 day requirement for underwriting and that underwriting be completed prior to a trial mod. These both where adopted later and are directives of HAMP. It is the servicer that is not following the guidelines and directives. You can argue the case that we need enforcement however look at the nexus of HAMP which is TARP.  The TARP legislation (EESA-2008) in Oct 2008 did not give enforcement authority to Treasury.  This was not done intentionally - I think - but was addressed in TARP II which pasted the House but dropped in the Senate.

HAMP can work, not for everyone but for many. It is nothing more than a loan product. This is not that difficult we just need to take the underwriting out of the hands of the servicer where possible.


Feb. 18, 2011, 7:38 p.m.

Finally a politician that gets it


Feb. 18, 2011, 7:49 p.m.

Everybody should sent letters of praise to Senator Sheldon at least hi is trying to d something about the Banksters abuses Where is our president?


Feb. 18, 2011, 8:32 p.m.

Steve is right too, The program also can be improve no denial on that but it works, the program could work very well if banksters would implemented the way they suppose to and the fact that there is no punishment or enforcement for the banks is the main problem.  They are denying modifications under many lies (“investor does not modify”, “Not Qualify”, “Over 31% DTI”, Not owner Occupied” even after sending utility bills)
I said lies because when you challenge any of this reasons for denial you find out that they are lying, If you get to contact the Investor he tells you that yes he will modify, if they said that you are under 31% DTI its because they have all the gross income wrongly input in their system, (even that you sent the pay stubs 20 times) if you request the NPV input calculations they are all wrong (a bank making wrong calculations?) Steve says that 7% modifications where declined due to NPV test but the truth is that even this 7%  would be a lot less % if it was challenge or oversight, So even that 7% denial should not be, The program could work if it just have some teeth in it


Feb. 18, 2011, 9:14 p.m.

The truth is, Banks have stole trillions, here is one

I really have only stated some of my “Unconventional” Tactics !!!
  Probably don’t want to go There when Our Gov’t. on these Websites May be able to Keep a Tab !!! Isn’t Technology and The Patriot Act Sweet !!! ????
  Definately Looked up the Names of the Attorney Firm Defrauding the System against Me “Happy Homeowner” For Greedy Freddie !!! Spent A Nice Winter Day Looking Up and calling Every Name in The Area Where the Esquires were From and Managed to Talk to Mothers , Grandmothers , Sisters and Brothers, Uncles and Aunts to let them Know I was an Old Friend Trying to Get in Touch With My New Friends.
  I Ended up with Home Phones and Personal Cells Given to me By My old Friends Families !!!  Then and at that Point the Esquires on The following Monday Started Calling !!!, Apperantly If you Really Want to Illegally Trow someone out of their House With The Court Jesters
  Approval !!! The Little Guccis get Up-Tight When They Know You Know Wher Their House Is !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
  Oh, I am Sorry, Did I Overstep My Bounds !!!  Oops ! Not !!!!
  Grandad Said That When Someone Wants to Play Games With You
Take It T Their Doorstep !!! Amazing !!!!  Genius !!! In Your Face !!!
  Believe Me these Scum Bags Don’t Want us on Their Front Porch !!!
    Sincerely Shawn Mc.    Stacking Up Rocks To Help Defend My Neighbors !!! Thanks Neighbor !! and Yes I am A Bit Unorthodox !!!
  Isn’t It Fun !!!  Maintaining My Sense Of Humor and Hope to Instigate all Of Yours as Well !!!

Parallel Foreclosure

Feb. 19, 2011, Midnight

Steve, HAMP requires parallel foreclosure before one can even apply for HAMP.  This may actually be a federal hobbs act violation, the extortion clause, under the color of right.

Using taxpayer funds to lure taxpayers into the accelerated loss of their home just does not seem legal to me, especially after I learned about HAMP.

Barack Obama could be charged with Federal Hobbs Act violations since he has been a big advocate of the program and used it to generate positive publicity for himself.

I find it amusing when I read comments whose majority is just filler…just time-wasting until they can conclude with their real goal:  An attack upon Obama or some other individual who might dare to try to serve the American people as is their mandate.

Attacking Obama when no one else made any effort at all to help those victimized by the bankers is rather like shooting the paramedic who has finally answered your 911 call for being late - before said paramedic is able to help you at all.


the Senator Sheldon video is great…so sad though…

They use words like “catastrophe”, “nightmare”, “tragedy”...yet have absolutely no solutions…Geitner can’t even answer the question…

The Fine Print Got Put in Documents A Long Time Ago so The Average Hard working Man When Presented With Fine Print was Pretty Sure He Needed an Atty. To Help Him Sort through the fine print for what Predicament They might Be in !!!
  Unfortunately the Point is, the Attorneys and Esquires were the ones that Started and have stuck with the Fine print !!!  Gucci Suits and Maybe Hand made Italian Leather Shoes to Go With !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
  We have been Complacent America !!!  The Minute any of you From
  Kennedy’s Assasination   Believed What You were told We Became
  Complacent !!! 
  Seriously     Way Before That !!! However I wasn’t Even Born Before
  LBJ “Arrogent Goof” and His Buddies Wanting to Make Money and Be Kings Did what They Did !!!   
  Learned to Shoot When I was 6 yrs.  and Since That Time i Figured out
about Gravity Trajectory and Common Sense Work and I am Truly Sorry
we have   Been Fooled So Long By People we Thought We Could Trust!
  My Step Grandad That is An Historian With Quite A Few Books Published Told My Stepfather and I in   Fall of “2007” That to Him It looked as though we were Heading For Another American Revolution and
My Step Dad and I were Scratching our Heads !!!  ” Not Now” !!!!!!!!!!!!!
I am so Greatful of the Most Wonderful People That I Have in My Life !!!
            Sincerely Shawn Mc.  Thanks Neighbors !


Feb. 19, 2011, 2:26 a.m.

ibsteve2u, Mr,Parallelforclosure may be a little harsh on Obama but at the same time his not that far form the truth Obama’s Chief of Staff is William Daley a former Exec of Jpmorgan Chase, Then we have Geithner who was directly involved in the move that allowed JP Morgan Chase to acquire Bear Stearns with $29 million provided by the government earlier, Also worked as part of the deal that saved AIG from failing, then he chose for his economic team former Goldman executive Gene Sperling who made millions on wall street as economy tanked, then is Michael Froman, deputy national security adviser for international economic affairs, worked for Citigroup, Louis Caldera, director of the White House Military Office, made $money last year from IndyMac Bancorp, Then Obama’s deputy national security adviser, Thomas E. Donilon, was paid millions by a Washington law firm whose major clients include Citigroup and Goldman Sachs and it goes on and on…The presence of multi-millionaire Wall Street insiders extends to second- and third-tier positions in the Obama administration as well
So there you have it


Feb. 19, 2011, 2:39 a.m.

Hey Guys ! Inside Job the movie documentary is coming out in DVD on March 8th everybody should see it and get inform, don’t miss it !

acmodspecialists - I don’t think you can blame Obama for the behavior - the associations - of his “staff”.  Ever since about 1980 there has been a regular “faculty” at the White House that - on the surface - appears to be passed down from President to President.

But that isn’t really the case…the truth is every once in a while the “faculty” gets a new President to play with.

Typo, by the way…ever since about 1970.

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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