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Mortgage Modification Program Off To Slow Start

Consumers suspect incompetence is planned

By Mark Huffman
ConsumerAffairs.com

August 5, 2009

Only 15 percent of eligible consumers have been offered assistance so far. Only nine percent are currently in trial modifications, designed to lower payments and prevent foreclosure.

The administration, for the most part, is blaming the mortgage servicers. Assistant Treasury Secretary Michael Barr told reporters that some institutions have done "an infinitesimally small amount" to help homeowners. That seems to be reflected in a number of complaints to ConsumerAffairs.com. Many point to what they see as ineptness and a general lack of interest.

"Chase sent us a nice government related remod packet, received on July 8, 2009, with the first of three "good faith" mortgage payments due on July 1, 2009," Joe, of Coral Spring, Florida, told ConsumerAffairs.com. "I was already overdue on the first payment since I received their FEDEX packet a week after due date. Never-the-less I called Chase and was advised to send the first payment ASAP, which I did with certified check and mail."

Joe said he sent the next due payment days later in the same manner to assure on time "good faith" payment.

"Now weeks later I received the certified checks back as 'delinquent' and a separate CHASE letter from another state encouraging me to 'contact Chase ASAP so we can work together' to save my home."

I see from many others on the internet that this is an organized scheme by Chase for whatever reasons... and I wonder if the rest of you will be going to your congressman and the media like myself. Save all your documentation and copies of everything because you will need it!

Joe said he thinks Chase is purposely delaying the process because it would rather foreclose on his home than modify the mortgage. He urged others with his experience to call their member of Congress.

Meanwhile, Guy of Jackson, South Carolina reported a similar frustrating experience in trying to work with Nationstar, the mortgage servicer that bought his Ditech loan.

"We were told what documents were needed and how to send them to Nationstar," Guy told ConsumerAffairs.com. "Those documents were readied and I faxed all eight pages to Nationstar. My fax machine printed the confirmation.

But several months passed and Guy said he was close to losing our home, without having heard from his loan servicer.

"We contacted Nationstar and we were advised our loan modification process was never started because our necessary documents never arrived," he said. "I explained that I had a fax confirmation and I sent the documents months before. Nationstar advised us at that time to re-send the documents."

Guy is also suspicious of his loan company's motives. He said Nationstar suggests different ways to modify his loan, but there are so many stipulations that it makes it impossible for him to qualify.

"So, we are trying to sell and every payment is an act of God," he said. "Never in my 50 year life of dealing with people have I ever dealt with people like those at Nationstar."

But some struggling homeowners apparently have it worse. According to the Treasury Department report, American Home Mortgage and National City Bank had not made a single mortgage modification during the reporting period. Bank of America had a measly four percent assistance rate and Wells Fargo was little better at six percent.

"We're disappointed in the performance of some of the servicers," Barr said. "We think they could have ramped up better, faster, more consistently and done a better job of serving borrowers and bringing stabilization to the broader mortgage markets and economy and we expect them to do more."

This week top Democrats in the House and Senate raised the threat of renewing a push for so-called "cram down legislation." Sen. Richard Durbin (D-IL) said he might reintroduce his bill giving bankruptcy judges the power to rewrite some mortgages, to make them more affordable. Durbin's original bill to do that died in committee earlier this year.

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