Monday, May 24, 2010

Loan Aid Leaves Some Worse Off

In a May 18, 2010, article the Wall Street Journal reports how many homeowners who participated in HAMP “Obama Plan” loan modifications are worse off after the experience. The story reports that one in four participants in the program gets dropped.
Back on January 24, 2010 in the blog post titled “Is HAMP one big Scam?” this blog explained that while HAMP was conceived by the government with good intentions many banks are tricking homeowners into making additional payments under HAMP trial plans and then denying permanent modifications.

The Wall Street Journal told the story of how Mia Parry bought a home in Phoenix in 2005 for $535,000 which would sell for around $250,000. Parry first requested a modification from a unit of Citigroup Inc., the servicer of her two mortgage loans, in June 2008.

Ms. Parry's application was turned down in late 2008, but President Obama's announcement of HAMP in February 2009 rekindled her hopes. Ms. Parry decided to keep making payments on her loans because she expected to qualify for this new program.

According to the Journal Citigroup started Parry on a HAMP trial in June 2009, and she made three payments. Then Citigroup told her there had been a mistake and she would need to go through another three-month trial.

At the end of that second trial, Ms. Parry said, Citigroup told her the investor that owned her first mortgage wasn't participating in HAMP, so she couldn't get a modification under that plan. During her trial period, Citigroup charged her more than $1,300 of "late charges" and "delinquency expenses," she said.”

Clearly, Citi knew or should have known whether the “investor’ was participating in HAMP. It is just too convenient that Ms. Parry apparently does not know who the “investor” is and Citi apparently is telling her the investor apparently without naming names so that she could confirm whether the statement in accurate. An argument can be made that since Citi participates in HAMP and received billions of TARP money and emergency aid from the government to keep it afloat, Citi must participate in HAMP on those loans it services.

Any homeowner who contemplates starting a trial modification should get the first and last name of the person they communicate with and confirm their oral communications by E-mail. If a homeowner is going to make three trial payments the bank should agree that if all three payments are made on a timely basis then the modification will be made permanent. If the bank makes an oral promise to this effect the homeowner should confirm the promise by E-mail or fax. If the bank will not make this promise the homeowner should refuse to send the trial payment and obtain legal representation.

The foreclosure attorneys in the Dade, Broward, and Brevard offices of Shuster & Saben are defending many homeowners in foreclosure where lenders are servicers broke their promises of giving permanent loan modification. We have also sued banks that promised modifications, took our client's money, and broke their promises. If you have a HAMP horror story we want to hear about it. If you are a Florida homeowner that is not in a county we serve we (currently we defend foreclosures in Dade, Broward, Palm Beach, Martin, St. Lucie, Indian River, Brevard, Orange, Collier and Lee Counties) we will be happy to refer you to a talented attorney in your area.

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