I hate going through troubled times, but who doesn’t. Rather than getting upset, I choose to inform other people so that they can be educated on what’s going on in the world. Has anyone heard of the “Making Homes Affordable” Program (HAMP)? If not, here is a link: http://www.makinghomeaffordable.gov/. In short, this is a modification program offered by the federal government to make monthly mortgage payments more affordable. You first contact your lender about the program and if your payment is more than 31% of your income, you likely qualify. After qualifying, you provide the lender with requested documents (pay stubs, bank statements, profit & loss statements, etc.). Once they have this info, they provide you with a “trial” documents and a reduced payment. After making three trial payments and providing the required documents, you are supposed to be placed into a permanent modification. The problem, however, is that many homeowners are never placed into a permanent modification. Instead, lenders keep these modifications in limbo, extend them as much as they can, all the while collecting payments from homeowners. I know this, because it happened to me. Dan and I applied for a modification after his diagnosis and after I lost my job and was laid off for 9 months. When we contacted our lender, Chase, we were advised that the only way we could qualify for the program is if we were to fall behind on our payments. Chase advised us to skip a payment to qualify for this program. Stupidly, we took their advice. After skipping a payment, we met with a representative at the Troy, MI branch. This meeting was then followed-up by document exchanges sent via fax and FedEx to the main Chase office in Ohio. Following this, we received our “trial” documents and began making our payments.
During this time, we continued to receive letters stating that they needed more documents (documents that had already been provided & were provided on multiple occasions). After making more than a year’s worth of payments, we received Notice that we did not qualify for the program. Why, then, did they continue to accept our payments every single month?
After telling us we didn’t qualify, we were given multiple reasons for the denial…first, we made too much; second, we didn’t make enough; third, we didn’t provide enough documents.
Their next suggestion was to have us re-apply for the program, which we did. During this process, our loan was transferred to a “servicing” company, IBM LBPS. They hold themselves up as a mortgage company, but I really can’t see past their real operation – debt collection. This company gave us the same runaround as Chase – we again applied for a modification and after many unreturned phone calls, etc., we were advised via a taped phone conversation that our modification was approved. We were even given a payment, an interest rate, a due date, etc., but then, guess what? Yep, somehow it was denied after it was approved.
Along with losing the house is the extreme damage that it has caused to my credit. What applicants aren’t clearly advised of is that payments made through a “trial” modification aren’t applied to the loan, nor are they reported to the credit bureaus. So, after more than a year of making payments, I owe more on my house than what I mortgaged it for and my credit report reflects that I haven’t made any payments!
Not knowing what else to do, Dan and I contacted a consumer protection attorney who has filed a lawsuit against JP Morgan Chase in the Federal Court here in Michigan, but in the meantime, there remains little we can do to keep our home. We relied on the false promises and assurances that our mortgage company provided. While the lawsuit is pending, we have listed our home for sale as a “short-sale”. Here is a link to the listing: http://www.realestateone.com/homes/211003585_MIRC-34569_Blackfoot_St-Westland-MI-48185. The house is now listed for less than 90k, a significant amount less than what we "owe". My hope in sharing this information is that more people will not be lured into this program and that if you have been wronged; that you find the courage to take it to court and fight for what is right. If, by chance, you are involved in a situation similar to the nightmare above, I can refer you to our attorney, who only handles consumer protection affairs. I can also refer you to our realtor, who specializes in short sales and has experience dealing with situations similar to ours.
