Linda Jamison first came in to see us in May of this year after receiving a complaint seeking foreclosure of her $270,000 mortgage. She and her father Rex lived in the home, and refinanced it in 2007 at an interest rate which caused their monthly payments to be just over $2,500, including taxes and insurance. Between Linda not being able to work on account of a disability, Rex’s income from veterans’ disability fixed at a little over $4,000 per month, and mounting household expenses, the Jamisons began struggling making their payments several years into the loan.
As we see all too often, it appeared right from the start that the Jamisons’ rights under federal law were being violated because of their bank’s failure to make an effort to qualify them for mortgage relief under the Home Affordable Mortgage Program, otherwise known as HAMP. Based on their joint gross monthly income, Linda and Rex’s mortgage payments of $2,500 per month far exceeded the limit allowed by HAMP. Despite that fact. their bank never made an attempt to get them into the Program during their years of mortgage problems. The reason for this is twofold. First, the loan servicer is financially disincentivized to work with the homeowner, as it makes much more money servicing a loan in default than it does by qualifying homeowners for HAMP relief. Secondly, there is no enforcement of the HAMP regulations by the feds. Therefore, the banks have free reign to run roughshod over homeowner rights.
Given this, the victimized homeowner is left to his or her own devices in calling the bank out on its transgressions. Fortunately, in the case of the Jamisons, HAMP relief was offered at lightning speed once we did just that for them. Less than three months after she first came into our office, Linda and her father were offered the HAMP relief they deserved. And that relief was truly dramatic, and will be long-lasting. Consider the before and after numbers in the chart below:
Old Loan Terms New Loan Terms
Principal and $2,052 $1,264
Payment Including $2,418 $1,630
Taxes and Insurance
Interest Rate 6.75% 2.125% for 5 years,
then 3.125% in year 6, then 3.375% thereafter
Principal Loan $270,000 $292,000 ( increase due
Balance as of 11-1-11 to unpaid taxes and ins.)
With a reduction in their monthly payment of principal and interest of 80%, the Jamisons are in their home for good. This is obviously great news for them. However, the shameful fact is that millions of homeowners are not nearly so fortunate as Linda and Rex. Whether it be false HAMP denials, non-compliance with Fannie Mae. Freddie Mac, FHA and VA servicing guidelines meant to keep people in their homes, or “cooking the books” by heaping false charges on loan balances, or not properly crediting payments made, mortgage fraud is rampant in this Country. And yet those who are sworn to serve and protect us remain eerily silent. Will the government please stand up and do its job?
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Next week: An early Christmas for Dave.
Copyright 2013 Daniel L. McGookey