HAMP hypocrisy: Dana's story

McGookey Law
Jul 11, 2013

 

Dana came in last week with a story we have not heard before. Her story exposes the blatant hypocrisy banks display when administering the mortgage relief program known as HAMP. As indicated many times before in this column, because it is profitable for the banks, who do not own, but rather are only servicing (collecting payments on) your loan, to foreclosure, they are loathe to cooperate and allow homeowners great loan modifications, even when federal law requires them to do so.

Dana had been vigilantly trying to get a HAMP loan modification by sending in reams of financial information for several years. All her efforts were for naught however, as her bank repeatedly told her she had not submitted all the necessary documents or that she just did not qualify. Eventually, the bank put her into foreclosure and obtained a judgment. Several weeks after it obtained judgment, the bank finally got around and approved Dana for a HAMP loan modification. As Dana’s financial circumstances hadn’t changed over the years she was attempting to get a modification, there was clearly no legitimate reason for her bank to have waited as long as it did before approving her. In other words, Dana was a victim of a practice we call “a false HAMP denial,” joining a group of hundreds of thousands, if not millions, of American homeowners suffering the same fate.

Unfortunately, the modification offered Dana did not meet her needs; in other words, it was built to fail. Keep in mind that this scheme makes perfect sense for the unscrupulous loan servicer, which gets paid more when a loan goes into default, and makes more money as the matter drags on. Thus, by taking the judgment against Dana before offering her a modification, the bank put itself in a position to force her to have to accept the offer or else risk losing her home. However, since the modification offered Dana gives her little relief, chances are likely that, should she accept it, she will fail in making payments, and end right back up in foreclosure.

I have not talked with Dana since last week to find out whether she has chosen to accept the modification or continue in legal battle. As I explained to her however, she is a victim of her bank’s violation of the federal HAMP law. She should have been offered relief years earlier, rather than being forced into foreclosure. Her bank accepted federal bailout funds with the understanding it would comply with the consumer mortgage relief statutes. On the other hand, just like so many of its bank brethren, in the end it is guilty of HAMP hypocrisy by not living up to its word to American taxpayers and homeowners like Dana. Do not let your bank victimize you!

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Copyright 2013 Daniel L. McGookey