Without a doubt, the federal government program know as HAMP is the most valuable, yet most overlooked, weapon homeowners fighting for mortgage relief have in their arsenals as they battle to save their homes from foreclosure. The reason for this is simple: loan servicers are paid a percentage of the mortgage loan balance; the higher the balance, the higher their compensation. This being the case, there is more money in falsely denying a homeowner HAMP loan relief than there is in granting it for the servicer. And this is exactly why over half of our clients are what we call false HAMP denial victims. Making this sort of fraud so pervasive is the fact that the servicer is in almost total control of the loan modification process. The government, to its great shame, has opted out of regulating these crooked loan servicers altogether, leaving the poor homeowner as easy game for false HAMP denial victimization, in most cases not even realizing that he or she has been hoodwinked.
In this bleak environment, we are happy to report a fantastic HAMP success story. It involves Ralph, who came in to see us in November, 2013. At that time, he was already seventeen months behind on his mortgage. As we see so often, his HAMP victimization went back a period of years, to 2009 when he was unable to work and was forced to go on disability, thereby bringing in considerably less money. Despite being a year and a half behind on his payments, Ralph was not yet in foreclosure. Again, as we see so often however, the servicer did not, as it is legally required to do, make a good faith effort to work with Ralph to qualify him for a HAMP loan modification.
The approach to Ralph’s case was immediately clear: call the servicer out on its fraud, convincing it to change course away from the fraudulent one it followed for so long, and work with us to get Ralph HAMP-qualified. The strategy worked, with the results being truly amazing. With the modification, Ralph’s principal and interest payment dropped like a rock—from$914 per month to $387! With this reduction, Ralph will be able to easily afford his mortgage, even on his lower disability income. And this is exaction what HAMP was meant to do; get homeowners whose financial lives how changed lower mortgage payments so they can stay in their homes. Unfortunately, the Program hasn’t worked as envisioned simply because the government left out of the law any real enforcement teeth. Even so, you can use HAMP to your great advantage should you be determined and savvy enough.
Note from the author: If you have questions or comments- regarding this or any Foreclosure Story article or should you like to have a “free mortgage analysis”, please visit www.mcgookeylaw.com
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Kate Eyster contributed to this article.
Copyright 2014 Daniel L. McGookey