Loan modifications burn many homeowners- Lenders cancel trials; borrowers surprised

[Cass]

Source: McClatchy News Service

MINNEAPOLIS — Many people who sought help under a federal program created to keep them from losing their homes are instead saddled with huge, unexpected bills.

...
Lenders routinely approved short-term “trial” loan modifications that reduced payments for desperate borrowers under the umbrella of the Obama administration’s Home Affordable Modification Program. But lenders continued to count the mortgages as delinquent or in default.

Now instead of granting permanent modifications, lenders often are reinstating the original loan terms and demanding big back payments.

Through November nationwide, lenders canceled 729,109 trial modifications. Carl Christensen, a Minneapolis real estate attorney, said he is getting 15 telephone calls a week from shocked borrowers.

Read more: http://www.news-press.com/article/20110130/RE/110129012/1076/Loan-modifications-burn-many-homeowners

[Raster]

1. But of course. The spotlight is off the lenders. It is back to business as usual.

Foreclose, foreclose, foreclose.

[xchrom]

2. recommend

[Ian David]

3. BoFA is doing this to us. They won't even let us pay them while they generate a new mortgage. n/t

[cstanleytech]

4. It smells like a scam to me by the banks

but then again if and i stress *if* the people were told they might be denied and asked for a lump sum payment like this at the end then its partly their fault to.

[sulphurdunn]

10. If there was ever a vicious and cynical scam

run on desperate and frightened people this is it. Also, the bank mouthpiece merely claimed that the victims knew the risk but did not claim that the bank had made a full verbal disclosure of that risk. They are not the same thing. Even if they were told what choice did they have if they wanted to keep their homes? Were they not entitled to assume that the bank was entering into the contract in good faith? This lowers the bar for disgusting even by banking standards.

[FreakinDJ]

5. GOP is back in town - what did you expect

They only pulled this shit in the first place because the GOP deregulated banking and then the "High Functioning Moron" declared the "Ownership Society".

You have got to remember, just like the "Energy Crisis in California" this is a well orchestrated robbery the RATpubliCONs, if not complicit are at least accomplices through their inaction

[Big Picture]

6. FrekinDJ

Yes because if the democrats retained control then this would have never happened? Insert Sarcasm.

I am SO freakin' mad. Our problems will not end just by getting all republicans out and all democrats in. Wake Up People. Look at the state of NJ in which I reside. Before Christie, a state completely controlled by democratic influence...was there less corruption? less waste? happy people enjoying the fruits of a progressive system? No, methinks it was more the opposite.

STOP looking at the D/R label and vote with your minds for people with integrity. If they prove to fail, try someone else.

[FreakinDJ]

7. The argument of "Left or Right politics is merely anesthesia for the masses"

actually I couldn't agree with you more

Some are just a little more "Ballsy" then the others as they allow the Wealthy Elite and Corporations to siphon off the wealth of the American Middle Class

[sarcasmo]

9. The whole left right thing being used against the general public, causing average citizens

to vote for wedge issues against there best interests.

[FreakinDJ]

12. DING DING DING - We have a Winner Folks

[molly77]

8. Big Picture

You are so right. Until we do not allow ourselves to be divided , we will have corrupt govt.The far right and far left agree on more than they do with their core parties.

Matt Taibbi reports in Rolling Stones that tea partiers are fed up with g bush and the republican party. I guess the reason we don't hear that from other MSM sources is Matt goes out and interviews people.

Well, there are quite a few of us who are fed up with the democratic party and Obama's administration and policies too. If TPTB want him reelected , they better stop stocking his administration with old clinton retreads.And allow him to actually govern.

[salin]

11. Except, of course, that these practices of the "trial" modifications leading to

reports of deliquency have been going on for several years - long before the GOP came back to town.

The anger should be both at legislators who eased banking regs - but even more at the banks who *WE* bailed out who were simultaneously screwing our peers with this horrible practice.

[FreakinDJ]

14. Dragging their feet for years - but all of a sudden 3/4 Million Foreclosures

That certainly is a BIG Jump in foreclosures and all of them participating in a Federally sponsored Loan Modification Program.

[girl gone mad]

27. The Obama adiministration created this program.

When confronted by bloggers about its failures, Geithner said by their measures, the modification program was an enormous success.

Why?

Because it has helped the banks appear better capitalized.

http://dailybail.com/home/geithner-makes-shocking-hamp-admission-federal-loan-modifica.html

[sulphurdunn]

13. What good is government

that will not defend its own people from financial criminals? Why are we spending billions of dollars and thousands of hours scanning and patting people down in airports when banks are permitted to legally mug them? It has become self-evident to me that American banks are a far greater threat to national security than foreign terrorists.

[annm4peace]

15. If more borrowers fought back they system would have to change

if more people joined groups fighting back it would change. Refuse to leave your home. Go back in when evicted. have protests in front of banks w. other people facing foreclosures.
call your elected officials, call the ceo of the banks. tell the sheriff to stop serving evictions till banks bargin in good faith.

the people must stand together to fight back against the big money and big power of banks. There is more of us than them.

[TicketyBoo]

24. Been there.

You can't refuse a lawful eviction; the cops will haul you off to jail for trespassing.

(I guess, if you don't mind a criminal record, you would at least have a roof over your head.)

[GiveMeFreedom]

16. Yea? same thing happened to me,

Fuck Bank of America.

[Fire1]

19. Ditto! LOL!! n/t

[oldlib]

17. I am waiting for BOFA

to approve my final loan agreement modification. I sent my signed agreement on January 17 and have not had a reply, with the new payment coupons. They have a policy of delay and keeping people uncertain.

[Fire1]

18. There are alot of class action suits going around as a

result of unscrupulous practices by banks. Ocwen Bank is one of them and their case has been settled. This same scenario pissed me off and prompted my call to HUD to find out why my bank was taking almost two years to make a decision that was supposed to be made in THREE months! When HUD got involved I got my answer a week later and they sold the mortgage to another bank. The new lender took six months and I finally got a permanent modification.

edit for spell check.

[Autumn]

20. I thought this program was created as

part of the stimulus? It's a shame it's not helping people.

[subterranean]

23. It IS helping people -- the people at the Bank of America and the Goldman Sachs.

They've turned the program on its head. Instead of helping homeowners, they're using it to increase their own profits. Rather than just foreclose on the house, they tell the homeowners they're eligible to apply for a loan modification. They drag out this process for as long as they can so the homeowners will keep paying the smaller monthly payments. Finally, they tell the homeowners the modification has not been approved after all, and demand late fees and a big lump-sum payment (because they haven't been making their full payments). THEN they foreclose on the house.

It is a scam, but in the deregulated world of finance, nothing is unethical if the bank can profit from it.

[Autumn]

25. It's a shame this wasn't taken care of under the bank"reform"

It's been a problem for quite a while now.

[glinda]

28. We were actually called by our bank and offered a loan mod. There was a long form

which we decided was too complicated and a short form which would get us about $68 off per month on our payments. We did the short form but my husband commented that he didn't know we had qualified for one in the first place. I hope this didn't affect us in any way. Now I am nervous. They sold our mortgage but sent papers and a letter confirming supposedly that everything was okay as far as our mortgage being good and traceable.Or so we think..

[EFerrari]

32. Banks used it as a honeypot.

I was trying to explain this scam to Thom about a year ago and I don't think he believed me, lol, because all the stories weren't out yet.

[1American]

21. GOP--YOU LIE!

GOP--Greedy Old Pricks--Don't give a rat's rectum for the middle class...they adore the multimillionairs and have proven it.

[Bluebear]

29. This modification program was an Obama creation, actually.

[kickysnana]

22. This article is a week old

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=160x41316

[Bluebear]

30. Oh, has everyone gotten their loans modified in the past week?

:)

[kickysnana]

33. self delete

[upi402]

26. The rule of law is so toast here

Egytian corruption aint got nuthin

[0rganism]

31. when a person robs a bank, s/he may go to jail

when a bank robs a person, it can collect additional late payment fees

sounds fair to me, i don't see what all the fuss is about :shrug:

(:sarcasm: <- do i really need this? yea...)

[Bluebear]

34. +