Wednesday, December 16, 2009

Obama HAM program failure

In a report out last week, the number of final modifications completed by the major banks under the main Obama HAM program are ridiculous. Some 31,382 homeowners have entered into final modifications through the end of November under that specific program. That is out of millions of eligible homeowners, of which 759,000 have entered into trial plans. Here is a breakdown:

According to the report, through the end of November, J.P. Morgan Chase & Co. /quotes/comstock/13*!jpm/quotes/nls/jpm (JPM 41.32, +0.46, +1.13%) has 143,027 three-month trial modifications started under the program. It has made 4,302 modifications permanent. Wells Fargo Bank /quotes/comstock/13*!wfc/quotes/nls/wfc (WFC 25.81, +0.15, +0.57%) has 104,808 trial modifications started and 3,537 permanent modifications using the program.

But Bank of America Corp. /quotes/comstock/13*!bac/quotes/nls/bac (BAC 15.31, +0.12, +0.79%) has started 158,462 three month trial modifications with the program and has made just 98 permanent. Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 3.47, -0.09, -2.53%) has started 103,478 three-month modifications under the plan. Of those only 271 have become permanent.

There are other programs that have resulted in modification for homeowners, but clearly the banks are more willing to foreclose on properties than modify loans. Most major banks have announced in the last week their intent or completion of paying back their TARP bailout money. They obviously want to be out from under public scrutiny and restrictions on payment of excessive salaries and bonuses.

The president met with 10 major bank CEO's this week to push several issues, including speeding up modifications, but we will see if it actually makes any difference.

Chris Barsness, Esq.

Monday, December 14, 2009

Loan Modifications Slow - Bankruptcy Better Option to Save Your Home

The Obama administration released figures at the end of last week indicating that only 32,000 homeowners have entered into final loan modifications under the HAM program this year. That is out of the several million homeowners that are likely eligible. These results show that lenders are slow or unwilling to finalize modifications to save homeowners. Lenders are putting homeowners in 3 month trial plans that are lasting 6 months and not leading to final modifications.

A Chapter 13 bankruptcy can result in elimination of 2nd mortgages and other debts and allowing homeowners to keep their homes. A Chapter 7 can still allow homeowners to keep their homes as well through reaffirmation agreements. The additional bonus is that the bankruptcy puts a stop on foreclosure or eviction proceedings, resulting in additional time for the banks to get their acts together and start finalizing modifications. Homeowners without this protection are relying on lenders telling them they will hold off on selling the home, but that is not a legally binding agreement. I get new clients who tell me their lender said they were working with them and not to worry, only to get an eviction notice stating their home has already been sold.

Now is the time to take action. Do not rely on a customer service rep telling you not to worry, they won't sell your house, because they will. You will never hear from that person again and they are not about to help you find a new place to live.

For a free consultation with an actual attorney and not a paralegal or assistant, call us today. 888-881-6591.

Wednesday, December 9, 2009

Obama HAM program still not effective

The following was reported by the Associated Press and reveals the lack of progress from the banks. The home is not safe until the permanent modification takes place, so there is significant risk of a trustee sale until that happens. A short sale or bankruptcy filing are alternatives to the long and unknown modification time frames and stressful postponement of trustee sales pending modification review.

Only about 10,000 homeowners have received permanent loan modifications under the Obama administration's mortgage relief plan, evidence of continuing woes for the government's effort to stem the foreclosure crisis.

That means fewer than 2 percent of the 650,000 homeowners enrolled in the program as of October had their mortgage payments permanently lowered to more affordable levels. The results spotlight the limited success lenders are having in getting borrowers through the trial period, according to an oversight panel report released Wednesday.

The Treasury Department is expected to release updated numbers through November on Thursday.

Loan Mod Delays - Trial Plans

Many homeowners have been put into what the banks call trial plans or forbearance plans. They are usually setup as a 3 month trial plan under the HAMP program; however, most homeowners end up being told to keep paying months after the initial 3 months. Remember that banks are under no obligation to provide final loan modifications. They may be doing certain unfair business practices, fraud, or other misdeeds in their interactions with you, but without taking them to court, homeowners will have no real way to put any pressure on the lender or servicing company.

Often times a bankruptcy filing is also another way to save the home and put pressure on the lender to work something out; however, the legislation that would have given judges the power to force modifications was defeated this last summer, so they don't have cram down powers at this point.

Our office can review your situation to determine if you have enough evidence to support filing a lawsuit against the lender or servicing company or if a bankruptcy filing would benefit you and help save your home.

Contact us to have a consultation with a licensed attorney.