According to a recent posting on Bloomberg, Richard Neiman, the New York State superintendent of banks stated that mortgage companies make the loan modification problem worse because they actually lose paperwork. The California Reinvestment Coalition found in a survey they conducted of 40 counselors that represent around 14,000 homeowners, these counselors all said servicers had either ignored or even lost loan modification paperwork.
Regarding loan modification paperwork being lost, Joe Ridout, a spokesperson for Consumer Action, an advocacy and education group based in San Francisco said, “It’s more common to hear that banks have lost paperwork than to hear that they received it and properly handled it”.
This sloppy and uncaring practice leaves HAMP participants open to the foreclosure nightmare, which has been further scrutinized by allegations of ‘robo- signing’. ‘Robo-signing’ is a process which mortgage companies signed and submitted court documents to justify the seizures of homes without verifying these documents were properly compiled and accurate.
Loan Modification To Lower Mortgage Payments
A HAMP loan modification is designed to lower mortgage payments to 31 percent of a borrower’s monthly gross income. This loan modification process often ends up in a bigger mortgage as accrued interest and additional charges are added onto the balance. Some HAMP loan modifications even add balloon payments to the loan that are must be paid when a house is sold or the mortgage paid off.
Loan Modification Programs Performing – Really?
According to a phone interview the loan modification program, Andrea Risotto, a spokesperson for the Treasure said, “The program continues to perform well,” she also stated “The target of affordability that HAMP put in place – this idea of 31 percent debt to income — which was far more aggressive than what was done historically, is helping homeowners sustain the modification over time,” but this does not take into consideration the many people that report having been put into foreclosure as a result of this HAMP process, discussed in other articles on this site and other sites.
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Thinking About A Loan Modification – BE AWARE!