Homeowners Often Rejected Under Obama's Loan Plan

[Bluebear]

WASHINGTON - Ten months after the Obama administration began pressing lenders to do more to prevent foreclosures, many struggling homeowners are holding up their end of the bargain but still find themselves rejected, and some are even having their homes sold out from under them without notice.

These borrowers, rich and poor, completed trial modifications of their distressed mortgage, and made all the payments, only to learn, often indirectly, that they won't get help after all.

How many is hard to tell. Lenders participating in the administration's Home Affordable Modification Program, or HAMP, still don't provide the government with information about who's rejected and why.

To date, more than 759,000 trial loan modifications have been started, but just 31,382 have been converted to permanent new loans. That's averages out to 4 percent, far below the 75 percent conversion rate President Barack Obama has said he seeks.

In the fine print of the form homeowners fill out to apply for Obama's program, which lowers monthly payments for three months while the lender decides whether to provide permanent relief, borrowers must waive important notification rights.

This clause allows banks to reject borrowers without any written notification and move straight to auctioning off their homes without any warning.

http://www.commondreams.org/headline/2009/12/18-1

[GreenPartyVoter]

1. How could Obama sign off on something like that? Did he know they were going to pull that?

[Bluebear]

2. An excellent question. nt

[Myrina]

3. i saw a stat the other day on CNN (grain of salt)

... that 39% of homeowners with "modified" mortgages are already in default. Of course the news-reader clucked in disapproval.

What they didn't discuss is the specifics of those lovely "modifications". I went thru the entire process w/ Citi, having lost my job in Feb. In June I took a new job, paying about $6k/yr less than I was making.

Citi "modified" my mortgage which reduced my payments by $60 a month. Then they refigured my escrow UP $30 a month, which means for all the grief and BS and PR about "helping homeowners" and TARP money that Pandit and pals are rolling in, its saving me $30 freaking dollars a month. Not even a blip on anyone's radar.

Wonder how many other families are in the same situation.

[Bluebear]

6. I am sorry for what you are going through.

Me too, with Bank of America, nee Countrywide.

[Bluebear]

7. /

[leveymg]

4. So instead of getting no more money after a foreclosure notice, the banksters get 3 more payments.

Good deal for the bank. No wonder there are so few permanent modifications granted.

[Bluebear]

5. Quite a break for us peons, eh?

[Bluebear]

8. for the evening