Category: Loan modification

Chase loan modification nightmare featured on PBS News Hour

The PBS News Hour included a segment on loan modification programs tonight and their story featured a couple that has been struggling through what many people have reported is Chase’s impossible loan modification process.

SARAH PORTER-BRAUN: We’re at this now 16 months here. And our eligibility has not even been determined.

PAUL SOLMAN: Sarah and Lee Braun applied to their servicer, Chase, for a HAMP modification when Sarah was laid off, Lee’s hours cut back.

LEE BRAUN, homeowner: The first person who was assigned to our case wouldn’t return our phone calls. And, since that time, we have had nine different representatives. And you try to contact them, you don’t hear back from them. You call the general number, you find out you have been reassigned to somebody else.

PAUL SOLMAN: From the get-go, the Brauns documented their efforts, some would say compulsively.

SARAH PORTER-BRAUN: There’s been countless numbers of time, which he has well-documented, where we have been told you’re denied because you have not provided the documents requested, when in fact we have never received a request.

PAUL SOLMAN: Meanwhile, the Brauns now make the mortgage with the help of family.

Interestingly enough, out of character with how Chase (and other banks) usually react when the media gets involved in someones case, despite being aware that the News Hour was reporting on the Braun’s case specifically, Chase still denied their loan modification.

Loan modification nightmare in detail

There are of course no shortage of stories of frustrating ineptitude on Chase’s part for people attempting to get a loan modification.  This one in particular is so good because it is so detailed.  The more detail about your experience you document the better.  If this were happening to me, I wouldn’t stop with posting this on sites like the Ripoff Report, but would be filing a complaint with the BBB, sending a copy of this to all my elected officials, file a complaint with Chase’s regulators, and contacting my local newspaper and TV consumer advocates.  Unfortunately banks like Chase have a pretty strong lobbying effort; it takes a lot of complaints being made public to counteract that.

1.  We were told that we are the perfect candidates to receive this so called “loan modification”  (and still are)

2.  We started the proceedings after my husband had lost his job in 2009 and we had several unexpected medical conditions pop up

3.  I started a new business in 2008 and it is just getting off of the ground

4.  We had never missed a house payment prior to applying for the modification

5   We never missed a house payment during the proceedings of the loan modification “trial period” in which they lowered our house payment by about 1k per month.

6.  In October of 2009 We went online and downloaded the application, filled it out in it’s entirety, which took 15 hours of our time to gather and fax.

7.  We had to keep calling to try and get answers on what was happening with the modification, because they would not call us.  However their debt collectors called continually.

8.  We were never able to get a hold of someone who spoke proper, understandable ENGLISH, and could never get a hold of the same person twice… it was literally like pulling teeth to get any answers.

9.  When we finally were able to speak to someone in ENGLISH, they said we were still missing some papers (which we weren’t, because there was a check list and I am meticulous when it comes to files and paperwork) and they told us we would have to start from the beginning and re-fax everything again.  This time we had to re gather current data, so it took another 10 hours of our time and some of the application papers had changed, so we had to redo everything and fax again

10   Another month goes by and we phone Chase and again they claim missing paperwork, due to the fact that the people receiving the faxes are in another state and that they may have lost the papers during transmission….so this time I told them to send me an overnight package and I will send a copy via FedEX.

11.  All along the way they were reassuring us that we were perfect candidates for the modification, giving us hope that things would be fine and the paperwork time was worth it.  I have several letters they sent us telling us how much they wanted to “help us”.

12.  In June of 2010 they sent us a letter stating that our loan modification was “Denied” BECAUSE WE HAD NEVER MISSED A HOUSE PAYMENT AND THEY SAID WE MADE TOO MUCH MONEY IN 2008. HOWEVER… THEY SHOULD HAVE BEEN GOING BY OUR 2009 RETURNS!!!  and that we were now in default of a past due amount of the 1k for each month of the “trial period”

13.  At this point we decided to put some money into trying to sell our home and hired a listing agent, while still making our house payment.

Read more …

Three years and still no loan modification

How screwed up is this?

I called Chase and they said they would not talk to me until I was 2-months late on my payment. So I became 2-mos late. So over the last 2.8 years or so, I have done trial payments 3-times. Each time, Chase has reneged and decided to start the entire process over again. I have tried NACA, to no avail. I have written my congress people etc. to no avail. I have dealt with the executive offices several times and they have made permanent modifications (I have letters to the effect) yet the right hand of Chase does not know what the left is doing and even though I have letters and documents saying my loan is complete and final, they refuse to acknowledge that and continue to send threatening letters of foreclosure.

CA Democrats ask US Attorney General to investigage loan modifications

This is our 900’th post!

It looks like the big banks are starting to take some heat for making the loan modification process so (intentionally?) difficult.

California Democrats call for investigation into loan modification and foreclosure practices

October 5, 2010 |  3:42 pm

California’s Democratic congressional delegation has joined the call for investigations into delays and possible irregularities in the loan modification and foreclosure process.

In a letter Wednesday signed by the California representatives and Speaker of the House Nancy Pelosi, the delegation said that constituents who have requested loan modifications or a forbearance of foreclosure have reported lenders “routinely fail to respond in a timely manner, misplace requested documents, and send mixed signals about the requirements that need to be met to avoid foreclosures.”

The letter — which was addressed to U.S. Atty. Gen. Eric Holder, Federal Reserve Chairman Ben S. Bernanke and John Walsh, acting comptroller for the Office of the Comptroller of the Currency at the Treasury Department — asks the agencies to “investigate possible violations of law.”

The action follows several recent announcements by some of the nation’s biggest lenders that they were halting evictions and some foreclosure proceedings due to possible mistakes in their processes. But these freezes are taking place outside of California in so-called judicial foreclosure states, where courts have jurisdiction over the process.

Nevertheless, the California delegation cited the recent foreclosure pauses in their letter, saying the moves by the lenders “amplify our concerns that systematic problems exist in the ways many financial institutions have dealt with homeowners who are seeking to avoid foreclosures.”

A New Way to Cut a Mortgage (Wall Street Journal)

Some homeowners who already have refinanced into low-interest-rate mortgages are using a little-known strategy to make their monthly payments even smaller.

Called “recasting” or “re-amortizing,” the strategy allows a borrower to lower the monthly payment on an existing fixed-rate home loan for a small fee without having to apply for a new loan and without having to pay reappraisal and other fees.

Recasting also may enable homeowners to save on interest paid over the life of the loan, merely by putting a large sum of cash against the principal, whether or not they have refinanced already.

The bad news? Banks don’t advertise the strategy, perhaps because it is less lucrative than refinancing a mortgage. And not all loans are eligible. To find out more, you will have to ask your lender directly.

At J.P. Morgan Chase & Co.’s Chase Home Finance unit, less than 200 mortgages a month are recast out of 10 million home loans outstanding, a spokesman says. At Bank of America Corp., about 200 to 300 a month recasting requests are received out of about 14 million home loans serviced by the company, a spokesman says. Neither bank has seen increased demand.

Here is how it works: A homeowner asks his loan servicer if he can put a large sum of money against the outstanding principal on the mortgage. Ordinarily, doing so would enable him to pay off the loan early, but he would still have to pay the same monthly note. But if the lender agrees to recast the mortgage, he may be able to reduce the monthly payment over the remaining term of the loan.

For example, a person with a 30-year $300,000 fixed-rate mortgage and an interest rate of 4.75% who recasted one year into the loan by putting in $60,000 toward the principal would trim his balance to $235,371. Assuming there were 29 years left on the loan, that would result in a monthly payment of $1,247 instead of the original $1,565.

Recasting can be a good choice for borrowers who have cash and want to reduce monthly payments but who can’t refinance, such as those with no-documentation loans, most of whom can’t get the same types of mortgages today due to tighter regulations, even if they have high income and good credit. (Self-employed professionals often find themselves in this boat.) And at a time of low interest rates on certificates of deposit and U.S. Treasury bills, paying off a mortgage early is a relatively safe investment that brings a return at least equivalent to the interest rate on the mortgage itself.

Read the rest of the article here.

New roadmap for fighting foreclosure and getting your loan balance reduced

An excellent article in today’s Wall Street Journal spells out some of the growing tools that homeowners have to fight foreclosure and apply pressure to the people who actually own their sliced-and-diced loan to reduce their loan balance.

LOXAHATCHEE, Fla.—Israel Machado’s foreclosure started out as a routine affair. In the summer of 2008, as the economy began to soften, Mr. Machado’s pool-cleaning business suffered and like millions of other Americans, he fell behind on his $400,000 mortgage.

But Mr. Machado’s response was unlike most other Americans’. Instead of handing his home over to the lender, IndyMac Bank FSB, he hired Ice Legal LP in nearby Royal Palm Beach to fight the foreclosure. The law firm researched the history of Mr. Machado’s loan and found two interesting facts.

First, the affidavits IndyMac used to file the foreclosure were signed by a so-called robo-signer named Erica A. Johnson-Seck, who routinely signed 6,000 documents a week related to foreclosures and bankruptcy. That volume, the court decided, meant Ms. Johnson-Seck couldn’t possibly have thoroughly reviewed the facts of Mr. Machado’s case, as required by law.

Secondly, IndyMac (now called OneWest Bank) no longer owned the loan—a group of investors in a securitized trust managed by Deutsche Bank did. Determining that IndyMac didn’t really have standing to foreclose, a judge threw out the case and ordered IndyMac to pay Mr. Machado’s $30,000 legal bill.

First, if banks are no longer allowed to use robo-signers and actually have to review documents, they may avoid foreclosure as an option.  Second, they may not actually have the authority to foreclose, as evidenced by this story.  In any event, it is worth pursuing actually making the bank prove that it has done the proper research and has the right to foreclose.

Mr. Machado and his lawyer, Tom Ice, say they now want to convince the owners of the mortgage to cut Mr. Machado’s loan balance to between $150,000 and $200,000—the current selling price for comparable homes in his community near West Palm Beach. “The whole intent was to get them to come to the negotiating table, to get me in a fixed-rate mortgage that worked,” Mr. Machado said.

If it proves difficult for the bank to foreclose, reducing the loan balance so they at least get some payment may be their best choice, and having proved you aren’t going to let them foreclose without having done everything precisely right, they may simply give in.

Good luck!

Chase admits it practices parallel foreclosure

This is the first time I have seen Chase actually admit they instigate a parallel foreclosure whenever someone applies for a loan modification.  In the case of this great story from CBS 5 News in Arizona.  In this case, even though the homeowners had worked out a modification with Chase and made all required payments, Chase “accidentally” foreclosed anyways.

Do you need to be in the news to get a loan mod with Chase?

This story is so typical Chase.  Family falls on hard times, in this case because they have a gravely ill child.  Chase has initiated foreclosure proceedings in parallel with the homeowners seeking a loan modification and days before the foreclosure sale is scheduled, Chase tells them that they have been approved for a HAMP loan modification.  But, the papers never arrive and the house is sold back to Fannie Mae.

The reason this case didn’t stop there is that the Washington Post wrote a story on this particular family and their plight, and Chase decided that they would take a second look at the families situation.

For one thing, under Fannie Mae protocols (Chase just serviced the loan) the family should have been offered other modifications options.

So the publicity put pressure on both Chase and Fannie Mae and they discovered the case had not been handled properly.  The foreclosure has been reversed and the family is being offered other modification options.

Is this really the only way to get treated fairly by Chase contact the press?

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