CNN.com Reports Receiving “Overwhelming Number” of Negative Reviews of Obama Housing Plan
June 28, 2009
CNNMoney.com reported today that they’ve received an overwhelming number of negative reviews from nearly 500 people who wrote in about their experiences trying to obtain a loan modification through Obama’s Making Home Affordable program. Here are just a few of those complaints pulled from the CNNMoney.com list:
“Obama’s plan is a joke,” wrote Jean in Michigan. “The banks are a joke… fax, fax, fax, call, call, call and no response for months. Even Washington representatives can’t get an answer or help, what a sham!!!!”
“I have a Fannie Mae loan through Bank of America and have been fighting with Bank of America since May to work with me. They continue to indicate that I do not qualify during this phase, but yet Fannie Mae says I do. BofA has given me every possible roadblock and excuse. They are definitely doing this intentionally.”
“Litton Loan serving is the worst. I did an informal email survey recevied responses from 123 people who applied for Load Modification…NOT ONE got the Modification. All were lied to and dragged along for weeks until finally they were told they did not qualify. Who can stop this madness?”
Wow, it sounds like someone needs to report Obama’s plan to the Better Business Bureau!
“Has any one had any experience with Indy Mac Mortgage Service. We have been trying to modify a loan for over 4 months. First we get the papers saying this will be your payment, then we get a paper saying the papers have all expired, so send in new ones. then we get another modification package saying everything is under review. I really do not think the people that have been hired to work on these modification have had training they need. One Customer Service Dept. says one thing, then the other one says something completely different. This stimulus was supposed to help those who need the help to stay in their home. So if you have had any experience please let me know, I would so much appreciate it. Thanks”
Apparently,… both the Obama administration and the banking and mortgage servicing industry are finally getting some serious heat from borrowers who say their lenders and servicers are not responding to their calls, ignoring their applications and their paperwork and in general not making decisions for months on end. All the stuff that those working at firms that offer loan modification services have known about for many months or even years now.
Adding to the piling on this week, the Government Accountability Office (“GAO”) said on Thursday that the Treasury Department must improve its procedures to ensure that loan servicers are equipped and prepared to adhere to the rules before allowing them to participate in the $75 billion program.
The outcry over the plan’s shortcomings has recently become such a cacophony that the Obama administration summoned servicers to a meeting in Washington D.C. today to determine how to improve the application process and increase the volume. On August 4th, officials will release reports that detail each servicer’s progress as related to offering loan modifications under the Obama plan. And that is sure to make for some compelling reading. I personally cannot wait.
I started interviewing homeowners one year ago and started investigating loan modification firms last October. And the story was the same every time. Banks and servicers obviously did not want people to receive loan modifications… they simply did not want to give any of the money owed them back. Time and time again, I saw servicers ignore whatever they wanted to ignore, and do whatever they wanted to do.
Then last February, President Obama delivered the speech that was to introduce his housing rescue plan. I had been waiting for at least a year for that speech, and I have to say that it was one of the biggest disappointments of my life as far as presidential speeches go. That night my article’s headline read: “I’m sorry Mr. President… That’s Simply Not Enough,” which I sent all over the place, including to many in the mainstream media. The response… nothing.
I made follow-up calls to reporters… I was outraged that the new president… the man who had promised to make solving the foreclosure crisis job #1… had just rolled out a plan that had no chance whatsoever of succeeding. Basically it was the Bush plan revisited. Sure, he removed a few of the obstacles that needed to be removed, but he replaced them with new obstacles. And he was touting the incentives, $75 billion worth that were supposed to act like red meat in front of hungry lender lions.
The reporters I spoke with, however, weren’t so sure. They all said we had to wait and see. Wait and see? Why? Didn’t these people understand anything about what was happening in real life? To me it was like standing atop Niagara Falls saying that we’d have to wait and see if the water would in fact hit the rocks at the bottom.
To begin with, the servicer incentives were absurd. Offering a servicer or a lender $1,000 or $1,500 to modify a mortgage is like offering me a one-day bus pass in exchange for giving up my brand new car. Then, ignoring the fact that Fannie or Freddie did not securitize 65% of the loans originated in 2006 and 2007, the plan only applied to loans securitized by the GSEs, Fannie Mae or Freddie Mac. And, as if those restrictions weren’t enough to bring me to tears, the topper was that the original plan required homeowners to be no more than 5% underwater. That meant if your house appraised for $200,000, you couldn’t owe more than $210,000.
“Well, it’s a good thing real estate hasn’t declined in value by more than 5%,” I said to myself. “Definitely dodged a bullet there.”
Obama’s speech that fateful night meant that things were going to get much worse, economically speaking. He had done nothing to stop or even slow the foreclosure crisis, so prices would continue to fall, toxic assets on bank balance sheets would continue to increase in their degree of toxicity, and families would continue to vacillate between a state of apprehension and outright depression, as they looked around for help that simply wasn’t going to come.
And then things got even stranger when President Obama decided that no one needed to hire a firm to help them obtain a loan modification agreement from their lender. First of all, he said that you didn’t need help, you could simply call your bank directly and they would help. And secondly, if you did need help, you could call one of the nonprofit housing counselors his administration had funded. Anything else… was “a scam”.
So, I guess people did need help, but they only needed nonprofit help. It was for profit help that they did not need. Nonprofit help… yes. For profit help… not so much. Then the Attorney General said paying means it’s a scam, while the Department of Real Estate said to look for the advance fee agreement.
The contradictions just continued to mount almost as fast as the foreclosure notices, while the number of scams or those being scammed continued to remain illusive. And most recently, someone decided that it was the attorneys that are the real problem, and that’s when I started to understand just how much power the banking lobby truly possessed.
Still, I have never come close to given up on my country’s ability to eventually grasp the realities of a situation, and thank the Lord, the grasping has finally begun.
It’s about time too, because over the last month, I’ve seen countless cases of servicers violating HAMP’s rules.
Routinely, servicers turn down homeowners for being current with payments, they refuse to disclose the details of the NPV (Net Present Value) formulas that are used to determine whether a given loan should be modified, and most shocking to me, servicers are charging homeowners “loan modification fees” that start at $500 and go as high as $3,000!
Servicers charging loan modification fees? See, I had thought President Obama said that no one should ever have to pay for a loan modification. No? No kidding… I was almost positive that’s what he said.
The GAO also jumped all over the administration for not monitoring the program properly. It seems that they’re concerned that Treasury is failing to evaluate servicers’ ability to meet the plan’s requirements and guidelines. And, apparently the agency has failed to fully staff the Homeownership Preservation Office, which is supposed to be responsible for oversight of the program.
All in all, I’d say this administration is doing a darn fine imitation of the Bush Administration’s handling of Katrina, without all that nasty negative press coverage, of course.
On the only positive note, Treasury did hire Freddie Mac to review servicer performance related to the program, although no one knows what happens when servicers don’t comply. And when that’s your only positive note, you’re an incompetent boob, in my humble opinion.
The bigger picture is that reports are now surfacing that show financial institutions are not following the program’s rules in a BIG way.
When a consumer advocate testified last week at a Senate Banking Committee hearing, she said that some servicers are violating the guidelines by DEMANDING UPFRONT FEE PAYMENTS, turning down borrowers that aren’t in default, and foreclosing while borrowers have applications under review.
CNN.com reported that in response:
Senator Christopher Dodd, D-Conn., has asked the administration to look into these allegations.
OH LIKE HELL… NO. NOT ACCEPTABLE.
Not a chance… you are not slipping that by. Clearly, these servicers that are demanding up front fees are a SCAM! Clearly. Without question. I’m calling the FTC, the Attorney General, the DRE, every governor in the country… EVERYONE!
That is without a doubt THE SINGLE MOST outrageously hypocritical double standard thing I’ve EVER heard my government say and I’m going to do something about it. What am I going to do? Well, I don’t know at this moment, exactly, but stand by because I’m creative when it comes to things like this and I will let you know.
Oh Christopher… Yoo-hoo! Your Dodd-ness… Are you listening? You are a worthless piece of corrupt crapola… do you know that? I think you do… At least it’s a good thing that you weren’t given sweetheart terms on your own personal mortgage by these corrupt financial institutions… Oh wait… you were… and you knew… The showers are on, pal… it’s time for you to leave the playing field.
SERVICERS ARE DEMANDING UP FRONT FEE PAYMENTS FROM BORROWERS?!?!?!?!?
WHY? THE UNTOLD BILLIONS WE’VE GIVEN THESE PEOPLE HAVEN’T BEEN ENOUGH?
BUT, THEY’RE NOT SCAMMERS?
Let me get this straight… tell me if I have this right…
The bankers gave loans that no one could possibly understand to people that couldn’t possibly afford them, then fraudulently packaged them up with AAA ratings so they could sell them to investors all over the world, thereby destroying the bond market, while they leveraged their assets up to 300:1, thereby bankrupting their own banks… While the federal regulators and our government in general stood idly by doing nothing before, during or after the entire ordeal… and then we gave them hundreds of billions to paper over the problems asking only that they answer the phone and modify mortgages when it made sense to do so…
But it’s the attorney or mortgage expert in West Covina who’s spending months trying to stop some family from losing their home and being put on the street that’s the problem? Because that firm charges three grand before they take on a project that may take nine months to complete? They’re the scam? That’s the situation to be avoided here? Really? Really?
And I’m not supposed to swear here? Well, you know what… F#@k YOU!
And if that offended you, don’t write to me about it. Just delete me from your favorites list and move on because we will NOT get along anyway. I could describe the above set of facts to my Rabbi, if I had a Rabbi… and he’d use the exact same expletive.
I can’t take it. Not right now… I have to take a pill of some sort and go lie down. What is that damn ringing in my ears? Did someone just turn off all the lights? I think I’m losing my senses.
CNNMoney.com also reported that wonder of wonders, miracle of miracles, even President Obama has now acknowledged that the program is failing to stem the foreclosure tidal wave.
AAARRRGGGHHHHHHHHHH…. (BANG… CRASH… THUD…. UGH…)
MANDELMAN HAS LEFT THE BUILDING.