BY
JUL 29, 2015 12:01am ET
The Special Inspector General for the Troubled Asset Relief Program is renewing calls for further investigation of servicers it claims may be denying too many Home Affordable Modification Program applications.
"Treasury has a small window of opportunity to figure out why so many people have been denied HAMP and to establish a zero tolerance standard for servicers who do not follow HAMP's rules," Special Inspector General Christy Romero said in a statement accompanying SIGTARP's latest quarterly report, issued Wednesday.
According to SIGTARP, 70% of homeowners who applied to lower their mortgage payment through HAMP have been denied assistance by their servicer. At some of the largest servicers, that percentage is even higher, the watchdog adds.
"There is a massive lost opportunity for an emergency program designed to help homeowners through the crisis if only 20-30% of families seeking help from HAMP actually get into HAMP," she said.
SIGTARP years ago pushed Treasury to require servicers to report why homeowners were rejectedfor HAMP, and found that servicers largely blamed it on "incomplete" applications.
It is now suggesting that the problem may lie in servicer rather than borrower inadequacies.
"Even if some people did not meet Treasury's eligibility standards, SIGTARP has repeatedly pointed out, and Treasury has found in their reviews, known problems by the largest HAMP servicers that have plagued homeowners," she said.
Examples of these include income calculation errors, lost paperwork, and improper denials, according to Romero.
HAMP mods were expected to experience some stress from upward adjustments in rate set to occur this year. Re-defaults have been high, and the program also has been the target of scam artists who have fraudulently promised borrowers assistance through the program in exchange for a fee.
Comments (4)
I can vouch that SIGTARP is correct. I applied for a HAMP loan 10 times with the same lender over 3 yrs. I was told this reason and that reason. I never missed a payment. Massive drop in income. I had to move out to another region, and was told they wouldn't do second homes. One person called me a dirt bag, another told me to stop making my payments.
Finally on attempt 9 I was told I would qualify if I rented the home. I was stunned at the rent I got. It was twice what I had expected. After getting a tenant and 3 months rent, plus 3 months up front I reapply. Again this major Bank denies the loan after 5 months.
Finally on attempt 9 I was told I would qualify if I rented the home. I was stunned at the rent I got. It was twice what I had expected. After getting a tenant and 3 months rent, plus 3 months up front I reapply. Again this major Bank denies the loan after 5 months.
My awesome servicer just kept stating the following in mediation "we did not take any federal money so we do not need to offer any assistance". That's what I call a Class Act!!!
Everytime I have any kind of interaction with a rep of my servicer it turns into a boondoggle and a quagmire swamp of practiced indifference from what sounds like to me, a barely adult arrogant, rule babbling shallow, silly illiterate.
Invariably they sound less like someone genuinely interested in helping the client than a loan shark intent on taking you for whatever you're worth. I've begun a couple of talks with various reps about modifications and/or refi's but always back out or lose interest after reminding myself of the fines and penalties associated with any further investment of my time.
The number of horrendous stories online of people just trying to hold onto their houses in the face of this Machiavellian korprate tornado of personal destruction is astounding.
We (the people) need some intervention from some loftier power; if God's too busy..., the Feds will do.
Invariably they sound less like someone genuinely interested in helping the client than a loan shark intent on taking you for whatever you're worth. I've begun a couple of talks with various reps about modifications and/or refi's but always back out or lose interest after reminding myself of the fines and penalties associated with any further investment of my time.
The number of horrendous stories online of people just trying to hold onto their houses in the face of this Machiavellian korprate tornado of personal destruction is astounding.
We (the people) need some intervention from some loftier power; if God's too busy..., the Feds will do.
AMEN!
Posted by Todd K | Wednesday, July 29 2015 at 1:15PM ET
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