HAMP Modification Refusal with 4 Major Hardships
by Betty from New Milford, CT, Litchfield
Ask Kate why my HAMP modification is refused in spite of 4 major hardships: Kate, I am not underwater, although my home has had a significant reduction in value. But I have had four major set backs that all qualify for a hardship status. I have been in the loop of one sort of another to get a modified home loan.
I made partial payments voluntarily while going through the paperwork to make the modified loan. Bank puts funds in escrow. Now, counts all payments as late, killed my credit score, and starts foreclosure proceedings while in review for HAMP.
This process has been in the works since 2010 without ANY light at the end of the tunnel. Now, as the stress builds, I research my refinance options. But since all payments are recorded as late, I do not qualify.
The bank has no interest in providing a modification because the numbers do not work. They make at least 200K if they foreclose (all the equity that I do have left).
Is there a program for those of us who have hardship that are not underwater, who need a modified program because of a hardship?
After all these years of making my payments and paying down principle when I could, seems predatory, being now that I do have a crisis, and I do have equity, that they would want a customer like me rather than foreclosure.
I have had my income reduced by 40%, repaired the house in full after a natural disaster that my homeowner's insurance wouldn't pay for out of my savings (130K), was a victim of domestic violence that lead to divorce, and than a home robbery that stripped me of more than 71K in assets.
Thankfully, criminals finally got caught but restitution is unlikely before the bank takes the house... Now what?
I have tried everything. I have more than 100 faxes, 500 pages of supplied and resupplied documents and they tell me I can't be helped because I am not underwater. I am being treated like an irresponsible homeowner and that I want something for nothing.
At present, I can't even rent a house because my credit is destroyed, all liquid funds have been invested in house that the bank wants, all retirement funds have not recovered, sell-able assets have been stolen and my salary hasn't yet recovered to pre-2009 levels.
I have no car loans, no student loans, no credit card balances. Why can't the bank just do something?
Kate Answers: HAMP Modification Refusal with 4 Major Hardships
I don't have extremely novel suggestions for you.
But I want you to know someone is listening.
First, let's take a look at how the Making Home Affordable (MHA) website describes HAMP loan modification.
"The primary objective of HAMP is to help homeowners avoid foreclosure by modifying troubled loans to achieve a payment the homeowner can afford."
I'm pointing this out because within the basic criteria of initial HAMP eligibility
, the MHA website does not state that a mortgage must be underwater. Now there may be other reasons you are not receiving loan approval for your modification request. But according to the MHA website, owing more than the value of your home is not part of the initial eligibility criteria.
To take it a step further, if being underwater was make-it-or-break-it, why would your loan servicer draw out your modification process for more than 2 years? Seems to me, they could have easily nipped it in the bud when they discovered you still had equity in your home.
Call a Making Home Affordable Housing Counselor
Do this first. Call a Making Home Affordable housing counselor
at 888-995-HOPE. Making Home Affordable offers one-on-one assistance to homeowners and says they will follow up with mortgage servicers. Ask specifically for this help by mentioning "MHA Help" to escalate your phone call.
But get your ducks in a row before calling. Prepare a few sentences to review your hardships, your loan servicer's reasons for modification refusal, and what you'd prefer to accomplish with the mortgage.
For the most benefit, it is also recommended to gather this paperwork, the same needed for Making Home Affordable Local Community Events
so you can accurately answer the counselor's questions.
Connecticut Department of Banking
Whenever a homeowner believes treatment by a lender is predatory, they should know they have rights. Part of these rights is to consult with an attorney regarding lender practices. Complaints can also be filed on the state level by going to a state.gov website. In your case, go to ct.gov where you can contact the Connecticut Department of Banking.
Or write to the Connecticut Department of Banking:
- Consumer Credit Division
260 Constitution Plaza
Hartford, CT 06103-1800
- Or questions can be addressed to 860-240-8200.
- For complaints, call 800-831-7225.
Making Home Affordable Foreclosure Alternatives
Although not pleasant to discuss, you should know about other options offered to struggling homeowners through Making Home Affordable. Called HAFA, these foreclosure alternatives
can help with transitioning to more affordable housing while preventing the trauma of an actual foreclosure.
Please follow the above link to my descriptions and if you are interested, discuss them upon contacting the Making Home Affordable housing counselor. I hope it doesn't come down to foreclosure alternatives and that you can save your home. But I want you to know of these options.
Good luck and very best wishes,
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