Federal Mortgage Program Isn’t Helping the People Who Need it the Most

Many homeowners were hopeful earlier this year when the President announced the Making Home Affordable program. A key part of the $75 million Making Home Affordable plan was a loan-modification program that compensated lenders for lowering the mortgage payments of borrowers who were making less money because of the recession. The government offered banks and borrowers bonuses for making loan modifications work. Most of the big lenders agreed to participate.

A record 5.4 million people are behind on their mortgage payments. Thus far, only 240,000 people have received loan modifications through the program.

So what’s the problem? The lenders are the problem.

Many lenders were required to offer a trial period with lower payments if the mortgage was backed by Freddie or Fannie.  However, once the trial periods were over, they did not give the homeowner a permanent modification.

Other lenders are revoking modifications! Some housing counselors in Arizona speculate that it is more profitable for lenders to foreclose on homes rather than modify the loans.

Despite federal incentives for lenders to modify loans, they would rather foreclose on your home than negotiate to keep you in the home.

What really makes me angry about the mortgage mess? The lenders screwed the American people when they closed these loans. I’ve seen it in the loan audits I’ve done. If you don’t think you were screwed, get a loan audit and see what gets uncovered. Every file I’ve audited has problems!

Next, the American taxpayers wrote these lenders a BIG check under the TARP (Troubled Asset Relief Program, a/k/a “bailout”) to prevent them from collapsing. 

As I’ve mentioned in another post, now that these lenders’ bottom lines are shored up with your taxpayer dollars, they don’t have an incentive to work with homeowners. They’ll just take your house.

Wake up America! This is happening before your eyes, and it’s time to fight back! 

Call your congressmen, senators, governors and the President’s office and pressure them to do more to save your homes. Get a loan audit to look for predatory lending patterns with your loan and use those findings to force the banks to negotiate with you if you want to save your home.

Don’t wait for the government to bail you out — take action on your own behalf!

Related posts:

1. Mortgage Aid Program Helping Few Borrowers Check out Christine Springer of Desert Edge Legal Services & Foreclosure Industry.com, on Fox news discussing the failure of the...
2. The Truth About Why More People Aren’t Getting Loan Modifications Finally, people are starting to tell the truth about why lenders aren’t doing more to help homeowners. In a previous...
3. Bring Back the Judicial Cramdown Option A new statistic out last week by bank regulators shows that 50% of people who obtain mortgage modifications eventually default...
4. Short Sale Program Announced by the US Treasury (“HAFA”) This program, known as “HAFA” is basically the Treasury’s effort to get more short sales approved. Michael Hirschtick forwarded the...
5. “Trial Period” Loan Modifications are Just Another Scam I’ve been hearing rumblings lately about how many people are easily getting into “trial period” loan modifications and the occasional...
6. The Other Reason You Didn’t Get Approved for a Loan Mod: the Pooling and Service Agreement Have you attempted to get a loan modification under the government’s Home Affordable Modification Program (“HAMP”) but been turned down?...
7. Foreclosures Are More Profitable Than Loan Modifications? The Washington Post printed an article today stating that in many cases, it’s more profitable for the lender to foreclose...