Tuesday, June 29, 2010

The Federal Mortgage Modification Program: Not Working

An interesting article, as I log onto Huffington Post late in the day, about the fact that perhaps thousands of homeowners with serious mortgage challenges were denied mortgage modifications after the Obama administration put its mortgage program into effect.

The HuffPo article reports,

Mortgage servicers failed to comply with basic guidelines, used different criteria to evaluate borrowers, recorded error rates up to six times their established thresholds, and couldn't provide evidence that potentially eligible homeowners had been solicited for the administration's Home Affordable Modification Program, also known as HAMP.

As I've noted on this blog, due to unfortunate circumstances I've recounted previously here, Steve and I have ended up with a second house we don't need and can't sell in Florida.  The value of that house has dropped by some $90,000.  The mortgage is now upside down.  

We have tried twice to obtain a mortgage modification with Bank of America.  In both cases, a local banker who is outstanding has tried to assist us, and she put us in touch with another Bank of America banker in Virginia who was also very helpful.

Both times, our application for a modification was turned down.  In both cases, we submitted and resubmitted notarized paperwork, which the bank and its various for-hire mortgage folks told us they couldn't find and hadn't received.  Fortunately, we had kept copies, including copies showing we sent our packet of information by second-day delivery with a return receipt requested by the date it was due.

The second application process was particularly ludicrous.  We were called repeatedly for weeks by people who had been hired to do pieces of the verification process, who asked the same questions we'd answered in our paperwork and had answered in other calls.  We spent hours on the phone providing information we'd already submitted on notarized forms.

There were times when I suspected that it mattered--that it mattered intently--that we were a same-sex couple applying together for this mortgage modification.  Some of those low in the chain of command working to verify information were in Florida, perhaps because the mortgage in question is in Florida.  Several made remarks or asked leading questions about our living situation.

The process of applying for a mortgage modification--twice, and twice with the end result of having our application denied--was frustrating and time-consuming.  And it was made far worse by the lack of professionalism and expertise of some of those whom Bank of America had hired to work on the modification.

The Obama mortgage modification program is not achieving what we were told it was designed to do.  And the way in which big banks are handling requests made under the mortgage modification program is a huge part of the problem.