Obama Mortgage: A Real Life Nightmare
Comments from attorney Jeffrey O'Brien, Partner at Mansfield, Tanick & Cohen
The Obama Administration's "Making Home Affordable" program is supposed to
work like this: if you qualify for the program, your lender was to notify
you. You then submit a package of information and ultimately you are
approved for a "trial modification" where your payment is adjusted (i.e.,
reduced). Make the trial modification payment for three months and,
theoretically, you qualify for a permanent modification.
Simple enough, right? Not where the Federal government is involved.
My clients were granted a trial modification late last year. In theory,
they should have been done with their trial period in April and should have
received word on their permanent modification. Instead, in late June the
best that their lender can do is to tell them when they call that they're
approved but, for some reason, they cannot seem to send out a written
confirmation of the approval and inform my clients of what their new
mortgage payment will be.
In an effort to break the logjam, I agreed to place a call to the lender
(who happens to be one of those "too big to fail" lenders who begged
Congress for a bailout last year) to find out what was going on.
a.. Attempt #1: Lender could not talk to me yet since the authorization
form (signed by my clients granting the lender permission to talk to me) was
only received that day; I was told to call back after 48 hours.
Surprisingly, the day after my call, my clients received a call saying that
their matter had been forwarded on for final review, which we all naively
assumed meant that my one call had spurred the lender into action (silly us
for thinking that).
b.. Attempt #2: It took the representative at least ten minutes to confirm
that I had an authorization on file; thereafter, I was told that the reason
that my clients had not yet received written notification of their approval
for permanent modification was due to a computer glitch which they assured
me had been fixed as I was on the phone with them (what a coincidence,
right?) At the end of the call, I was told that the written notification
was being sent out immediately.
c.. Attempt #3: A full three days after the alleged written notification
was sent, my clients still had not received any word and asked if I would
call again. This time, after being on hold for twenty minutes, I was told
that my authorization - a form that I have used for years and which has been
accepted by every lender imaginable, including this particular lender on
other matters - was not in the proper form. The problem? My contact
information was on a fax cover sheet and not on the actual authorization. I
was told to resubmit my authorization with the contact information on the
same page and call back in 48 hours. Funny how we've come full circle in
just three phone calls.
The only thing I can surmise from the runaround given to homeowners by their
lenders under the MHA program is, not surprisingly, that the lenders do not
want to modify any mortgages, that they would prefer a short sale or
foreclosure where they will be paid as much as possible sooner rather than
later. To that end, it is my further conclusion that the endless delays are
all part of the plan to make these modifications and the program promoting
them fail miserably.
My point in writing this firsthand account of how this program works - or
should I say, does not work - is to point out that the Making Home
Affordable program has nothing to do with providing actual assistance to
homeowners and everything to do with making elected officials appear as if
they're doing something to deal with the problem.