According to a recent survey conducted by the Government Accountability Office (GAO), more than 75% of housing counselors who responded stated that American homeowners have had either “negative”, or even “very negative” experiences in dealing with the Home Affordable Modification Program (HAMP.)
The GOA survey attracted 500 responses in October 2010, with approximately one hundred and thirty housing agencies surveyed. Of all the counselors who participated in the survey, only a measly nine percent said that borrowers had shared positive experiences in relation to HAMP. A statistic of that nature is of course hardly reassuring or comforting.
The Treasury Department has raised some concerns with regard to the time difference between the release of the survey and present HAMP performance figures. However, it has conceded that at least some of the problems that counselors have highlighted continue to persist. Almost 50% of all counselors who communicated with the GAO shared that they were receiving information that was often confusing and inconsistent.
Lengthy processing time – The HAMP program is severely undermined due to lengthy processing times. This is an issue that over 30% of the counselors complained about. It is stated in the HAMP guidelines that lenders must inform homeowners inside of 30 days whether or not they have been approved for a trial home loan modification. It’s a nice sentiment, but in reality, over 85% of the counselors have reported that this time period is proving to be closer to 4-7 months, and even longer in certain cases.
Loan mod documentation vanishing – Then there is the ‘little’ issue of loan modification documentation simply vanishing into the great unknown. In addition, many homeowners have reported what appears to be a deliberate move on the part of their lenders to keep them in the dark and to provide them with precious little clarifying and empowering information.
Miscalculations – As if all of this wasn’t bad enough, there is also the increasing problem of miscalculations. When the GAO went about producing the survey, just less than one million American homeowners had been denied access to a HAMP trial. That number has steadily risen to 1.3 million as of February of this year. The primary cause of borrowers being rejected is the fact that their home loan payments are already less than 31% of their total monthly earnings. Over 50% of the surveyed borrowers said that loan modification applications were denied because lenders allegedly calculated the homeowner’s monthly earnings incorrectly.
It was reported by counselors that lenders made mistakes when calculating self-employment earnings, that they used the earnings of one or more non-borrower (as opposed to a cosigner) in doing their calculations, and that they even included income generated from temporary sources such as unemployment and other benefit platforms.
Single point of contact - While the Treasury has instituted changes subsequent to the release of the GAO survey such as insisting that homeowners be provided with a single point of contact, and setting up an online loan modification calculator, counselors are insisting that not enough has been done.
Litton Loan Serving, a company owned by Goldman Sachs, has been accused of superficially sweeping through modification applications in an attempt to work through existing backlogs. Well over half the counselors who were surveyed said that it was crucial that the Treasury enforce sanctions against lenders who fail to perform well under the HAMP program. The GAO stated in June of 2010 that the Treasury had still not taken steps to clarify and formalize the consequences lenders would face who were not in compliance with the program.
Is it just me, or is all of this just starting to sound all too monotonous? Homeowners continue to be at the mercy of sharks and unlawful institutions, it seems. This is why Caal (mycaal.com) represents such as important cog in the wheel of home loan modification. Someone needs to provide struggling homeowners with unbiased and empathetic assistance. At Caal we are committed to doing exactly that.
About Carla Ghosn
|I am CEO and Founder of Caal (mycaal.com) keen on helping American homeowners save their home, save their dream. If you need help with your loan modification, visit www.mycaal.com to see how Caal assists you in pre-qualifying your loan for approval, as well as preparing and printing your loan modification package online.|