The Making Home Affordable Act passed in 2009 and the Home Affordable Modification Program, otherwise known as HAMP, has been full of problems since then. While this option is meant to help prevent foreclosure, in many cases it may just be easier and more cost effective for a homeowner to declare bankruptcy. Read on to learn about mistakes commonly made, and then to learn more about your options, contact The Law Offices of Paul Y. Lee at 951-755-1000 for a free consultation.
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Mistaking a loan servicer for a lender
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Believing that their loan servicer must modify their loan
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Not knowing who has power and who doesn’t
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Not filling the forms out correctly
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Assuming that bankruptcy isn’t the answer
This is an incredibly common error: Not understanding that the loan servicer isn’t the same thing as the lender. Think of it like this: just like a property manager takes care of a property for an owner, a loan servicer handles the loan for a lender. They send payment invoices to the person that owns the home, they take money on behalf of the lender, and they distribute the funds. As an example, Bank of America is often a loan servicer and is much less frequently actually the lender.
If a homeowner’s mortgage is insured by Freddie Mac or Fannie Mae, then the loan is government sponsored and the loan servicer much review the loan per the MHA HAMP program. However, the vast majority of loans aren’t government sponsored and the loan servicer is not required to modify the loan.
It comes up all the time: A person calls a bank and assumes that the person who answers the phone has any kind of authority. The reality is that in most cases, the person who answers the phone is simply a customer service or accounts person. If you’re dealing with a serious matter then it’s recommend you ask for a supervisor and ask for all info in writing.
One person who reviewed applications that were denied by the servicer found that more than 99% of them weren’t filled out correctly. In some cases the application wasn’t 100% filled out, while in others the information provided wasn’t consistent with the documents provided. In order to get a good income, it’s important to take these documents seriously and to fill them out completely.
At The Law Offices of Paul Y. Lee, we’re familiar with a wide range of myths about bankruptcy that our clients believe. For example, they may believe that they’ll automatically lose their home, or that they’ll never again be eligible for a car loan. If you’re in over your head and are considering a loan modification, you owe it to yourself to at least contact The Law Offices of Paul Y. Lee to find out about your options. We offer free consultations for California clients and can help you make the most informed decision about how to move forward.
