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Analysis of Treasury Data Shows Most HAMP Rejections Not Due to Payment Problems

March 9, 2011

Our San Bernardino foreclosure defense attorneys wrote last week about an interest group's determination that most HAMP rejections can be attributed to paperwork problems. So we were interested to see a Feb. 28 Wall Street Journal article that makes a similar conclusion. The newspaper used data released by the Treasury Department; it was unclear whether this was the same data used by Public Citizen's analysis. Using that data, the newspaper confirmed that HAMP has been able to help only a small number of applicants -- about one in four. The newspaper reported numerous reasons for that, but said only a small number couldn't make payments on time -- most were disqualified for paperwork problems or because the bank decided they were not eligible.

The analysis looked at 2.7 million applications -- almost half of whom, 1.3 million, were never accepted into the program. Of those 1.3 million, 266,000 were rejected because of failure to submit paperwork or the bank losing the paperwork. Banks decided another 255,000 already had affordable mortgages and didn't need loan modifications. Other groups were turned down because they had "jumbo" mortgages, or because the banks thought they were not in danger of defaulting. Of those accepted for an initial trial modification, lenders declined to make the modification permanent for 770,000. This was largely for the same reasons described above -- eligibility determinations and paperwork. Only a handful had trouble making the monthly payments, which would disqualify them for a permanent modification.

This analysis doesn't surprise our Corona foreclosure defense lawyers at all. We've worked in this field since before HAMP, so we've watched the program unfold through the news as well as our clients' experiences. What the Wall Street Journal did not report is that lenders have no accountability when they decide things like whether a mortgage is affordable or the homeowner is in danger of default. When lenders break the rules -- for example, by turning down borrowers whose income qualifies them for HAMP -- there is no accountability. Lenders are also free to repeatedly lose paperwork and then turn down frustrated borrowers by claiming they didn't provide enough paperwork. While the federal government has established limited review of this issue, the only way to appeal a bad decision or unfair treatment is to file a predatory lending lawsuit against the lender.

At Howard Law PC, that's a big part of what we do for our clients. While we prefer to resolve loan modification disputes through negotiation, we can and absolutely will file lawsuits when negotiations have failed, or to stop a foreclosure scheduled very soon. Many of our clients are people who were accepted for a trial modification and made at least three monthly payments as required, but were denied a permanent modification even though nothing about their situations has changed. Our Irvine foreclosure defense attorneys help clients enforce their right to have their applications fairly considered by lenders.

If you've fought unsuccessfully to get your loan modified, through HAMP or otherwise, and you're tired of the same bureaucratic excuses, you should call Howard Law instead. For a free, confidential evaluation of your case, send us a message online or call us toll-free at 1-800-872-5925.