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Congress Critical of HAMP During Testimony By Treasury and Mortgage Lenders

December 9, 2009

As Garden Grove loan modification attorneys, we already knew that the federal mortgage aid program continues to fall short despite repeated government tweaks and stern lectures to lenders. That's why we were pleased to see an article in the Washington Post Dec. 9 reporting that many Congresspeople also seem frustrated by the program's failures. The House Financial Services Committee heard testimony Dec. 8 from officials at the Treasury Department, which manages the Home Affordable Modification Program, as well as from the mortgage industry. That testimony confirmed the poor record that HAMP has had throughout its seven months, with just 680,000 borrowers out of an eligible four million participating.

The testimony focused on converting trial loan modifications to permanent ones -- a growing issue in recent months. Banks told Congress that conversions are slow because about 70% of borrowers have failed to provide paperwork necessary for the conversion; have provided contradictory information; or haven't made their payments. However, consumers and their advocates said banks continue to lose paperwork and give them a runaround, shifting them from one representative to another throughout the process. Banks themselves acknowledged that "ineffective communications with customers [and] shortcomings in document maintenance" were contributing to the problem, along with customer confusion and in some cases, financial stress. Committee member Rep. Al Green, D-Texas, threatened "drastic action" if banks don't do more to stop the continuing foreclosure crisis.

As Chino loan modification lawyers, we have substantial experience with the obstacles homeowners face when they try to get loan modifications, or make those modifications permanent. In both cases, we have heard similar stories from homeowners about repeatedly lost paperwork, contradictory instructions and poor communications between branches of the same lender. We don't doubt that some borrowers have genuinely failed to follow instructions -- but we suspect that in many other cases, lenders are finding ways to delay or derail the process because foreclosing is more profitable. Media reports are not clear on what action the representatives are threatening to take, and what standards lenders must meet to avoid it, but we hope they pass legislation with penalties for lenders that are clearly not trying. It has become clear that carrots are not working with lenders; Congress should consider a few sticks.

Based in Anaheim, Howard Law LLP represents borrowers throughout California who need help obtaining a loan modification. We have had substantial success winning loan modifications in the past, through aggressive negotiations or, when appropriate, lawsuits over unfair and illegal behavior by the lender. We attribute part of our success to the fact that we are Temple City loan modification attorneys, because banks know that we understand our clients' legal rights and aren't afraid to defend them. Often, lenders change their attitudes drastically after we become involved, even with clients who had no luck winning a loan modification on their own. Our goal is always to leave clients with a monthly mortgage payment reduced to a manageable, sustainable amount.

If you're struggling to get a loan modification from a lender that can't seem to keep its records and policies straight, you should call Howard Law for help. To learn more at a free, confidential consultation, you can call us toll-free at 1-800-872-5925 or contact us online.