The Real Deal Miami

Banks reject 72% of applicants under HAMP program

The Treasury Department's mortgage modification program has disappointed

August 09, 2015 11:01AM

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HAMP has a small impact

HAMP has had a small-scale impact.

Disabled and unable to work, Vermont home owner Lucy Circe applied for a modification to her mortgage loan from Bank of America. The bank made error after error in processing her application. Bank of America frequently asked for document copies it already had, asked Circe to prove she was no longer married to a man whom she did not know, and asked why she wanted to dispose her property, even though she had told the bank she wanted to keep it.

The experience of Ms. Circe was not unique, according to a critical report on the federal government’s Home Affordable Modification Program (HAMP).

The Obama administration estimated in 2009 that the HAMP program could help as many as four million home owners seeking a mortgage modification.

But only 887,001 borrowers are participating in the HAMP program, according to a report by Christy L. Romero, a government official who monitors the program. Romero is inspector general of the Troubled Asset Relief Program.

Participating banks have rejected 72 percent of HAMP applications. The number of rejected borrowers is four million, the same number of borrowers that the Obama administration hoped to help through HAMP.

Banks have valid reasons for some rejections. For example, 38 percent of HAMP applications are rejected because they are incomplete.

The HAMP-application rejection rate is 87 percent at CitiMortgage, part of Citibank; 84 percent at JPMorgan Chase, 80 percent at Bank of America and 60 percent at Wells Fargo, according to the report by Romero. Banks have valid reasons for many rejections. For example, 38 percent of HAMP applications are rejected because they were incomplete.

Representatives of JPMorgan Chase and Bank of America disputed the rejection rates in Romero’s report on HAMP.

A Citibank spokesman, Mike Rodgers, said the bank has made a commitment to keep troubled mortgage borrowers in their homes. He also said the bank has approved 100,000 loan modifications under HAMP, equal to half of the applications that were complete.

A spokesman for Bank of America, Rick Simon, said two-thirds of its HAMP applicants failed to qualify, but “five out of six … avoided foreclosure through either a modification or another solution.”

But Romero, the author of the report on HAMP, said high rates of application rejections indicate a problem with banks, not borrowers.

Among the design flaws of HAMP is leeway for lenders to apply their own individual procedures to the application process, which can be exceedingly slow.

Ms. Circe, the Vermont home owner, got a denial a year after she applied to Bank of America for a loan modification under the HAMP program in October 2013. The bank cited the fact that she was unemployed, even though Social Security disability insurance income and rental income on her house would be more than adequate to cover modified mortgage payments.

But Ms. Circe persisted, and finally, in April of this year, Bank of America modified her mortgage loan. Jessica Radbord, a lawyer at Burlington-based Vermont Legal Aid, helped Ms. Circe gain admission to the HAMP program through Bank of America. Radbord said she was stunned by “all these strange reasons for denials. What really bothers me is, how on earth would a homeowner ever be able to do this on their own?” [New York Times] Mike Seemuth

  • Jarvis

    Despite the fact that the nation’s courtrooms remain active crime scenes, with backdated, forged and fabricated documents still sloshing around them, state and federal regulators have not filed new charges of misconduct against Bank of America, Deutsche Bank, U.S. Bank, Green Tree, or any other mortgage industry participant, since the round of national settlements over foreclosure fraud ineffectively closed the issue.
    The BANKSTERS continue to commit fraud upon hardworking people and fraud upon the courts. The biggest Ponzi scheme the world has ever seen , where the Banksters created credit out of thin air, not for their borrowers, but for the banksters themselves via the Federal Reserve’s magic check book, with no bank account behind it. The Bankster then loaned that imaginary money to people on the security of overvalued real property with the deliberate aim of reducing the artificially raised property prices and putting people out of work.People without income cannot pay their bills, so they were guaranteed they could steal all that real property from their rightful owners. Of course you would say to yourself, that makes no sense because the Banksters would lose money when foreclosing on the security , but you’d be wrong because the banksters insured the debt with an insurance company, but just forgot to tell the borrowers that. SO they knew they could not lose. Its what you might call having your cake and eating it too. You see, just secretly insuring the debt was the way they ensured that they lost no money. First they sold investors in Wall Street on the idea of using pensions and other fund moneys to invest in the profitable housing market. Then they sold homeowners on the idea of borrowing money against their rising property values, secure in knowing that they had artificially raised those prices and knew they could reverse that trend rapidly, when the time was right. Then they found another group of investors and sold them on insuring against the unlikely risk of those secure mortgages defaulting. But, as you know, they had already insured the downside risk. So they devised a new name that no one understood called the credit default swap. These were not insurance policies regulated by the states, but were unregulated securities sold on wall street to investors. So, once they got the business of insurance outside of the regulatory realm, it was no holds barred and they sold the same investment to up to 20 different groups in respect of every mortgage pool they pretended to create in the securitized mortgage scam.But people need to lose the mindset of someone who has been brainwashed by the garbage put out by government at state and federal level and echoed in the corporate owned media.
    SO therefore, The banksters along side Freddie and Fannie, were and still are continuing to submit fraudulent documents to the courts in order to steal homes from homeowners. They and their substitute trustee lawyers (ie Samuel I White PC, just one of many ) are submitting FRAUDULENT papers to the courts in order to FRAUDULENTLY foreclose on homeowners across the nation. Mortgage notes with Forged Owners signatures and ta-da endorsements are being submitted to the courts in order to steal homes. Bank of america(or as they like to refer to themselves…fka countrywide) made a deal with the attorney generals to modify loans that they really had no right to modify as they were illegally acquired to begin with. They committed notary fraud, forgery, added fake endorsements and as their crimes began to come to light…………they made a deal and instead of modifications (which they LED the homeowners to believe what was happening)….they handed the fraudulent documents over to Green Tree, soon to be called DiTech..corporate criminals are notorious for changing their names after lights shine on their crimes…, among others, to foreclose. Meanwhile, homeowners are the ones who are paying the price by having their homes taken because of felonies that are being committed . Fraud upon the courts, racketeering, forgery, wire fraud, notary fraud…pathetic, nauseating, and just all around COMPLETELY disgusting. Wake up America.

    • 1dade_cty2

      Excellent writing & I can personally relate to everything you say. The courts are preyed upon by large banksters at will I believe judges know what is going on and want to do the right thing but are handcuffed by their states law making legislature/boss telling em foreclose or else find another job. Florida for example besides its Legislature has a Governor & AG that are Republican/extreme right pro business Tea Party CONTROLLED not one defendant stands a chance. Florida was #1 or #2 in new foreclosure starts in 2014 if I’m not mistaken. I have 3 cases closed
      (2 Washington Mutual/JP Morgan Chase + 1 Countrywide/ Bank of America) & are re opened at will with $50 payment by bankster attorneys to re set foreclosure sale dates, they also have expired 5 year statute of limitations, loss original notes/mortgage, robo signing/testifying, lack legal standing you name it but judges grant them summary judgements anyway, I have also appealed several times. Heck I have a case the judge granted summary judgement WITHOUT a court FILE in existence & another one the original mortgage signature is 100% forged & notarized I even paid & hired a forensic examiner to confirm it but the court would not allow my expert witness to testify. Also the deals banksters made with ex DOJ chief Holder for one or two cents on dollar are a joke, non deterrent and not ENFORCED. There is a case pending before Florida’s supreme court addressing the statute of limitation that will begin to hear open oral arguments
      October 7, 2015 Case# SC14-1265 Bartram vs US Bank. If the courts are where justice is served this country is in very serious trouble & worst of all its citizens have no clue. Take care & best of luck to you.

      • Jarvis

        The problem is the courts are not putting these proceedings before a jury because they know the jury would look at the evidence and decide against the banks who are committing criminal acts to fraudulently foreclose. It’s all very disturbing and just all around sickening. No matter what the outcome here in this world, surely, very surely they will get what they deserve eventually. That is the only thing they can truly bank on.