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Busted for bad loan mods

By Polyana da Costa · Bankrate.com
Thursday, June 9, 2011
Posted: 2 pm ET

If you're one of the many homeowners who have gone through the frustrating experience of trying to work with your lender to get a loan modification, this may serve as a bit of consolation.

The U.S. Treasury says it is withholding incentive payments owed to the three of largest servicers participating in the Home Affordable Modification Program until they get their act together and improve their handling of HAMP applications. The three servicers are Bank of America, JPMorgan Chase and Wells Fargo.

Like others participating in HAMP, they had been receiving at least $1,000 from the government for each loan modified under the program.

The announcement resulted from a performance assessment of the 10 largest servicers participating in HAMP, released Thursday. The government periodically publishes survey results related to HAMP, but for the first time, it has published a detailed report grading the servicers in specific areas.

The results come as no surprise for borrowers who have long complained about servicers losing their paperwork, miscalculating numbers or denying them a permanent modification after they made all the payments required under the trial modification period.

The three servicers failed to pass the test when it came to calculating borrowers' income to determine their eligibility. The government considers a 5 percent error benchmark acceptable. But Chase incorrectly calculated borrowers' income to determine HAMP eligibility in 31 percent of the cases; Bank of America, 22 percent and Well Fargo, 27 percent.

Here are some of the other categories assessed and how each lender performed.

  • Missing modification status report: Bank of America failed in 19.1 percent of the cases in this category. Wells and Chase fared better here with 0.7 percent and 1.3 percent, respectively.
  • Average calendar days to resolve escalated cases (HAMP sets a target of 30 days): Bank of America took on average 58 days; Chase, 55 days and Wells, 31 days.
  • Conversion rate for trials started after June 1, 2010: Bank of America had 54 percent of trial modification converted to permanent, Chase had 57 percent and Wells had 65 percent.

According to report, Bank of America, Chase and Wells need to make "substantial improvement," to their HAMP modification process.

I asked the servicers if they would like to say something about the results.

Wells Fargo says it's "formally disputing this new report with the U.S. Treasury. It paints an unfairly negative picture of our modification efforts and contradicts previous written assessments shared with us by the Treasury."

A Wells spokeswoman says the report is based on data from August of 2010, rather than the first quarter of this year, as indicated in the report, and does not reflect recent improvements the bank made to its process.

Bank of America says it is "committed to continually improving our processes to assist distressed homeowners through HAMP and proprietary mortgage modification programs. … We acknowledge improvements must be made in key areas. …We have made great progress in several key performance areas and, in the first quarter, Bank of America was responsible for one of every four modifications completed under HAMP. We believe future reviews will confirm that progress."

Chase says "the bank respectfully disagrees with the assessment. We have made significant improvements since the modifications that Treasury reviewed and continue to work hard to keep improving our processes and controls."

Here's the report. Have fun!

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9 Comments
robert
July 26, 2011 at 2:15 am

im asking for help to save my home i had a modification 2010 but for only a 50 dollar lesser i neen another modification from bank of america am disable now some days i cannot get out of the bed i would to know where is my money i paid to countrywide home loan?

DJ
July 23, 2011 at 6:07 pm

IM HAVING PROBLEMS WITH GMAC ,I HAVENT PAID MY MORG IN A YEAR BECAUSE I WAS WAITING ON MY DENIAL OF A LOAN MODIFICATION I HAD TO CALL THEM AND STILL NO ANSWER. SO AS OF JUNE WERE DOING THE 3 MONTH PAYMENT PLAN AGAIN , BUT WHAT THEY ARE DOING IS RUINING OUR CREDIT SCORE ,BECAUSE WHILE UR WAITING ON A MODIFICATION AND THEY DON'T ACCEPT UR PAYMENT UNTIL ALL PAPER WORK IS DONE THEY R REPORTIN THAT UR LATE ON PAYMENTS . SOME ONE PLEASE HELP ME IM FRESH OUT FO FREE MONEY TO GIVE TO GMAC AND GET NOWHERE BUT ADDITION OF YEARS ADDED TO MY LOAN SOME ONE PLEASE HELP!!

WANDA KINZELER
July 05, 2011 at 10:59 am

PLEASE GOOGLE REST REPORT AND CALL THEM...THEY CAN TELL YOU IF YOU QUALIFY FOR HAMP LOAN MOD AND DO REPORT , YOU CAN GIVE LENDER. IF YOU LIVE IN CA THEY CAN PROCESS THE LOAN MOD, FOR YOU, SINCE THEY ARE ATTORNEY'S UR CHANCE IS PROBABLY 99% HIGHER OF GETTING IT WITH THEM, VS ON YOUR OWN. IF U LIVE ELSEWHERE PERHAPS GET HAMP REPORT DONE AND GIVE IT TO UR LENDER ALONG W LOAN MOD OR HIRE ATTORNEY TO SEND IT IN. MAY GOD HELP YOU.

Fran
June 23, 2011 at 5:21 am

I was F!!!ed by Bank Of America they promised me a modification and started it in Oct of 2010 I did the three month trial of for oct, nov, and dec after that I stayed on top of it, I even filled out the MHA paperwork they claimed they could not find it I faxed it twice and so they finally ask me to sign something stating if I opted out of MHA they would give me 2% for so many year and then 3% for so many years and then lock me in at 4.??% for 40years.. yes 40 years... so I agreed and signed it.. well nothing never happened they never gave me an amount to pay I would call almost daily and ask how much to pay the same person stated don't pay anything yet in the mean time I was not in escrow, so the same person called and stated I think we found a buyer, however he wants you Ins and taxes in escrow do you agree to that and I said yes if it means of a modification by all means yes... so they put me in escrow well I had already changed homeowners ins, since the one I had went up on me because I had filed a claim for damage to my roof they put it as normal wear and denied the claim and then sent me a letter and stated if I dont' replace my roof in a certain time frame they will cancel, so I canceled them and had already started and paid for another ins company and let BOA know this gave them the new ins number and all, but they paid the old one the full amount...so I had to cancel the new and stay with the old..they were also late on paying my property taxes which made for late fees and penaties in the mean time I am still hearing we are going to find you a buyer for the loan this went on for six months well in June of 2011 he turned my loan over to another person two days later I got a call from that person and stated we cannot find a buyer and now want 8012.?? or we will start forclosure on July the 6th, well I couldn't afford an attorney I go to legal aide and they dont' have the staff to take the case, however they say you do have one... So I bet, borrow and get the money up and pay BOA...to keep my house.. and this is the second time the did something like this to me the first one was when they first bought the mortgage from County Wide.. They did some lowering of the interest rate as they told me and suppose to have taken off some principal well my prinicpal then was 140,??? then and they suppose to have taken off 8,??? well now it is 143,??? the math just does not add up... they need to be taken to justice by someone... they have really messed up peoples lives...
I am filing reports with the Att. Generals office and see if that does any good which I know it want but it will help my peace of mind...

Fernando Vasquez
June 21, 2011 at 5:10 pm

I have been dealing with Wachovia for the past two years for loan modification, on my first modification they denied becasue i did not meet the requirement of the 31% ration they said my ration came down to 30% thtat was ourageous, second try I met the qualications but could not qualify because they say I was not under water which is not true I had to pay for an appraisal to let then know how inaccurate they know about the area where I live. Bottom line Wachovia now Wells Fargo are one of the worst banks of America, shame on them.

john valente
June 17, 2011 at 10:25 am

help?

john valente
June 17, 2011 at 10:24 am

turned down twice for home modif- due to not being a risk -value of the home is 270,000 amout owed bank of america 435,000!

Marilyn R Williams
June 15, 2011 at 12:28 pm

Seems to me that the only reason a bank wouldn't give a modification is because they want the property. That's what's going on with my situation. Ocwen even told me my house was worth more foreclosed than modified and they wouldn't give me a modification no matter what. Good thing the US Treasury is investigating! I was at my wits end dealing with this! No matter how much income I made, it wasn't enough and they refused to tell me how much I needed. HUD said $1400 - when my income hit $1400, Ocwen refused to accept all of it. When my income hit $1750 - Ocwen refused to accept all of it and then said I had too much equity in the property to qualify. Apparently, that is not a reason for denial. In the mean time,my payments are further and further behind...I had made on time payments for over 20 years.

Brenda Johnson
June 14, 2011 at 11:10 pm

I applied for a Modification from my Lender, Chase. They denied me twice. After finally getting someone to speak to me about each denial it turned out both times it was a clerical error on their part. However, they said once they deny a Mod the customer must reply. On the third try I did get approved, but it took about 9 months. All in all it took a year and a half for me to get the mod. It was important for me to get the mod in the first place because my financial situation was getting worse by the minute. I became disabled 5 years ago and my money was running out. It is completly out now and I am having trouble making the mortgage payment. The real estate market here is terrible and if I sold the house I would not break even and wouldn't have a place to live either. So I am pretty upset with how my Modification was handled by Chase. I'll be lucky to get to keep my house. It would have been nice if I had gotten the lower payment amount while I still had some money in the bank. It's a shame the government only bailed out the big banks and not the little guys who just need to get their homes.