21 Dec No Modification For You !
Trying to modify your mortgage and getting frustrated? You may recall the “Soup Nazi” episode from the hit television series Seinfeld. In the video, the Soup Nazi can be seen taking away soup from George because George cannot seem to follow the proper protocol.
I like to compare the Soup Nazito the mortgage companies who are supposed to be helping homeowners modify their mortgages under the HAMP ( Home Affordable Modification Program). The two scenarios are remarkably similar.
The video goes something like this. George and Jerry get in line for soup, and they get their money ready. They move cautiously through the line and then when George asks for bread, the soup is taken away.
“No Soup for you!” says the Soup Nazi.
What can be more important to a homeowner who is at risk of losing their home? Nothing.
So what does our Government do? Nothing.
They could have made modification easy, supervised by U.S. Federal Judges and watched over in a court with attorneys who were ready to protect the interests of both the mortgage companies, and the home owners. How? In Chapter 13 bankruptcy court – where judges can modify any kind of loan except for a residential mortgage.
We once again leave the mortgage companies in charge of the process of modification. Which means the homeowner is at the mercy of the mortgage companies to help them through the process.
If I heard it once, I have heard it a thousand times.
- “Every time I speak with the mortgage company, I get a different person who tells me something different.” or
- “I sent in my paperwork three times because they couldn’t find it.” or
- ” I sent in my paperwork only to be told that it was late, and that program was no longer open.”
The ultimate conclusion is: “No Modification for You!”
The reality is that very few homeowners have been helped by the HAMP program. The Obama Administration’s goal was that 75% of mortgages would be modified. I doubt that we are at 5% of mortgages being modified under the program. All one has to do is go on-line and do a quick search. I don’t care what your search terms are. You will find exactly what I am speaking about.
Homeowners are going through the motions, filling out application after application, sending in document after document only to be told, we cannot locate your paperwork. Please re-submit the application and supporting documentation. It seems that a homeowner has to submit the paperwork at least three times before it “shows up in the system.”
There is a difference between a trial modification and a permanent modification. I don’t think the President set a goal for 75% trial modifications only to have those people lose their homes. I’m sure the President could not have anticipated how the mortgage companies would distort the program and create more stress in the homeowners lives.
So for now, most homeowners are being told: “No Modification for You!”
If Congress would change the bankruptcy laws and allow modifications of first mortgages on homesteads in the bankruptcy courts, this problem would quickly resolve itself. Homeowners would be on equal footing with the mortgage companies, and a Judge would have to approve the modifications.
This may seem onerous; however, the Bankruptcy Courts and Judges deal with similar issues each and every day in the Bankruptcy Courts and they are ready and able to deal with it – right now. They do it now with every kind of loan except for residential mortgages!
But until the laws change, they can’t modify residential mortgages. Maybe one day they will. Then we wouldn’t have to worry about the Mortgage Nazi’s saying: “No Modification for You!”
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