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Mr.Chernoff, what about the fact that people like this were purposely targeted by unscrupulous mortgage brokers who repeatedly approached her to serially refinance her home because "housing prices were going to continue to increase every year forever". Of course the mortgage broker was doing this in order to churn these mortgages in order to repeatedly "earn" commisions for themselves. I guess that isn't a problem for you Mr.Chernoff, because people were "letting" themselves to be put into bad mortgages. Even though people were fraudulently induced to purchase a mortgage based upon the erroneus assuption that housing prices wouldcontinue to appreciate at an unsustainable rate.These borrowers were then led to believe they were purchasing something entirely different than what was represented to them. But Mr.Chernoff apparently still feels it is completely the borrowers fault.
Mr.Chernoff, what about the fact that Investment banks (such as Washington Mutual) could not keep up with investors appetitie for Mortgage Backed Securities, and that the directive was given to mortgage brokers and bank branches to get as many new loan applications as possible, regardless of a person's ability to repay.
These mortgage brokers were even bribed to get the borrower to agree to a higher interest rate than what they qualifed for. This bribe is what is known as a Yeild Spread Premium (YSP). Take a close look at the documents that you received at closing (specifically the HUD-1 statement), if you see the notation YSP, most likely were were the victim of "up-selling" by the mortgage broker.
Mortgage brokers and banks did not care if the borrower could ever actually repay the obligation because these Investment banks would only be liable for a borrower default for about as much time as it took for the borrowers signature to dry, as the mortgage was immediately sold (or securitized )to investors of mortgage backed securities.It is the investors who were the parties ultimately saddled with the enivitable mortgage defaults.
Mr. Chenoff, the "bank" does not even own the mortgage. It is part of a securitized trust who does not legally own the mortgage either.
Mr.Chernoff, the only real loser here is America, as we as a Nation were defrauded under the greatest fraud ever perpetrated upon our country..
I have many clients call my office to explain that they are eligible for the Home Affordable Mortgage Program (HAMP). It definitely is not the program that was sold to America that would help thousands of Americans. What it was (and I believe was designed for) is a stop gap measure to help stop the panic over the short term. I am looking for any success stories, as I have yet to hear of any. If you have received a successful FINAL modification under the HAMP plan, i'd like to hear your story. Please contact me at russ45esq@gmail.com
The National Consumer Law Center has released a report explaining how mortgage servicers are compensated
Why Servicers Foreclose When They Should Modify and Other Puzzles of Servicer Behavior
The basic format of the HAMP plan, is that you must jump through hoops providing the lender with everything but a blood sample. The borrwer is then put on a three month trial payment plan (that usually is less than their regular mortgage payment).
The borrower is then told that they must maintain these trial payments for these three months, in order to potentially qualify for the final modification. Reading the HAMP modification application documents carefully you will see that it is completely up to the mortgage servicer to approve the final modification (as the servicer is the Investor's lap dog).
I have many clients currently in this process. When the three month trial period expires, they are told to continue making these payments for two more months, because the servicer is finalizing the details of the final modification with the investor.
Many clients complain to me that when they try to contact their mortgage servicer (whom they mistakenly believe is their lender), they either cannot ever speak to a live person on the phone, or in the alternative even if they can speak to a live person on a regular basis, the information about the process seems to change with every call. I can personally attest to the problems contacting and dealing with mortgage servicers, because many is the day that I spend 3 hours on hold, only to end up talking to someone that had the intelligence of a radish.
I have one client that was approved and received the final modification, and not suprisingly the trial payment (which was affordable to the client) jumped significantly under the final modification monthly payment, which is now beyond the client's ability to pay.
It is my theory that none of the HAMP modifications will be approved in any meaningful way for borrowers to be able to afford their mortgage payments.
Much of the reason for this is that Mortgage Servicers are the tail wagging the dog. Servicers recieve huge fees for servicing mortgages in foreclosure, and they do not want to abandon this gravy trian.The securitized trust place the servicer and the trustee out in the public to field inquiries and do the dirty work, somewhat akin to the great OZ hiding behind the green curtain in the great emerald city. Additionally, evidence seems to be pointing to the fact that many of these securitized trusts have mortgage guarantee insurance that pays the trustin the event of borrwer default. So even though the trust has been paid,the servicer stillforecloses,andquitepossibly is keeping any proceeds from the foreclosure auctions.
I predict this is going to become a significanty serious political issue for President Obama in the coming months. (Caveat I am an independent voter and I am not placing blame on the President)
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