You know those newsy little notes they print at the bottom of your mortgage statement? Here’s the one that suckered me in:
Experiencing difficulty keeping up with your mortgage payments? We’re here to help! Apply now for Home Affordable Mortgage Program (HAMP) through GMAC!
Wrong. They’re not there to help. Us, that is—people who put a down payment on a small house, try to make our mortgage payments on time every month, still have decent credit, and who are having a hard time surviving.
Loan modification is a process where your lender lowers your current mortgage by extending its term or lowering your interest rate. It’s a federal program begun by the Obama administration in 2009 to “help families keep their homes.” Three months ago I applied for a loan modification through my mortgage holder, GMAC (who is backed by the Federal Home Loan Mortgage Corporation, or “Freddie Mac.”) It starts with an invasive ten-page form and copies of every possible document relating to you and your home, income, expenditures, and taxes. A “counselor” then contacted me. I fully expected to qualify under the conditions the HAMP website clearly (but falsely) explained, and she said nothing to discourage me.
A month later I got a rejection letter. I tried to talk to my “counselor,” whom I’m now certain isn’t a real person, but a robot programmed to repeat the same empty phrase over and over: we have guidelines…we have guidelines…we have guidelines. As I had already explained in my (required) cover letter, I’m experiencing loss of income due to the economy, which I thought was the point. She said the reason I didn’t qualify was because I don’t make enough money. I said, like, duh. She told me to apply again when my income went up.
Since I’m self-employed, my income fluctuates. The next month was better and I applied again, making the three-month average they want to see rise. Another month went by, and I got the same rejection letter.
Again I tried to question my “counselor,” and again she repeated her mantra: we have to stick to government guidelines. She said it over and over.
Frustrated and angry, I called a non-profit agency specifically designed to help Arizona homeowners. The woman I spoke to began asking the basics—name, address, phone, income, payment amount, etc. The aha moment struck when she asked what I owe compared to the value of my house. I don’t really know the value of my house because you can’t actually sell a house in Arizona. Certainly way less than I paid for it. But houses have a book value regardless of real life, and it turns out I have equity in my house. She explained that because of this, I would never receive help and it wasn’t even worth it to continue the interview.
The lender can’t possibly know what my neighborhood is like or the condition of my house. They only know what their tables and charts tell them and they are absolutely rigid in abiding by their computer-generated decisions.
Here’s how it works. HAMP “helps” homeowners whose homes are worth up to $729,750 but who have not paid much in. The lenders don’t want to foreclose because they would lose too much money. But they don’t care if I foreclose because they can dump my house for what I owe and they won’t lose anything, even if it takes a few years. I am the one with the most to lose, not them. The agency explained that the program isn’t really about helping homeowners, and although it does help some homeowners it is only by default, not need. It’s all about the lenders getting their money. If they foreclose on an expensive home where they have loaned the homeowner a pile of cash, they lose big time. So they grant the loan modification because they want the homeowner to keep paying. They also seem to want to deal only with people who are already a couple months behind. My “counselor” actually said to me, “but you’re still paying your mortgage.” Well that’s just the kind of person I am, excuse me for being respectable. I would do anything to get that rent paid.
So the lender has no interest in modifying my loan. It’s not about helping people, it’s about their investment. If only they had explained this up front I wouldn’t have bothered. At no point during this debacle were they honest with me. Plus, it’s nearly impossible to get through the menus to a real person and I was put on hold so many times I blew through my cellphone minutes and got a huge bill. They peddle this program as if it’s all about goodwill. It is not. It was an infuriating waste of time.
In the end they raised my mortgage payment. I went to make on payment on my property taxes and was told they had been paid by GMAC. Then they paid my full year’s homeowners insurance. Granted I have to pay these anyway, but that’s not the point. They sent me a bill for a thousand dollars and told me to pay it now or my mortgage goes up, and so it did. They have every available corporate clone with a calculator working diligently to make sure THEY get paid.
So those big inflated shells of conspicuous consumption with the Audis in the driveway that people bought when they had jobs, the ones that are four times the size the owners need but felt they deserved luxury, the ones that cost a small fortune to heat and cool and maintain—they likely qualify. They might even think they’re getting “help.”
This has been a public service announcement.