Tag Archives: Government

The Ugly Truth behind Loan Modification Programs

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.

Help

My friend and animal rescue colleague Janice was evacuated tonight, the fire has spread into her neighborhood across from the Huachucas. I have three of her dogs and she’s coming with more. Two of the dogs are fosters.

I was going to do a separate post on these two small dogs, but now that they’re here at my house, here’s the story. A man had cancer. He was at home and very sick. He begged his wife to keep his two small dogs, which she did…until THE DAY he went into hospice. Then she dumped them just as fast as she could. Bitch. They are two small five-year-old chihuahua mixes, sweet and loving. We don’t want to separate them as they are best friends—they eat, sleep and play together. I introduced them to all my dogs and after the usual initial doggie who-the-hell-are-you meet and greet, everybody’s doing fine. They have no interest in my many cats. They need to be neutered, we just haven’t had time.

The cat pictures are of Gracie, the cat left behind at a foreclosed home we rescued in May (see Foster Cat of the Week). Gracie was a bag of bones when I got her, now she is healthy, has been spayed and is ready to go. She is extremely loving, wants to be in your lap, and purrs a lot. She picks fights with my other cats but she loves dogs. Border Animal Rescue paid for the spay and has had to lower the adoption fees for both cats and dogs—cats $30, dogs $50. There are just too many. All animals are fixed and given rabies shots before adoption.

9500 acres burned so far in the Monument fire, still raging. 40 homes damaged or destroyed. Power down. Evacuations continue. Today I worked in Old Bisbee and saw tiny pieces of ash floating everywhere in the air, 25 miles away. High winds today and tomorrow make the fire spread faster and hinder the slurry helicopters and the crews. There are tears and anger here. Where are the troops? Where’s the money? Fires, tornadoes, floods—where is the help for America in her time of need? In the Mideast. I am numb with rage.

Please see my last three posts for many more pictures of the Monument fire.

Monument Fire Update June 18th: 20,000 acres burned, 50 homes destroyed, 12,000 people evacuated. Wind gusts of 50-60 mph today. Extremely dangerous conditions for the firefighters and pilots. It’s also very, very hot. Chaos, anger, tears here. At least now the papers are admitting it’s “human caused.” It will never go any further than this.

There’s an article in local news source called “Impact on Wild Animals Affected by Fire” but there’s NO WAY I can read it.

Sun trying to shine through smoke from Monument fire over Bisbee 6-16-11.

Smoke from Monument fire, picture taken on Naco Highway near my house 6-16-11.

Two loving 5-year-old male chihuahua mixes need home. Chico on left, Coco on right. They both get along very well with dogs and cats. Coco is the darker one.

Two loving male chihuahua mixes up for adoption. They are very interactive with each other and with their humans.

Two chihuahua mixes need home. Funny, curious, playful. There have been a few grumbles, but everybody’s doing really well for the first night. I just made everybody go-lie-down so the two new ones can have some freedom to explore without being followed around. Jasmine would prefer to bite their little heads off, but she will do no such thing. In a few days she’ll accept them, for now, I watch her and she knows it. It’s time for me to step up to the fostering, altering, and adoption of these dogs, Janice has major stress right now.

Two male chihuahua mixes need home. Coco left, Chico right. Southern Arizona.

Two chihuahua mixes need home. Coco left, Chico right.

Gracie, two year old female tabby rescued from foreclosed house needs home. Spayed and very loving. Likes dogs, but not cats.

Gracie, two year old spayed female tabby up for adoption. Rescued from foreclosed home. VERY loving. Southern Arizona.

Gracie, two year old spayed female tabby needs home. Very loving. Likes dogs, not cats. Southern Arizona.

This Could be You

Eddie with his dog Willie

As our economy collapses around us, homelessness rises. We have a higher rate of homelessness in Arizona because of the weather. Old, young, disabled, veterans, mentally ill, and entire families are living on the streets.

People are dumping their animals in alarming numbers in this depression, yet homeless people manage to hang on to their dogs. I met this man today resting in the shade behind a building while his friend was going through a nearby dumpster. Every dumpster behind every supermarket has foragers who depend on them for their lives.

This man’s name is Eddie. I walked up to him and asked him how he was doing. OK, he said. I asked him if $5 was a fair trade for a photo of him and his dog, whose name is Willie Nelson. Sure, he said. I asked him if he had enough to eat. Sometimes. I asked him where he slept. Behind Walmart. I asked him if there were a group of them who sleep there. Yes. I spoke to him for a few more minutes and snapped a few pictures. I pet his beautiful dog and asked if the dog got enough to eat. Yeah, he said, Willie eats before I do.

I thanked him and shook his hand and wished him luck. I kissed Willie Nelson on the head and once again felt disgust for our government. A billion here, a billion there. Foreign aid packages, oil wars, bailouts. But keep cutting programs that keep our people alive, because who gives a shit about us spoiled, greedy Americans going into foreclosure and moving into our new homes behind Walmart. Fuck you, US government, all of you.