Consumer Law

Bank of America Mortgage Modifications Vs. HAMP Modifications

By M. Stan Herring

Our friend Denise Richardson of givemebackmycredit.com has posted an article about one homeowner's successful fight against the system to get a mortgage modification that will benefit her for many years to come.

Maria of Lexington, Kentucky says that she finally obtained a mortgage modification under the government's Home Affordable Modification Program (HAMP) plan after battling for over a year with Bank of America. Her HAMP modification starts with 2% interest and tops out at 4.75% during years 8 to 32. The payment plan is for a long time period, but the modification has lessened the payment to an amount that is affordable on her income.

She was almost "duped" into signing a modification contract with Bank of America that would lower her interest rate from 6.75% to 4.75%. This sounds like a good thing, but when you add on fees and the escrow in the principal, her actual monthly payment only decreased $1 from the original amount, which is basically useless.

It took Maria 18 months to actually get the B of A contract physically in her hands and the instructions were for her to sign and return it within 11 days with a check for the December 1st payment.

I had already made November's trial modification payment, was this to be December 1st payment? They didn't indicate how it was to be credited, plus November's payment had not been credited to the contract balance.

Panic.. 10 days to read all the new terms and legalize. After reviewing, as best as I could, I had four basic questions I needed answers to. Oh no, not the Alice and Wonderland phone torture test again! Got to. Three and a half hours later, transferred from one department to another, disconnections, out-right misinformation, and threats of foreclosure if I did not sign and return by November 23 deadline. I had the answer to my first question, I think? For the next 5 days, I would have anywhere from 4 or 5 messages from B of A asking if I had signed and mailed their modification. What's going on?

Maria had signed up for Lexington's Community Ventures, a nonprofit, Making Home Affordable assistance program, and faxed the B of A documents to her case worker. The case worker responded a few days before the deadline stating that B o A's modification "didn't look like" HAMP. 48 hours before the deadline, another B of A package showed up only this time it clearly showed that it was legitimately a HAMP modification.

"With all kinds of RED flags waving and fast, fast pressure, I guess I should have realized sooner that this was some kind of scam, but still, Bank of America?

I believe that Bank of America has completely and utterly spat on Obama's Making Home Affordable program with total disregard for the spirit (if not the legal) design to help home owners in distress. Next time they need a taxpayer bailout....let them suffer the consequences of their own greedy business decisions."

If you would like more information on foreclosures, please check out our articles The Three Stages Of Foreclosure In Alabama and Wrongful Foreclosures In Alabama.

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Full post as published by Alabama Consumer Blog on December 04, 2010 (boomark / email).