by Brian Mahany
Publicly, the big banks have sung of their own praise and tell the world of what a wonderful job they are doing to keep people in their homes. Just ask around and see if you can find many people that have actually received a permanent mortgage modification, however. Back in September we wrote about what Bank of America said to one of our clients seeking a mortgage modification, “There is no HAMP, there is no help and there is no hope.” It seems like JPMorgan Chase is following the same footsteps.
For those not familiar with HAMP, the acronym stands for the Home Affordable Modification Program. It was rolled out by the Treasury Department in 2008 as part of the larger federal stimulus package. That law, the Emergency Economic Stabilization Act of 2008, which gave billions to Wall Street and big banks, did set aside something for struggling homeowners unable to keep up on mortgage payments. Congress wanted to “maximize assistance for homeowners” and to “minimize foreclosures.” $50 billion was set aside to induce lenders to lower interest rates or monthly payments.
On paper, the program seems ideal. In reality, however, the program was and continues to be a disaster. Some homeowners who are down on their luck simply can’t make any payments. For them, a modification just isn’t going to work. For many, however, a small reduction or reprieve may make the difference in allowing a family to remain in their home.
Lenders are supposed to offer modifications to borrowers who qualify. Often those modifications require the homeowner to supply documentation to establish eligibility for the program and then to make a few trial payments to insure that they can make the minimum payments necessary to avoid foreclosure. As we noted above, the intended practice is far different from reality, however.
Recently we obtained a copy of a declaration from a case involving Chase. That declaration was filed in federal court and was made by a former loss mitigation specialist and later, a junior underwriter who worked at J.P. Morgan Chase from 2006 through 2010. According to her sworn statement, she handled some 10,000 mortgage modification requests from struggling homeowners desperately trying to save their homes.
I can editorialize but her words are better than anything I could ever write. This is what she had to say:
“During my employment at Chase I handled well over 10,000 calls from borrowers seeking loan modifications. As far as I know, very few actually received the permanent loan modifications they sought – …
“Employees in the Rancho Bernardo office commonly joked that a document shredder was connected to the fax machine. This joke was common because borrower documents were consistently lost, misplaced or destroyed by Chase. In fact, under Chase policy, for a while documents sent via fax were shredded if not retrieved within 24 hours, and often they were shredded without notice.
“Chase was committed to delaying, obstructing and preventing permanent loan modifications for its borrowers… Employees were instructed to deceive borrowers in discussing loan modification applications… Management at Chase instructed employees to tell borrowers that their loan modifications were still “in process” even when they were actually dead or hopeless… Chase erected an army of procedural barriers and red tape to obstruct and delay loan mods, making a successful permanent loan mod very difficult… The company’s ‘ferris wheel’ system was used to delay, obstruct and reject loan modification applications.”
Getting the picture? This blog post rarely scratches the surface of the evidence uncovered against Chase and some of the other large lenders. As we have said repeatedly, the so-called banks that are “too big to fail” are also “too big to care.”
Federal and state law is unfortunately inconsistent when it comes to suing a bank or mortgage company for an improperly denied loan modification including HAMP modification. Homeowners in Illinois, Indiana and Wisconsin can clearly sue and courts are permitting suits in othe jurisdictions as well.
The key to winning a suit for a wrongful HAMP or modification denial is to act quickly and document everything. Your journal of how many times you sent requested documents and what you were told often makes the difference in being successful.
Our firm represents homeowners with claims against banks and lenders. We are not foreclosure defense lawyers (unless very close to one of our offices) but we do represent homeowners nationwide when they wish to sue their lender. If you believe you have been improperly locked out, denied a modification or have been abused by a lender or loan servicing company, contact us. We may be able to help.
All inquiries are kept in strict confidence. For more information contact attorney Anthony Dietz at We prefer emails but in an emergency you can contact attorney Brian Mahany at (414) 704-6731. Please note that in most emergencies we can only refer to the local bar association lawyer referral service. If you are facing an immediate foreclosure sale we cannot help you.
Mahany & Ert – Giving Homeowners A Voice. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine & Minneapolis, Minnesota. Legal services available in many jurisdictions.