Okay, so let’s establish three or four teensey-weensey facts about foreclosures right up front.
First of all, as we all should know by now, on February 18, 2009, when President Obama said in his speech introducing his Making Home Affordable foreclosure rescue plan, that getting a modification of a home mortgage was free and easy… that all you had to do was call the handy dandy, toll-free government phone number… or just call your bank directly… he was… um… er… well… mistaken, optimistic, full of shit, or high. Sorry about that, but come on… seriously?
Second of all, it should by now no longer be contentious to say that people need help to negotiate a loan modification with a bank or mortgage servicer. I say this because even President Obama thinks that people need help and that’s why he’s spent tens of millions funding various nonprofit agencies across the country. I also say it because to-date there have been hundreds, if not thousands of stories of servicers abusing homeowners who have tried it on their own, and because I’ve personally been contacted by thousands of homeowners who said they tried it on their own before giving up and seeking someone to help them.
Thirdly, there should be no debate about the HAMP, or Home Affordable Modification Program. It’s a prodigious failure on an Herculean scale… the contrast between its promise and what it has delivered is staggering. It’s claim to fame is that it out-performed Dubya’s Hope-4-Homeowners plan, which after six months had only modified one solitary mortgage.
As a corollary, trial modifications are the biggest loan modification scam the country has ever seen. Here’s how they work in real life: The bank tells you to make three payments of some amount that won’t reduce your indebtedness, but will be reported to the credit bureaus as delinquent payments, so that after you’ve made all three on time and as agreed, they can sell your home without notice. Most people learn of their house having sold when they come home one day to find investors standing on their front porch looking in the windows.
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