Unmodified: "Making Home Affordable" Program Fails to Address Foreclosure Crisis
Irene Florez: Making Home Affordable is a key part of the Obama Administration's effort to help homeowners avoid foreclosure. If you are struggling with your monthly mortgage payments or if you have already missed a payment, now is the time to take action and apply for HAMP the Home Affordable Modification Program (HAMP). But what if taking action means butting up against a system that repeatedly loses your paperwork and often starts the foreclosure process without your knowing it?
She remembers the details of every letter with a lover’s compulsion. Flipping through the faxes, call logs and notices in her amassed document binders she looks up somberly almost reciting the circumstances. This is the story of one woman, a single mother, who is facing foreclosure.
For the last three years, Ana Romero has wrestled with the largest behemoth banks, waging the kind of drawn out David and Goliath battle that leaves insomnia, hypertension and lachrymose reflection in its wake.
When Romero purchased her San Francisco home seven years ago the monthly payments were reasonably covered by her two income household. Divorce changed all that. With only one income since 2008 Romero has not been able to meet her monthly payments.
Ana Romero: I am with the bank for two years already. trying to work with. But they don’t want to work. I am with foreclosure. And send again papers, but they don’t want to help. I have three children. I have my mom with me.
Jose Rodriguez: Her’s is a peculiar case.
Florez: Jose Rodriguez, foreclosure prevention HUD counselor for the Mission Economic Development Agency.
Rodriguez: She is a fighter. peculiar in the case. That she’s not accepting one two or three denials. She is still in it to do it. She is selling Salvadorean food on the side. on her days off. She is already a full time employee. And she is actually taking the initiative on the day off to document what her profits and losses are to increase her income to show the bank that she is trying within all of her means to save that home to have the income to afford a new modified payment
Florez: According to housing counselor surveys carried out by the California Reinvestment Coalition, counselors report that servicers frequently lose documents and that Latinos are often denied modifications due to incomplete requests -- possibly resulting from lost documents and answers filled in Spanish. Most borrowers of color, they report, experience worse loan modification outcomes than white borrowers.
Kevin Stein: My name is Kevin Stein and I’m the Associate Director at CRC (CA reinvestment Coalition). We’ve tried to look at what’s happening in CA in a couple of diff ways and just as we believe and found that people of color and neighborhoods of color have been disproportionally impacted by bad lending and also by foreclosure that it also may also be the case that people of color hare having a harder time getting loan modifications than the public at large which is a sad statement because people generally are having a hard time getting loan modifications.
One of the main reasons why people don’t get modifications according to the data is that the borrower who is seeking help doesn’t submitting all of the paperwork.
This is very hard to reconcile. On our end we hear from from all of the consumers and all of their advocates who are frustrated by having to resubmit documents five, six, ten times because servicers have lost their information, or they’ve taken so long to act on the info that it is outdated and they need new information.
When we look further in that category Latino borrowers were more likely to have that be the reason cited for not getting a loan modification. It’s particularly frustrating because we know that communities where people’s first language is not English were targeted for a lot of the bad loans.
So it seems that you know, it wasn’t a problem for lenders to make bad loans to someone who didn’t speak English. And now were concerned that for some reason it’s hard to restructure the loans for people whose primary language is not English. So that’s something that, and with all of this we need more information.
In some of the areas, African American borrowers were a little more likely to be denied loans for the reason that they they withdrew. That they no longer wanted to get the HAMP modification. And that’s also curious. As to why somebody would be struggling to keep their home, apply for loan mod throughthe HAMP program and then decide that they didn’t want it after all.
Florez: Romero’s loan modification application has been lost several times by her servicer. She now logs every phone call and keeps documentation binders close by to reference dates and correspondence. A teacher who has been with the San Francisco School District for twenty-two years, Romero fears becoming one of the 800,000 California homes expected to foreclose by 2012.
Romero: In El Salvador I was a teacher for 5 years. And here in SF with the school district like 22 years. Two years ago I called the bank and asked them that I need help. If they can help me to modify my loan. And, they say to send the papers, to file the forms. I send the forms. And I asked them if the forms are complete and they said yes. Then I called back and they said no, we don’t have all the forms. And what i did was Is I sent the form, what they asked me. And they still said no I didn’t receive. Then I got the whole package again. And send it. Then I when called back they said no the forms are not here. What fax did you send it? Then I give them the fax number. Oh no that is not the fax. Send it to this fax. I sent it to that fax and to the previous one too. And I called and they said the have all the package.
Later I called again. And they said not it’s missing papers. And then...
Rodriguez: She’s on her fourth denial so far. We’re actually giving it a shot again.
Romero:... fax number. You have to send it to this fax number. I send the forms to the three fax numbers again...
The sale date was April 25th. But, I’m working with MEDA. And then they sent the forms. And They told him the papers were complete. But then they called me, when I called them, how the papers are doing? Oh it’s missing this paper. And I don’t know. They postponed the sale date for June 10th.
… but I.. I’m looking for... I need help. I don’t want to lose my house. I have three children. My mom is 90 years old and she is disabled. I have my sister. She is trying to help me too. I worked so hard for my house. I sold my house in El Salvador to save this house. And now I not going to have a house here or there. All i’m asking for is to modify my loan. It’s easy. They can adjust and help people stay in their house.
Florez: With an adjustable rate mortgage whose interest rate is expected to increase this year, Romero has launched a Salvadorian food business to demonstrate alternative income sources and works closely with housing counselors.
She also makes regular calls to her servicer.
Stein: The problem with the HAMP program is not the rules of the HAMP program it’s the enforcement of the rules. They reason we are in the situation we are in now is because there’s been no entity that’s been able to effectively make the loan servicers do what they are supposed to be doing, what they said they would do.
And when they failed to do it there seems to be no one there to tell them there are some consequences for them not following the rules. You would hope that the Treasury department would say, hey you are violating the terms of the contract. But there not really doing that. If you look at, again, the terms of the HAMP program, are pretty good. The HAMP program has made it so that loan modifications which used to look like anything. You know there could be a huge range in terms of what the terms of loan modifications looked like. Now they’re fairly consistent. And they take into account people’s income. And there is some certainty and uniformity around what those are. And we think it’s moved the industry in a good direction.
The HAMP modifications are generally better. They are likely to last longer. They perform better. There’s now enough redefault better. People can look at the HAMP modifications and see are they performing? Are people falling behind even on their modifications. And the redefault rates for the HAMP modications are lower. They are much lower than what they used to be a few years ago before HAMP. With HAMP modifications the borrowers can’t be require to bring money to the servicers But if the servicer convinces you to say, no, you don’t want the HAMP modification and you’ll take their modifcation, they can say oh by the way you need to bring a few thousand dollars to the table. That’s not good for consumers.
Lois Tano: Ana Romero and I, she’s my team partner. We plan all the field trips for the children. we plan activities for the children, artwork.
My name is Lois Tano, I'm a teacher at Bryant Child Development Center. Why would the bank want to put her into foreclosure. When she’s willing to stay there and pay her rent. Why would they want to go through the problem of trying to sell her home. And it seems like the banks help those they want to help.
She’s not even sure who is holding her mortgage papers right now. She’s been trying to find out. When they told her that another bank was holding them, she went to that bank and they said no they didn’t have her mortgage payments. She wants to work it out with somebody. She can’t find the right person to work it out with. It makes me said to think what might happen to her.
California's Fight Against Foreclosures Goes National