Perdido 03

Perdido 03

Thursday, August 12, 2010

Where's The Accountability On The Mortgage/Foreclosure Crisis?

President Accountability has vowed to hold teachers accountable like nobody else ever has.

Fair enough.

But as a teacher, I have decided to turn the tables and hold HIM accountable like few have.

Yesterday I looked at the economic mess we currently have
with unemployment wavering between 9.5%-10%, underemployment at almost 19%, GDP for Q2 now expected to be revised down to 1.2% or lower, and jobless claims rising while economic activity is falling.

For an administration that vowed to have unemployment down to 8% and the economy revving by 2010, this record they have on the economy seems like a MISERABLE failure.

Yet rather than take any of the blame upon himself, or God forbid, actually change course and do something DIFFERENT (i.e., not listen to the two buffoons who got us here - Larry Summers and Treasury Timmeh Geithner), he has doubled down on the failed strategies, blamed Bush for the continuing mess (even though he's been gone for almost two years) and when that hasn't worked, blamed teachers and schools for the economic crisis.

Today I would like to take a look at the housing foreclosure/mortgage crisis and see how he is performing there.

Here's the latest news on foreclosures:

If you're waiting for relief on the foreclosure front, keep waiting. RealtyTrac says foreclosure notices rose 4% last month, the 17th straight month filings have exceeded 300,000. And RealtyTrac's Rick Sharga tells MarketWatch News Break that foreclosures may not peak until 2011.

Foreclosures not peaking until 2011.

Foreclosures exceeding 300,000 for 17 straight months.

Hmm - that would be the entire time President Accountability has been in office.

300,000 multiplied by 17...let's see, that would equal 5,100,000 foreclosures in the time President Accountability has been in office.

Now how long has the Obama mortgage relief program been in action and how has it been faring?

Well, the plan was unveiled in March of 2009 by President Accountability himself:

PHOENIX — Seeking to tackle “a crisis unlike any we’ve ever known,” President Barack Obama unveiled an ambitious $75 billion plan Wednesday to keep as many as 9 million Americans from losing their homes to foreclosure.

Announcing the plan in Arizona — a state especially hard hit by the housing crunch — Obama said that turning around the battered economy requires stemming the continuing tide of foreclosures. The housing crisis that began last year set many other factors in motion and helped lead to the current, widening recession.

“In the end, all of us are paying a price for this home mortgage crisis,” Obama said at a high school outside Phoenix. “And all of us will pay an even steeper price if we allow this crisis to deepen.”


Obama’s plan aims to keep between 7 million and 9 million people from foreclosure. Of the nearly 52 million U.S. homeowners with a mortgage, about 13.8 million, or nearly 27 percent, owe more on their mortgage than their house is now worth, according to Moody’s

Headlining Obama’s plan is a $75 billion Homeowner Stability Initiative, which would provide a set of incentives to mortgage lenders in an effort to convince them to help up to 4 million borrowers on the verge of foreclosure. The goal: cut monthly mortgage payments to sustainable levels, defined as no more than 31 percent of a homeowners income. Funding would come from the $700 billion financial industry bailout passed by Congress last fall.

Another key component would specifically help those said to be “under water” — with dwellings whose market value have sunk below the principal still owed on the mortgages. Such mortgages have traditionally been almost impossible to refinance. But the White House said its program will help 4 million to 5 million families do just that — if their mortgages are owned or guaranteed by Fannie Mae or Freddie Mac.

OK, that was the plan. Announced in March, help 7 to 9 million people to stave off foreclosure. Sounds good.

Now how has it fared?

President Obama's plan to help the 11 million Americans whose homes are underwater isn't working, according to a new report that will be released tomorrow on Capitol Hill by the Congressional Oversight Panel. The plan called for banks to adjust mortgages for homeowners paying more for their homes than they're worth, but most aren't receiving the help they requested. Legislators are already demanding that the big banks to do more, but today, four of the nation's largest banks pushed back.

Citigroup, Bank of America, Wells Fargo, and JP Morgan questioned why they should reduce mortgages for those in over their heads. A JP Morgan representative pointed to the pricetag, saying it would cost $900 billion to help every underwater homeowner.

Middle class advocates say the banks could afford to help more Americans, whose tax dollars helped save the financial industry during the economic collapse. Advocates say no one is asking the banks to adjust every mortgage, and so far, evidence shows that banks haven't adjusted many mortgages at all.

Of the more than 1.1 million homeowners who signed up for mortgage help through the president's adjustment plan, only 170,000 have had their mortgages permanently adjusted. Experts say that's a dismal performance.

Gee - it's not working at all, is it? Just 170,000 mortgages permanently adjusted out of the 1.1 million who signed up for the program.

That's not a very good record at all.

But what happened to those who signed up for the Obama program but ultimately got no relief?

President Barack Obama's signature plan to combat the housing crisis has fallen short of its goals -- rather than significantly and permanently reducing home foreclosures, it is only delaying them.

The administration unveiled its Making Home Affordable plan in February 2009. Obama vowed in front of an audience gathered at Dobson High School in Mesa, Ariz., that MHA's signature effort, the Home Affordable Modification Program, would "enable as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure."

The $75 billion initiative -- $50 billion from the bank bailout, $25 billion from government-owned mortgage giants Fannie Mae and Freddie Mac -- was designed to induce lenders, servicers and investors to modify distressed mortgages through a series of cash incentives.

It's not working.

In its first year, 1.5 million people were invited to try HAMP. About 40 percent of those who tried it have been kicked out of the program; fewer than that have been given an actual shot at keeping their homes.

When President Obama took office, it took an average of 319 days to complete a foreclosure, according to Jacksonville, Fla.-based data provider Lender Processing Services. Now it takes 461 days.

Extending the process by which homes enter foreclosure allows banks to continue carrying the loans on their books at full value, delaying loss recognition. That allows unhealthy banks to appear healthy, staving off costly bank failures.

Oh, so it helps out the banks but not the homeowners!

I got it now.

Just another Change We Can Believe In Obama program that is corporate-friendly and corporate-approved.

But still I want to know what HAPPENS to those who enter the program, get their mortgages extended for a while but then wind up being foreclosed upon anyway?

A Year Into HAMP, 'We're Losing Our Home'

Bea and Terry Garwood applied to JPMorgan Chase for HAMP help in April 2009 and were approved for a "trial" modification that July because they met the core requirements: their house payments took up more than 31 percent of their monthly pre-tax income; they lived in their home; they owed less than $729,000; and they were at risk of default. Garwood says the HAMP trial reduced their monthly payment on their two-story home in Pinckney, Mich., by nearly $500 to about $1,175 -- a huge relief, she adds.

A HAMP trial is supposed to become "permanent" after three months, but Garwood's dragged on for nine. "They kept on saying a bank statement was missing, or one of the documentations wasn't signed, or they didn't have the affidavit, or the hardship letter," Garwood says. "And then on March 19, I received a letter saying, 'You do not qualify for a permanent modification. You now owe us $12,000.'"

Chase rejected the Garwoods for two reasons, according to the letter Garwood received: The bank claimed their monthly mortgage payment amounted to less than 31 percent of their income and they failed HAMP's opaque "Net Present Value" test, a complex Treasury Department formula that servicers use to determine if a modification will make investors more money than a foreclosure. Garwood says that Chase assumed they had an inflated income by looking at deposits to their bank account and ignoring the money paid out to the people who work for her husband, a roofing subcontractor. If Chase went by the Garwoods' tax forms, she claims, the bank would realize they make thousands of dollars less every month and the couple would qualify for a permanent modification. Chase declined to comment.

Garwood says that the difference between their reduced payments during the trial period and what they would have paid otherwise, plus late fees, is $12,000. She says they can't possibly afford it all at once but that they would have found a way to make full monthly payments if they hadn't been lured into HAMP. They stopped making payments in April, shortly after they were turned down for a permanent modification. Sheriff's sales have been set for June, July, and now August. Garwood says she thinks she may be able to continue to dodge the foreclosure for a little while longer, but she's not exactly grateful for the extra time.

"They told us we were a great candidate, so we went for it," she says. "And as a result we're losing our home."

Wow - so those folks might have actually kept their home had they NOT entered into the Obama administration's HAMP program, but since they did and since the program is so badly devised and badly run, they are LOSING their home instead.

This is an absolutely ABYSMAL record on fixing the foreclosure problem.

The Obama administration would have been better DOING NOTHING than starting the HAMP program and other administration efforts that have made matters WORSE for homeowners, though they certainly helped out the banks, especially the ones with lots of bad mortgages on their books.

Perhaps that was the point of the program in the first place?

In any case, on both the economy (unemployment, GDP) and the foreclosure problem, the Obama administration and President Accountability have been MISERABLE failures.

And yet, no accountability for the accountability-meisters in the accountability administration.

Just more jive, more lies, more excuses and of course more threats sent the way of teachers.

But accountability is coming soon.

Oh yes it is.

And if the GOP nominates somebody moderately sane in 2012 like Pawlenty, Romney or even Huckabee, President Accountability is going to be voted out of a job and be sent back to the ranch in Crawford to pick brush with Bush.


  1. How in the world can you blame the Admin when its the banks not following the HAMP directives, losing paperwork every time its sent in, lying and doing all they can to not modify (since they make more money not modifying as servicers) and then its all Obamas's fault.

    Sadly even you are buying this deception of the R's.

    What on earth is Tresury/Obama suppose to be when there is no HAMP law, no way to force banks to follow the directives and no hope due to the R's block in the Senate to make any law that can be enforced?

    The mortgage servicers have turned HAMP which is quite good if the rules were followed, into a huge money maker for the banks by sucking what little money homeowners have left before throwing them out of their homes.

    On the other hand, the banks and servicers have made an estimated $4 billion by offering struggling homeowners the false hope of a modification, collecting the trial payments for three to eight months, and inevitably foreclosing with the addition of late fees, fines, back payments, and foreclosure costs passed on to the homeowner.

    What on earth is Obama or the Treasury suppose to do that they haven't already?

    Obama/Treasury sent in the swat teams in 2009, met with the Bankers at the White House who promised to do better with HAMP. They have issued directives and more directives to make getting HAMP easier.

    What more can they do?

    It takes Congress to pass laws, not the President or Treasury.

    The banks are outright lying to deny modifications, they are doing all they can to only approve as few as possible. They repeatedly lose documents sent many times.

    At the last Congressional Oversight Committee meeting one Congresswoman talked about HER OFFICE had sent in paperwork for one citizen 4 times and the bank lost it every time.

    As a Bank of America frustrated homeowner said after told denied for not sending documents, she says, " I HAVE A COPY OF EACH OF THE 252 DOCUMENTS I HAVE SENT YOU SINCE 04/09, WHICH ONE DO YOU WANT (ANOTHER) COPY OF? "

    The banks are not following the HAMP directives, They are keeping qualified people under HAMP on endless trials and then denying without any legitimate reason.

    The servicers take no losses on foreclosure sales only make more fees. As they keep extending trials, they make more servicing fees and 100% of late fees. Then they get more fees to foreclose, own the property and sell it.

    The TAXPAYERS take the loss on about 80% of first mortgages since they are guaranteed by the GSO's.

    Banks are making tons of profits on the backs of distressed homeowners and the Republicans love it.

    Republicans are thrilled HAMP is failing and do a good job falsely blaming the Administration which is powerless to anything more than they have already tried.

    But their PR is effective. Blame all on those that can do nothing about it and they would block anything in the Senate to help the economy. It plays great for their political game of making voters upset and blame the wrong party.

    HAMP is a good program - if the directives were followed. The banks are the problem not HAMP, or the Administration which has no power to force the banks to follow the HAMP directives., which they mostly ignore.

    The Republican view is that the banks are doing a great job by kicking out homeowners who should have been renters to begin with. They want to get "qualified" people into homes. This is absurd but makes a great excuse to keep the bankers happy making their huge profits on the backs of homeowner who should qualify for HAMP if the directives were followed.

  2. Continued.....I wished we could stop mortgage companies from selling our loans to these high powered Banks. Why do we have to use these banks? Since we are paying the payment why can't we pick the bank. Why does a refinance cost so much money? The banks have already been bailed out why don't they refinance all our loans for the lowest rate and cut the amount due since our houses not worth much anymore. We bailed them out why aren't they forced to help us why do we have to ruin our credit. It makes no sense that they force people out of their homes and then have to find someone else to buy it at a lower price. Why can't they lower the price and let us stay in our homes and make our homes affordable. Like the MHA program sounds like it is going to do. I am thinking about just walking away from my home and just renting. Your thoughs and advice on a Short Sale. At this point I just want the heck away from Bank of America.

    Sorry this was so long. I just saw an advertisement for the Making Home Affordable Program on Yahoo and wanted to warn everyone to beware of this program.

    If you have decent credit there is no help for those of us who truly need the help.

    August 25, 2010 Today, I received an erroreous statement stating I owe $1, 464.99 for escrow. I went through a lengthy process back in January and qualified to have my escrow cancelled. At that point my February payment was calculated with out the escrow.

  3. October 09 I called Bank of America and only inquired never signed up. Plus I did not even qualify since I was on unemployment. A supervisor actually told me it would ruin your credit. They hold four payments as if they are late waiting to see if you even qualify.

    I had a new roof put on and had to send my insurance check in to the bank for their signature. When they did not send it back I called the bank and phone call went directly into the collections department. (what the heck I have always had perfect credit) They kept telling me it was a computer glitch. Finally I got the check back.

    December my payment had not cleared the bank and was going to be late. I called the bank and once again my call went directly into collections. After several calls and being put on hold and then being hung up on I found out I was put into the Making Home Affordable program and they were holding my house payment checks for four month, which would ruin my credit. I went to the nearest branch and sat for over four hour refusing to leave until this was straighten out and my payment was made. Actually the bank had closed and I was still there. Finally they said is was straightened out and I had a receipt for December's house payment.

    This continued to happen and it has been a terrible struggle for me to try and clear this up. Finally one Branch Manager has helped and got BofA to pay one house payment for me for all my trouble while they attempt to straighten this out. They continue to say it is a glitch in the system and they take the codes out of the system and some how the codes were back in there again the next month. At one point I went from the MHA program to the Forebearance program which I did not agree to either. The codes appeared and more form letters would generate and be sent to my address.