By Adriane Harden
We were all told to apply for the wonderful HAMP program that would help us save our homes. Well the Banks are using this very program to force homeowners into foreclosure so they can capitalize on the Shared Loss Agreement in place with the FDIC. This agreement allows the FDIC to share in the loss with the bank and cover the banks loss when you foreclose.
One of those banks, One West Bank FSB, under the ownership of IndyMac Mortgage Services, uses HAMP as a reason to not modify mortgages. According to them, this is based on a servicing agreement between them and the actual owner of the loan. When OneWest took over Indymac, the FDIC and OneWest executed a “Shared-Loss Agreement” covering the sale. This Agreement would reimburse OneWest for any losses they suffered in foreclosing on a property. In the event of foreclosure, the FDIC would cover from 80-95% of losses, using the original loan amount, and not the current balance. HAMP requires the servicer to comply with the terms of their servicing contract with the owner of the loan, the Investor.
This contract is called “The Pooling and Servicing Agreement” (PSA). This agreement dictates the terms regarding how mortgages are pooled, securitized, sold, and serviced. One of the terms many of these agreements contain makes it almost impossible for certain homeowners to be offered a modification. Some pooling and servicing agreements state that no more than 5 or 10% of the mortgages in the pool can be offered loan modifications in the case of default. This means that a homeowner applying for a loan modification after the 5-10% modification threshold has been met will be turned down for a modification. PSA’s set a limit to how many mortgage modifications can be offered by servicers, and they may face liability from the trusts or investors that own the loans if they offer too many workout plans to borrowers. Servicers may find themselves in breach of the servicing terms they agreed to, even if it would allow more homeowners to avoid foreclosure, and they are not willing to take this risk.
I would say at least let homeowners know from the beginning that they are not getting a loan modification. It would be much easier than making all the repeated phone calls and re-faxing of documents to get told you are denied and facing foreclosure.
Banks were bailed out by taxpayers, now they’ve found a way to use a program that was set up to help borrowers save their homes to use against them.Then to top it all off, the FDIC has provided a safety net with taxpayer money to once again bail them out through a Shared Loss Agreement.
What people don’t understand is that the banks will do almost anything to deny you that modification. Banks are in business to make money, by any means necessary! So if that means putting you out on the street so they can sell your home to someone else and make a profit, so be it. I refuse to bank with these crooks. I’ve moved my money to a smaller bank and/or credit union. I refuse to allow them to use my money to continue their corrupt business in organized crime. I think we all need to make a stand and stop supporting those that DON’T support us. If the Government won’t regulate the banks, then I will make a stand on my own. How about you?