Money Monday- Mortgage Modification

Scott is terrified he and his family will lose their home. 

Scott

"It's outrageous!"

Taryn was shocked when she got multiple foreclosure notices.

Taryn

"It's a nightmare."

A foreclosure auctioneer actually showed up in Jen's driveway.

Jennifer 

"I was freaking out, I was hysterical, I started crying."

These Massachusetts homeowners and thousands more struggling to pay their mortgages thought they'd found a life line. They'd applied to cut their payments under the federal Help for Homeowners program announced by President Obama in 2009.

President Obama

"The plan I'm announcing focuses on rescuing families who played by the rules and acted responsibly."

But our investigation reveals instead of getting more affordable mortgage payments, 35,000 homeowners have complained to the US treasury that the program is not working-and even making things worse! Different lenders–similar problems: the application process is so drawn out and so complicated some homes actually wind up in foreclosure. 

Jen says for months, she called and faxed and over-nighted documents, did everything one department of the bank told her. It took so long: Another department foreclosed.

Jennifer 

"It was like nobody knew what the other person was doing. And it was always like that." 

Taryn's worried she'll be next. She's been at it for months–with no success.

Taryn

"I kept saying is there a supervisor I can talk to? Who can I speak to? I need to get this resolved; I just want to get this done."

Scott says he's been battling mortgage red tape for more than a year.

Scott

"Can't talk to a human, can't get through, rerouting, such that nobody can ever, they get so frustrated they'll just go away.  It sounds like their plan is just to drive people away through frustration."

Financial watchdogs say it's clear there's a problem.  

Julia Gordon, Center for Responsible Lending

"What we don't know if whether this problem is sheer lack of capacity and incompetence or whether a lot of it is quite deliberate."

Lenders admit they're struggling to keep up with the volume of applications and constantly-changing rules. They also insist aren't trying to PREVENT people from getting modifications.   

John Courson, President, Mortgage Bankers Association

"It isn't a mess. It takes time, it is complicated, there is a lot of paper, there is a process that has to be followed, and if that's frustration to borrowers, I understand that."

If you're stuck in a home loan modification red tape what should you do? Experts say:

*Keep track of date and time of every call you make

*Record the name of the person you talk to

*Send every document that's requested even if you think you've already sent it 

*Get receipts for your faxes

*Keep copies of your payments

Some homeowners are also being told not to pay their mortgages during the applications process. US Treasury officials tell us: That's wrong. They say if you have the money to do it, always pay your mortgage.

Now if you're having mortgage modification problems, or even wonder if you're eligible, maybe we can help.

Join us at 1 p.m. for a live online web chat with a modification specialist.

If you're having trouble modifying your home loan, be sure to contact a HUD certified counselor. Check out this link for more info:

http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

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