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Obama HAMP program enabling banks to commit massive fraud with taxpayer $$$

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brentspeak Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 10:32 AM
Original message
Obama HAMP program enabling banks to commit massive fraud with taxpayer $$$
Edited on Sun Jan-30-11 10:38 AM by brentspeak
Essentially, Obama's HAMP program works like this: give the banks billions of taxpayer dollars to "encourage" them to honestly renegotiate homeowners' underwater mortgage terms so that homeowners can avoid foreclosure. The result?



http://www.news-press.com/article/20110130/RE/110129012...

Loan modifications burn many homeowners

McClatchy News Service January 30, 2011

MINNEAPOLIS Many people who sought help under a federal program created to keep them from losing their homes are instead saddled with huge, unexpected bills.

Thousands now face a stark choice: Go deeper into debt, or foreclosure.

Lenders routinely approved short-term trial loan modifications that reduced payments for desperate borrowers under the umbrella of the Obama administrations Home Affordable Modification Program. But lenders continued to count the mortgages as delinquent or in default.

Now instead of granting permanent modifications, lenders often are reinstating the original loan terms and demanding big back payments.




http://www.bnet.com/blog/financial-business/foreclosure...

Foreclosure Express: Why the Feds Let Banks Get Away With Murder

By Alain Sherter | January 28, 2011

Big banks that participate in the Obama administrations main program to combat foreclosures have, appropriately, drawn fire for failing to help struggling homeowners by lowering their mortgage payments. But the largely untold part of the story is why the government is so reluctant to force these loan servicers to comply with the federal Home Affordable Modification Program, or HAMP.

ProPublica has the goods, and it will make your blood boil. Ignoring calls by lawmakers of both parties, consumer advocates and even its own staff, the Treasury Department refuses to punish financial institutions that blatantly violate HAMP, according to the nonprofit journalism outfit. The agency has imposed no fines or other penalties, such as withholding the incentive payments servicers get for modifying mortgages through the program. It has no written policy for handling violations. Treasury, which once vowed to sanction financial firms that didnt play by the rules, now even contends it has little power to do so:



In fact, despite issuing public warnings for more than a year about imposing penalties, the Treasury Department told ProPublica this week they dont even have the power to punish servicers for wrongfully denying help to homeowners. Instead of toughening the program, Treasury has actually loosened it in the face of industry lobbying.


snip

Treasurys dismal record of fighting foreclosures comes awfully close to complicity with the financial industry. To that end, agency chief Tim Geithner also has argued against even a temporary slowdown in foreclosures in wake of the robo-signing scandal.


Incredibly, in broken-clock fashion, the HAMP scandal has prompted the House GOP to do the only useful thing it has ever done in the past 30 years: urging that the HAMP program be scrapped. However, corrupt Republicans are also unlikely to demand that mortgage cramdown legislation -- which would actually reduce foreclosures without costing a dime of taxpayer money -- be passed by Congress and signed by the President instead. So between bought-off Republicans and Wall Street-advised Obama, the American people are between a rock and a hard place.


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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 10:46 AM
Response to Original message
1. this bears repeating:
'ProPublica has the goods, and it will make your blood boil. Ignoring calls by lawmakers of both parties, consumer advocates and even its own staff, the Treasury Department refuses to punish financial institutions that blatantly violate HAMP, according to the nonprofit journalism outfit. The agency has imposed no fines or other penalties, such as withholding the incentive payments servicers get for modifying mortgages through the program. It has no written policy for handling violations. Treasury, which once vowed to sanction financial firms that didnt play by the rules, now even contends it has little power to do so:'
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FormerDittoHead Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 01:46 PM
Response to Reply #1
6. Here's the link for others: http://www.propublica.org
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Autumn Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 12:03 PM
Response to Original message
2. Was this part of the stimulus program? I remember
hearing about it but never connected it to it.
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golfguru Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 12:16 PM
Response to Original message
3. Bailouts of Banks
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snagglepuss Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 12:35 PM
Response to Original message
4. K and R nt
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KoKo Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 01:36 PM
Response to Original message
5. Kick...
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BlueIris Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 07:11 PM
Response to Original message
7. Ugly.
And shameful.
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boppers Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 07:55 PM
Response to Original message
8. Hmmm...
"JPMorgan Chase and other lenders argue that the risks are clearly disclosed to borrowers when they sign up for temporary loan modifications."

So, people who got stuck in a bad situation because they didn't read the fine print.... got stuck in a worse situation because they didn't read the fine print....AGAIN?

Lame.
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brentspeak Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 08:43 PM
Response to Reply #8
9. Hey, everyone! A Big Bank groupie has popped up.


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boppers Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 08:47 PM
Response to Reply #9
10. No, I'm a reader.
Contracts? I read them. Instruction manuals? Those too. Warning labels? Yup. Ingredients? Always.

I don't blame others for my lack of reading, because, well, I can, and do, read.
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brentspeak Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 08:59 PM
Response to Reply #10
11. You can read? Great! Then read this:


http://www.huffingtonpost.com/2011/01/28/hamp-repeal-ho...

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.'"


Do mortgage documents indicate that banks will later on conveniently "lose" documents or otherwise renege on previously agree-upon terms? What did the Garwoods fail to read that their bank didn't bother to write, Brain-Stem?
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boppers Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 09:12 PM
Response to Reply #11
12. If you do not qualify, you are still liable for your payments.
Doesn't matter if you, or the bank, claim a dog ate your homework.
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brentspeak Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 10:19 PM
Response to Reply #12
13. Holy crow.
Well, you are the one who claims they know how to read...
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boppers Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 10:39 PM
Response to Reply #13
14. Here:
"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."

http://www.huffingtonpost.com/2010/08/04/extend-and-pre...

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Name removed Donating Member (0 posts) Send PM | Profile | Ignore Sun Jan-30-11 10:46 PM
Response to Reply #14
15. Deleted message
Message removed by moderator. Click here to review the message board rules.
 
boppers Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jan-30-11 10:54 PM
Response to Reply #15
16. The rest of the paragraph that doesn't nullify "Net Present Value" calculations.
Garwood's claims about income are irrelevant, even if Chase did go by whatever calculation she is assuming, the house is worth more as a foreclosure.

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