MHA tips for avoiding scams

Editor’s note: This is the second story in a two-part series. Click here for part one, “Making Home Affordable offers hope, frustration."

On paper and in theory, the federal Making Home Affordable  program is great.

It offers homeowners the chance to either refinance or modify their mortgages, respectively, via the Home Affordable Refinance Program and the Home Affordable Modification Program, thereby staving off foreclosure and helping the housing market rebound.

The problem is, Oakland County resident Tracey Briggs said, people aren’t getting the help they need; rather, she said, many banks are giving homeowners the runaround — in her quest to save her family’s home through HAMP, Briggs said, her lender kept “losing” documents and refused to help until she got an attorney.

“HAMP is a fabulous program — the problem is having it work. … Prior to October of 2009, the approval rate was an abysmal 3 percent,” said Tony Haddad of SBH Communications in Rochester, who’s been researching the problems people like Briggs have been having with MHA in an effort to get the word out that some banks aren’t holding up their end of the bargain.

“The main complaint (of homeowners attempting modification) is banks claiming that they didn’t receive all the documentation,” said Haddad. “I think the banks were unprepared for the amount of workflow they’ve been receiving.”

‘Cross every T, dot every I’
That’s why homeowners need to make sure that they have everything in order and accounted for, and like Briggs, be prepared to be persistent and to spend hours on the phone, take detailed notes and resend the necessary paperwork — a hardship letter detailing why a modification is needed, the prior year’s 1040 and W-2 forms, the two most recent pay stubs, bank statements and information regarding current debts for credit cards, student loans, other mortgages, etc. — via certified mail to ensure, and have proof, that the bank has all of the paperwork on hand.

“Make sure you cross every T and dot every I; time- and date-stamp everything, every person you talk to, every bit of information; document everything and keep it in a file, a very thorough file,” advised Briggs, who also suggested sending everything via certified mail, “because then you get confirmation they received it.”

Briggs — whose problems started after her husband lost his job and was unemployed for a year and a half, and were compounded when her own income was reduced due to cutbacks — is more than familiar with that issue: Prior to MHA, Briggs had attempted modification through the traditional route in 2008, and after providing her loan servicer with multiple copies of the necessary documentation and spending countless hours on the phone trying to get straight answers, she was at her wits’ end.

“They (the reps) are very abrasive; they have no interest in being compassionate or helpful in any way. They don’t offer any options, they just tell you, ‘No. We’re foreclosing on you,’” Briggs said. “The impression I get is that … they think, ‘You did this to yourself, you deserve to lose your home.’ But that’s just not true. One and a half years without that income hurts. I stopped paying other bills, my credit cards, to pay my mortgage.”

Frustrated, Briggs hired attorneys Lionel Bashore and Kevin Green of Bashore Green Law Group to do all the communication for her, “because it’s just so upsetting.”

Within a half-hour of Bashore negotiating with her lender, Briggs said, she was approved for mortgage modification.

The catch, she said, was that because she was also behind on her taxes, her monthly payment actually went up, drastically — as did the balance of her mortgage, by $36,000 — further jeopardizing her ability to pay.

Saving grace?
Then, the MHA programs were announced, and Briggs thought she finally had found her saving grace in HAMP.

With renewed vigor, she set to work, and with help from Green and Bashore, she was approved for a trial modification via HAMP. After successfully completing the trial period, Briggs thought she had finally saved her family’s home — only to have the “missing-document scenario” rear its ugly head yet again.

“I was devastated. I didn’t know what else could possibly be missing. They already had all the information when I was approved for the trial modification, and I was confident at that point that I had everything in order,” said Briggs, adding that the representative wouldn’t specify exactly what was missing.

“She made all her payments on time and passed the trial period, and then they said they were missing information. Never in any of this did they state that she didn’t qualify, just that there was missing information — we had to prove they had all the information,” said Green, who believes “a tremendous amount of other people” are having the same experience.

“The interesting thing is, you try to be proactive … and the banks say, ‘But you’re not behind on your mortgage’ — ‘No, I’m not; I’m trying to be proactive’ — and you’re told you don’t qualify,” said Green, who experienced similar frustrations when he modified his mortgage after a divorce a number of years ago.

Therein lies another problem, Green said: The banks won’t extend help if a homeowner’s mortgage is not in default, but if it is in default, foreclosure action is typically taken.

What next?
At press time, the Briggs family’s situation was still in limbo: While she had been told she could reapply for HAMP, she had also received a foreclosure notice and was unsure what action would be taken.

“When you’re told that you’re going to lose your home and you’ll be on the streets, it’s very upsetting; it’s upsetting to have to tell my kids that we might have to move, and when they ask where, all I can say is, ‘I don’t know,’” she said. “I just want to save my home. I’ve been here for 16 years; we’ve raised our children here — it’s a labor of love, and I’m not going to give it up without a fight.”

Briggs knows she’s not alone and hopes her story can help others in her situation.

“The sad thing is, a lot of these people are falling victim to scams,” said Haddad, who advised homeowners to be wary of “loan modification specialists” with exorbitant fees. “Oftentimes, they’ll just fill out the paperwork for you, and then you’re on your own … and you’ve paid $3,000-$4,000 for nothing.”

Briggs said she’s constantly being inundated with mail and e-mails from companies that want to “help” her.

“There are so many scams out there, and I’m very cognizant of that — you just don’t know who you can trust. Without legal representation, I’d be lost,” she said.

Green invites homeowners who are interested in the MHA programs to call his office for a free consultation. “Bring in every bit of paperwork — your mortgage, assets, liabilities, everything — and then after we review everything, which usually takes a day or two, we can give you suggestions. If we can’t help, there’s no charge,” he said, noting that homeowners should also consider talking to a U.S. Department of Housing and Urban Development housing counselor and researching MHA guidelines and options.

“Double check your options. If you’re on the border — in that gray area where the bank says you don’t qualify — you’ve got to punch the banks back, so to speak,” said Green. “There are definitely options out there — you’ve just got to be willing to fight; when a client doesn’t have legs, that’s what we’re there for. The goal is to keep people in their homes — that’s what the program was put in place for.”

Bashore and Green were scheduled to go to court the end of this week in an effort “to force the bank to help … (and) produce documents,” Green said. “They are still looking to foreclose on her home, even though she qualifies for the modification.”

For more information on MHA, visit www.makinghomeaffordable.gov. For a free consultation and more help, contact a housing counselor via the Federal Housing Administration’s Department of Housing and Urban Development HOPE for Homeowners program, at www.hud.gov/hopeforhomeowners or at (888) 995-HOPE (4673). To make an appointment for a free consultation at Bashore Green Law Group, call (586) 803-0500.

You can reach Staff Writer Christa Buchanan at cbuchanan@candgnews.com or at (586) 498-1061.