This Article Is From 2013

Florida homeowners, and borrowers across the country, are no longer considering HAMP (Home Affordable Modification Program) to be the big success that it was touted to be by the Treasury Department when it debuted back in 2009.  HAMP, as you may recall, was a part of the MakingHomeAffordable program which describes itself as:

The Making Home Affordable Program (MHA) ® is a critical part of the Obama Administration’s broad strategy to help homeowners avoid foreclosure, stabilize the country’s housing market, and improve the nation’s economy.

What Has Happened to HAMP?

We’ve been monitoring the reality of banks failing to live up to their responsibilities under this federal program as more and more homeowners began filing lawsuits against lenders and suing banks for not accepting Home Loan Modifications under HAMP, specifically for lenders failing to accept a trial plan into a permanent home loan modification.

However, things seem to be getting more and more serious not just in Florida but in the entire United States.  This week, a new report was released by the Special Inspector General for TARP (Troubled Asset Relief Program) to Congress which found that HAMP is failing.  (Read the report here.)  For one thing, the Special Report shows that home loans that were modified under HAMP in the second half of 2009 are defaulting in shocking percentages:  46% of the HAMP modifications in the third quarter of 2009 are now in default.   This, of course, gives lenders an excuse to point the finger at HAMP for being a bad idea.

However, there’s more to this story. Much more.

And that story can be found in lawsuit after lawsuit, claim after claim, filed by individual homeowners all over this country against their banks for failing to do the right thing in a HAMP loan modification.  

All too often, the homeowner has worked with their lender to establish a trial period plan (TPP) – a modification of the original mortgage that the bank agrees is acceptable.  The borrower then makes payments pursuant to that trial plan.  Everything looks hunky dory.

Then, the borrower gets sideswiped by the bank as the lender rejects the mortgage modification as a final deal.  Often, the bank does this without following HAMP’s official guidelines — and sometimes, without the lender apparently even being aware of them.

HAMP TPP Actions Proceed In Federal Court Against Many Mortgage Lenders

Right now, so many borrowers have sued banks for this sort of thing that many of these lawsuits have been collected from all around the country and pulled together in big lawsuits (class actions) pending before a single federal district judge.  Among the banks who are defendants in these HAMP TPP cases are Wells Fargo Bank, Litton Loan Servicing, Citimortgage, and J.P. Morgan Chase Bank. 

However, many of these lawsuits have been filed against Bank of America based on bad HAMP actions by the lender.  Again, each lender is different and the claims against Bank of America do not include claims based upon not respecting HAMP loan modifications by other banks, such as Wells Fargo or OneWest Bank (see our earlier post).    These cases have their own nickname now: they’re known in legal circles as “HAMP TPP Cases.”  Different banks have different  HAMP TPP claims against them.

The Big HAMP TPP Case Against Bank of America

Right now, cases against Bank of America for evildoing in HAMP TPP Plan finalization of loan modifications have been consolidated before Massachusetts Judge Rya Zobel and the borrowers had an early victory against Bank of America as it moved to dismiss everything – some cases were dismissed, but many remained (see Schedule A to the  2011 Amended Complaint for a list of the cases remaining).

Right now, the parties are doing discovery (gathering facts, interviewing witnesses, taking depositions, etc.) and there is nothing set before the court until August 2013.

For details regarding the bad things that borrowers are alleging in federal court has happened to them in HAMP TPP deals with Bank of America, you can read the entire Complaint that has been filed on their behalf in the public record.  There, you will find true horror stories that include American citizens paying monthly mortgage payments under the Trial Period Plan, as well as paying additional monies to the bank, only to find that foreclosure proceedings were still moving forward against them by the Bank’s lawyers.

In other words, in case after case, the Bank winked and took the TPP payments and never halted their foreclosure proceedings.

Fighting For Right in HAMP TPP Situations

Once again, we have to reiterate that this is the Wild Wild West in Florida Real Estate and Florida homeowners and borrowers need to think twice before negotiating with banks or mortgage lenders without having an experienced Florida foreclosure defense lawyer at their side.

Real estate attorneys who deal with HAMP Trial Period Plans, HAMP TPP Claims, and mortgage loan modifications generally usually have lots of knowledge that is very helpful to the individual borrower: not just about Florida law, but also about the individual bank and even about the bank representatives doing the actual deals.  This kind of savvy is great to have on your side at a negotiation table.

There’s lots of shady stuff that has been going on for years now — and will likely continue for the next few years.  HAMP modifications were a good idea, and lenders need to respect borrowers and the intent of this federal program.

Do you have questions or comments? Then please feel free to send Larry an email or call him now at (954) 458-8655.