Financial author Roger Lowenstein writes in the New York Times magazine over the weekend:
Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work. But the housing collapse left 10.7 million families owing more than their homes are worth. So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?
He seems to conclude that it isn’t, and that many more people should be thinking about sending the keys to the bank. He relies in part on the reasoning of Brent White, a University of Arizona law professor who has frequently been quoted advocating that homeowners who are underwater on their mortgages should walk away even if they can afford their payments. Lowenstein writes:
Read more from the LA Times
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Wells Fargo has no intention of doing loan modifications for anybody. I’ve read that they have only made 9% of qualified loans final. This was the case for me. We were approved based on all our informaiton in june for the trial period. The agreement says that if we complete our obligation under the trial period (make all payments on time) and the provide documentation to verify that all the information we were approved with was true. The lender WILL finalize the modification. We made all payments on time. We were then told we were approved but because of the backlog it would take a few month for the final paper work. We were then asked to send all new proof of income, so we did. We checked weekly and were given the same info “you’re approved just keep making the modified payment and your paperwork will be done in another month.” On Nov. 30 we were told by Paul Masters the negociator that documents were ordered and we would get them in the mail in one to three weeks. When we didn’t get them my wife called and we were told we were out of the program. Worse we were told we were 8000 in the rears and they wanted the money now. At the time we started this we were current, we made every payment on time in the amount we were told. Wells Fargo could not tell us why we were kicked out of the program. We just got their joke of an inhouse mod that saves us $40.00 per month for five years then back up to normal. They increased our balance by 9k even though we only saved 6600 on the lower payments over the nine month we were told to make them. So wells took 3k extra to our loan to lower our payment by 40 bucks x 60 payments. What a rip. On top of this, based on the wording in the HAMP agreement we signed in June, they have violated the agreement in two ways. 1 if we met the payments and all orginall info was true they will finalize the mod. 2 if we don’t meet the requirements in the 1 part ( payments and true info) and we’re disqualified we must be notified in writing and we were not.
Wells gets hundreds of thousands of these apps. They have finalized less then 9%. In the media the blame is put on homeowner for not providing docs. In my case that is simple not true we submitted and re-submitted over and over each time we were asked. I just wonder of the few that they’ve finalized how many were friends and relatives of Wells execs.
Hello Carl and all, this is happening to others as well. Banks claiming it is the homeowners that fails to send in docs. As for us, we are trying to work with Chase and yet we get the same results.
Check out the same response from people who is trying to work with Chase. http://loanworkout.org/2009/01/chase-mortgage-loan-modification/#comment-19171
Basically, I don’t see a resolution in this matter.