Claudia and Mark’s Torres dream went down the drain last week. Unbeknownst to them their house was sold while they were trying to get a loan modification for the fifth time with GMAC.
They found out their house had been sold from a friend in the real estate market who recognized the name of their street on a listing of houses put up for auction minutes before the property was sold.
GMAC has yet to inform them of the sale.
For the better part of two and half years, the Torreses (not their real name) tried unsuccessfully to refinance their $410,000 mortgage or get a loan modification. Despite paying $2,500 a month, and most recently, nearly $4,000 a month, they saw their $410,000 mortgage balloon to over $530,000, the result of added fees, interest and penalties they had no way of controlling. Their home was auctioned off for under $330,000.
Like thousands of other homeowners in their situation, they ran into one wall after another. They were buried in stacks of confusing paperwork, subjected to repeated misdirection, and to quote Mark, “lies and cover ups and generally crappy treatment from anonymous people hidden away in some call center.”
We won’t go into all the ins and outs of Claudia and Mark’s story here, we think you get the gist of their woes, and frankly, there just isn’t enough space in this newspaper. But after looking at their mountain of paperwork, pages of notarized documents, folders of notes on conversations, we can’t help but agree with them: President Obama’s homeowner rescue program has killed, not saved their American dream, and GMAC hammered the nail in their coffin.
GMAC, yes the same GMAC that received billions in federal bailout money from taxpayers like Claudia and Mark Torres, is shamelessly running amok, without any real oversight because they are not a federally regulated bank, not to say the banks are doing any better.
Before you shout that they should have gone to one of those Obama approved ‘HOPE’ loan modification expert helpers, let us tell you that they did just that after deciding they could no longer “go it alone.”
The result? Their mortgage payment went up $1,000 and they were thrown on the fast track to ruin.
New rules from the Obama administration are supposed to keep lenders from selling a person’s home while they are in the modification process, but who is enforcing the rules?
A California survey released in July found evidence of banks foreclosing in error. “More than a year since it began, the nation’s primary foreclosure prevention policy is riddled with mortgage servicer mistakes and noncompliance along with continuing incidents of homeowners who were foreclosed on while in the middle of applying for loan workouts or paying trial modifications,” according to the California Reinvestment Coalition’s survey.
The statewide survey of California mortgage counselors found 60 percent of counselors reporting that they have had clients who suffered foreclosure while in the middle of negotiating with their servicer. The counselors represent 40 agencies that provide foreclosure prevention services throughout California. There are more than 80 HUD-approved nonprofit mortgage-counseling agencies in the state.
The counselors, who are supposed to be the experts assisting stressed homeowners, said the majority of their clients were stuck in the loan modification process and that HAMP, the government program that was supposed to help them, “has consistently reported very low conversion rates of trials to permanent modifications, so many borrowers in trial modifications may still lose their homes.”
GMAC participates in HAMP.
This week, according to ProPublica, the state of New York “crafted new laws to give the state authority to punish mortgage servicers — something the Treasury Department, in administering its struggling mortgage modification program, has so far failed to do.”
It is time for California to do the same.
Our economy is still in a death spiral and the misdeeds of mortgage lenders like GMAC are making the situation worse, not better. Californians are seeing their home values dive and their ability to stabilize their mortgage payments disappear without ever really knowing why.
To help prevent unnecessary foreclosures in California, Senate President Pro Tem Darrell Steinberg and Senator Mark Leno introduced SB 1275, which provides rights and remedies for consumers working their way through the loan modification process. While that may be a start, what is really needed are laws with teeth in them, and for the state to be willing to sink its teeth into any mortgage lender or loan servicer that fails to obey the law.
There are thousands of Claudias and Marks out there, it’s time for legislators to step in and protect them from scoundrels like GMAC.Posted - Copyright © 2022 Eastern Group Publications, Inc.