In two of my previous posts on the HAMP debacle, we talked about how Servicer Compensation based upon a percentage of the Outstanding Loan Pool Balance might be skewing the way your Loan Modification Request gets handled (The Elephant In The Room) and how hiding behind an NPV rejection might allow a servicer to reject a true modification and prevent any kind of meaningful objection from the consumer as to the findings (On NPV and Schrodinger's Cat).
In the latest installment to the HAMP horror show, we find insult being added to injury as we discover that, in the end, many beleaguered homeowners in Southern New Hampshire (and everywhere else) are the recipients of a double whammy. They are not only being denied a Permanent Modification, they are also being presented with a bill for thousands of dollars and threatened with foreclosure if they don't pay up.
HUH? If the Homeowner has been making their agreed upon Trial Modification Payment, where is this huge bill coming from?
Well, remember the fine print in the Trial Modification Agreement? Remember the part that says that the difference between what your payments should be and what they are reduced to will be added to your loan balance? Well, it seems that fine print fails to say, "Oh by the way, if we decline you for a Permanent Modification we're not going to permanently add this to your loan balance."
Instead, once the Servicer is through making money off the temporary increase in your loan balance they then want the difference repaid...by you...right now...or else!
Also remember, as I mentioned in my post In Support Of A Foreclosure Moratorium, since your payments are not posting every month as they should, each month you are in a Trial Modification you are further and further in default.
"What? How could this be? Wasn't the HAMP program designed to HELP America's Homeowners?"
Maybe. Maybe not.
There is a theory being floated about that the HAMP Program was never meant to help the homeowner but to allow for an orderly method of foreclosing upon the trillions of dollars worth of non-performing loans and negative equity created during the bubble years, while allowing the servicer to choose when to recognize losses and, of course, make a few extra bucks in the process.