Boston homeowners who financed their homes with Wells Fargo or Bank of America, are suing the mortgage lenders for not honoring agreements afforded under the Treasury’s new Home Affordable Modification Program (HAMP). The program allows homeowners who are facing foreclosure a slight reprieve in mortgage payments.
HAMP was put in place by the United States Treasury to help homeowners who are behind on their mortgage payment. Many of these homeowners are considered ‘underwater’, meaning their the amount they owe on their mortgage is more than what their house is actually worth. The collapse of the housing market and continued job losses combined to make housing prices much lower and many found themselves unable to pay their mortgages.
New rules for HAMP attempt to streamline the process for both lenders and borrowers. This includes a trial period where the borrower is required to make three successive payments on their mortgage under a temporarily modified loan agreement. If the homeowner succeeds in making the payments, then they are put into a second stage of permanent loan modification under HAMP.
Residents in Boston, however, argue the agreement was not carried out by both Wells Fargo and Bank of America. Both banks accepted billions of dollars under the government’s Troubled Asset Relief Program, which helped to bail them out. In accepting the assets, both banks agreed to participate in the government’s various modification programs including HAMP.
The banks receive a sum of $1,000 for each successfully modified loan. Homeowner Germano DePina of Roxbury, one of the plaintiffs involved in the case, says that he began making modified payments to Wells Fargo’s lending unit America’s Servicing Co. in September 2009. Three months went by and he heard no response back from the mortgage lender. This was true of many other borrowers.
The lawsuit is being considered for class-action status. Many Boston homeowners and borrowers remain in the dark about their loan status. As a result, the threat of foreclosure continues to loom large. Currently, only 2 percent of Wells Fargo loans have resulted in permanent modifications.
Written by Lani Shadduck
HULIQ.com
Source:boston.com
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