Homeowners seeking mortgage debt relief through Bank of America are being left unaided in spectacular numbers, receiving mortgage modifications at only a fraction of the rate these loan modifications are being granted by other large mortgage servicers, according to recently released government data (âBank of America Stands Out for Poor HAMP Performance,â The Huffington Post, Sept. 27, 2010).
The Obama administrationâs Home Affordable Modification Program was originally conceived to help a projected 3 million to 4 million homeowners modify the terms of their mortgages so they might avoid foreclosure and hold on to their homes in tough economic times.
HAMP gives mortgage servicers $1,000 incentive payments to provide eligible homeowners with a five-year mortgage loan modification, called a permanent modification, after a three-month trial loan modification.
The program has underperformed generally, enrolling only a fraction of the homeowners it was designed to handle and offering permanent loan modifications to only a small percentage of those.
But at Bank of America, the level of underperformance has been particularly woeful.
The bank, says Alan White, a Valparaiso University Law School professor, has âmastered the art of false hopes.â
â[Bank of America] has converted only 26 percent of trial modifications to permanent ones, while servicers as a whole have achieved a rate of over 50 percent,â White noted.
Meanwhile, more than half of the bankâs trial loan modifications are over six months old, âdespite the fact that they are supposed to convert to permanent or be cancelled after three months,â he continued.
And even though home loan servicers are offering their own mortgage modifications to homeowners who either failed to qualify for HAMP or had their trial HAMP modifications cancelled, âBank of America seems to be stubbornly refusing to go along with the program,â White said.
Overall, among the pool of delinquent home loans being administrated by the nationâs eight largest home mortgage servicers, 44.5 percent of homeowners whose trial HAMP mortgage modifications were cancelled ended up receiving alternative modifications from the servicers. At Bank of America, on the other hand, customers in the same situation received alternative loan modifications just 24 percent of the time.
For homeowners who were denied trial HAMP mortgage modifications from the start, the eight largest servicers, collectively, offered their own alternative modifications to 31.3 percent of those homeowners. At Bank of America, that number was only 11 percent.
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