My question involves real estate located in the State of: California
I tried for many years to get a loan modified under HAMP. Bank of America was paying bonuses to contract workers to lose, shred, and reject applications so I didn't stand a chance with them. When my loan's servicing was transferred to a small subservicer in Texas, it got worse. Just as they were about to auction off my house, I found out why they hadn't approved me for a HAMP modification. There's a very specific set of steps the company, as a TARP funds recipient, was supposed to follow when calculating eligibility for a HAMP modification. In response to my somewhat vague complaint to CFPB about the company's rejections of my applications, the company sent CFPB a letter gave that their game away. Its nameless author spelled out the steps they took to calculate my eligibility, and made it apparent that where they were supposed to insert something called "capitalized unpaid principal balance" into an equation, they had inserted the uncapitalized unpaid principal balance. It made all the difference in the world.
Also, as one of the steps in massaging a problem loan into a potentially successful loan, they were supposed to extend the loan term, if necessary, to shrink the payments to affordability. (It would also let them collect more interest when all is said and done, but it would take longer.) This loan servicer didn't try extending my loan term before announcing that they couldn't reach an affordable payment given my income, balance, etc. Nor did they extend anyone else's; all the loan mods they listed on their monthly reports to the trust that owned the securtized loans in my tranche had the same year listed for loan term completion, which was still just 30 years from when the loans were originally made.
For what it's worth, the servicer turned out to be among the worst on record. The US Treasury was keeping tabs on about 22 loan servicers, tracking the number of HAMP applications they received and approved. It turned out my loan servicer's rate was the lowest of those tracked. Its rate was separated from the second lowest by the largest percent gap between any two servicers (12% approved versus 17% by the second-lowest), so it was arguably low enough to be an outlier on the distribution.
Despite stellar bill-paying performance my entire life, on every loan and bill other than the one in question, I filed for bankruptcy. I did manage to get the loan modified through the bankruptcy process. But, it was grueling, took a year, and cost $40,000. If the loan servicer had simply done what the HAMP rules stated they must do, I'd have been spared all of that. My loan was eminiently modifiable under HAMP.
Is a loan servicer that violated HAMP rules, while pretending to follow them, liable for damages caused by their failure to follow the rules?
PS I'm aware that a loan servicer isn't obligated to modify loans if it doesn't want to. But, once a servicer embarked on evaluating a loan for the now-defunct HAMP, they did have to do it a certain way. The language of the manual is in the imperative.
I tried for many years to get a loan modified under HAMP. Bank of America was paying bonuses to contract workers to lose, shred, and reject applications so I didn't stand a chance with them. When my loan's servicing was transferred to a small subservicer in Texas, it got worse. Just as they were about to auction off my house, I found out why they hadn't approved me for a HAMP modification. There's a very specific set of steps the company, as a TARP funds recipient, was supposed to follow when calculating eligibility for a HAMP modification. In response to my somewhat vague complaint to CFPB about the company's rejections of my applications, the company sent CFPB a letter gave that their game away. Its nameless author spelled out the steps they took to calculate my eligibility, and made it apparent that where they were supposed to insert something called "capitalized unpaid principal balance" into an equation, they had inserted the uncapitalized unpaid principal balance. It made all the difference in the world.
Also, as one of the steps in massaging a problem loan into a potentially successful loan, they were supposed to extend the loan term, if necessary, to shrink the payments to affordability. (It would also let them collect more interest when all is said and done, but it would take longer.) This loan servicer didn't try extending my loan term before announcing that they couldn't reach an affordable payment given my income, balance, etc. Nor did they extend anyone else's; all the loan mods they listed on their monthly reports to the trust that owned the securtized loans in my tranche had the same year listed for loan term completion, which was still just 30 years from when the loans were originally made.
For what it's worth, the servicer turned out to be among the worst on record. The US Treasury was keeping tabs on about 22 loan servicers, tracking the number of HAMP applications they received and approved. It turned out my loan servicer's rate was the lowest of those tracked. Its rate was separated from the second lowest by the largest percent gap between any two servicers (12% approved versus 17% by the second-lowest), so it was arguably low enough to be an outlier on the distribution.
Despite stellar bill-paying performance my entire life, on every loan and bill other than the one in question, I filed for bankruptcy. I did manage to get the loan modified through the bankruptcy process. But, it was grueling, took a year, and cost $40,000. If the loan servicer had simply done what the HAMP rules stated they must do, I'd have been spared all of that. My loan was eminiently modifiable under HAMP.
Is a loan servicer that violated HAMP rules, while pretending to follow them, liable for damages caused by their failure to follow the rules?
PS I'm aware that a loan servicer isn't obligated to modify loans if it doesn't want to. But, once a servicer embarked on evaluating a loan for the now-defunct HAMP, they did have to do it a certain way. The language of the manual is in the imperative.
Is a Loan Servicer Liable for Damages After Violating Hamp Rules
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