I really do wish I could tell you something positive here, but I can't. The loan modification programs put into place by the Obama administration are and were good ideas to try to address the housing crisis -- but they are completely voluntary on the part of the lenders -- there are no laws that require any lender to participate in the program and many of the lenders do nothing more than play games with their borrowers for many months on end (losing paperwork, not "completing" the paperwork, etc, etc) because the lenders really do not want to modify loans, period. Here's how and why the loan modification programs are such a mess:
At the end of George Bush's term in 2008 when major banks and lending businesses were imploding, George Bush and his treasury secretary, Hank Paulsen, beat Congress into submission and were able to pass the TARP program -- where the major banks such as Bank of AMerica, Chase, etc. (and most small to medium sized lenders) were "loaned" billions of dollars (through creative accounting much of the money has still not been paid back but appears to the American people that it has been paid back). When the proposals were being pushed and flung around Congress, the Democrats wanted a provision in the TARP laws that would require any lender who accepted TARP money to participate in loan modifications with borrowers facing foreclosure. Bush and Paulsen absolutely refused to require the banks to help struggling homeowners and played a game of "chicken" with Congress -- they were willing to let the financial world collapse if Congress insisted on making the loan modifications provision into a law. COngress caved in when Bush and Paulsen started targeting specific Democrats in the news in their home districts stating "It's Barney Frank's fault" "It's Christopher Dodd's fault" and my favorite -- making like the world was falling in and it was all Nancy Pelosi's fault. The Democrats gave in and went along with George Bush giving millions of dollars to Hank Paulsen's banking buddies (Hank Paulsen was the former chairman of Goldman Sachs) with a wink and a nod "promise" to look into helping struggling homeowners, which never happened in Bush's term. So he trots back to Texas and President Obama was left with a giant mess of angry homeowners facing foreclosures watching greedy bankers STILL get their yearly and Christmas bonuses (which is still happening today).
Facing the foreclosure crisis and now with no means to FORCE the lenders to participate in loan modification programs, President Obama did what he could. He ordered Tim Geithner, his treasury secretary, and Shaun Donovan, his Secretary of the Department of Housing and Urban Development (HUD) to come up with some way to stem the foreclosure crisis. The result was the original "Making Home Affordable" program and since then, a few other programs that they have set up -- but by that time it was like trying to put a band aid over a raging bullet hole. Obama & Geitner could not go backwards and pass a law to require all of the lenders who were riding high on the TARP money to now offer loan modifications 4 months after much of the money went out the door, because our Constitution states that the government cannot pass retroactive laws placing conditions on the banks who took the TARP money -- so the only thing they could do was offer incentives to the banks to participate ($5,000 for each loan modified given to the bank at $1,000 per year for each year the owner remained in the home) and put these incentives into PROGRAMS such as Making Home Affordable and others that have come afterwards between Feb 2009 and today. HOwever, because the PROGRAMS are all strictly voluntary, the banks do not have to participate and they do not have to modify even ONE loan as requested by the Obama Administration. And since the banks do not want to participate in the programs at all, they make a big show on their websites that they are participating and modifying loans when the reality is -- for the most part -- ALL of the banks give any borrower asking for a loan modification the same year plus runaround that you have been getting.
I apologize for the lengthy explanation, but I get a question at least once a day like yours and it is so hard to make people understand that there is nothing that you can do against your lender in this situation. It is so frustrating and I was in the same position after a layoff in 2008 (I had to call my congressman's office to intervene with my lender). You can try contacting HUD's Making Home Affordable program -- www.makinghomeaffordable.gov where they have mortgage counselors and the assistance is free to try to get your lender to modify your mortgage loan and if all else fails you can do like I did and call your senator or representative to the US Congress and ask for their assistance with your lender (the senators and reps all have specific persons in their offices dealing with housing and foreclosure issues these days).
Please let me know if you have more questions.
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