Investigating the Issues That Affect You Most

Bank Dangled False Hope of Mortgage Modification: Couple

JPMorganChase tops with complaints over delayed mortgage modification applications

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    NEWSLETTERS

    A Beverly couple says they regret the day they asked their mortgage company for help on their payments and blame the company for dangling false hope in front of them.

    "I wish Chase would have never bought my mortgage," said Paul Bauer.  "They were the beginning and the demise of my family. It's made sleepless nights. I've spent days on the phone. Days literally."

    He and his wife applied for a loan modification from JPMorganChase through the federal government's Making Home Affordable program, which is designed to help struggling homeowners avoid foreclosure.

    But instead of help, Bauer says a disorganized and mismanaged application process inside the company left them on the brink of losing their home.

    Bank Dangled False Hope of Mortgage Modification: Couple

    [CHI] Bank Dangled False Hope of Mortgage Modification: Couple
    JPMorganChase tops with complaints over delayed mortgage modification applications.

    Chase initially agreed to put the couple in a trial modification period, lowering their monthly payment by about $400 per month.  But  the trial period, which should, by government guidelines, last three months, instead stretched out for 13.

    The lender ultimately decided the couple made too much money to qualify for a permanent modification, which confused the couple because their income hadn't changed one penny since applying.

    "Same money as day one," said Paul Bauer.  "They could do the calculations within ten minutes... They could easily simplify and fix this. They're just in a business of ruining people and taking homes.  That's they way I see it."

    The Bauers are in good company.  A growing number of voices are on the record now, leveling dismay, discontent and disapproval at the way the MHA's Home Affordable Modification Program (HAMP) has been administered by both the major banks and the Department of Treasury.

    No lender is immune, but Chase seems to have attracted some of the most high-profile criticism.

    At a hearing in June, Ohio Rep. Dennis Kucinich told the CEO of JPMorganChase Home Finance that he had heard more complaints from his constituents about Chase than any other bank, specifically citing Chase delays in handling loan modification requests.

    That critique came on the heels of a series of ProPublica reports this spring that outed Chase as the worst bank when it comes to letting homeowners languish in load modification trial periods.

    "Eight months (at Chase). It's supposed to be three months. And no one else is really close to that, including Bank of America, which is much larger than Chase," ProPublica's Paul Kiel told NBC Chicago.

    There are many downsides to an extended trial period, the worst of which is that homeowners may be operating under false hope and spending money they should be saving.

    Paul and Annette Bauer know all about the math of elongated trial period. After they were turned down for a permanent modification, they say Chase immediately came after them for the delinquent amount (the difference between their original monthly mortgage bill and the bank-approved trial period amount).

    The problem? The Bauers say Chase apparently couldn't decide how much they owed, sending the family three separate demand letters over three weeks, with three different lump sum amounts due.

    "We've tried to do everything they've asked us to do and it's just been very heart-wrenching," said Annette Bauer, adding that it's only through the generosity of family that they were able to save their home from imminent foreclosure.

    For its part, a Chase spokesperson told NBC Chicago:

    "We apologize that we didn’t process the Bauer’s request quickly, requiring them to submit updated information. Ultimately, they didn’t qualify for a modification, so we continue to work with them on their options and to see if we can waive any more of the fees."

    "Chase has offered more than 900,000 mortgage modifications to struggling homeowners since the beginning of 2009 through a wide range of government and Chase initiatives. Our loan counselors have met face to face with 140,000 struggling homeowners at special centers – including three in the Chicago area -- and reach-out events."

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