Loan modification programs: Help or hassle for homeowners?

By Zaneta Lowe  - bio | email | Twitter

COLUMBUS, GA (WTVM) - They were designed to keep homeowners off the streets.  Loan modification programs can change the terms of a borrower's mortgage in various ways, with the goal being more manageable payments.  However, some say the programs can be more of a hassle than help.

In fact, one report reveals, as of September 2009, more than 600,000 borrowers were in trial modifications through the government's plan, but less than 2,000 had become permanent.

One Columbus couple knows the story all too well and continues to search for answers.

"I'm not a user, or an abuser, I'm a hard worker," says Rhonda Daniels, who like many has fallen on hard times.

She and her husband Shedrick left their jobs to start a business a few years ago, but when the economy faltered so did it.

Daniels was re-hired at her old job, but her husband couldn't find another.  That's when she says they began having problems making mortgage payments.

"Once we started going downhill, we would miss payments here and there, catch them up and miss them," explains Daniels.

She says when they started to get information in the mail from their lender about loan modifications, it seemed like a good option.

"Fill that out, send it back to us and we can get the ball rolling."

Except Daniels says it hasn't exactly happened that way.

"I formally sent off the paperwork via fax January 4th of '09 and it's been a paper shuffle ever since then."

A year later Daniels claims she's still getting the runaround from her lender, Wells Fargo, with reps continuing to ask for documents she says she's already submitted.

"It makes me frustrated, it makes me angry, it makes me sick that we live in those times where you reach out for help and you can't, hardworking people like us, but then people who aren't doing anything, everything seems to be a breeze for them," Daniels says.

Wells Fargo has since set the Daniels family up on a forbearance plan where they make partial payments.

Even still, they're more than $6,000 behind.  We talked directly with company officials to find out exactly what the hold up is.

"We're sorry for this homeowner's frustration and we know the homeowner, our customer has been under stress. It's not typical for it to take such a long time, we don't like for it to take such a long time. We want to help as many people as we can, as quickly as we can," says Wells Fargo Spokesperson Jay Lawrence.

Wells Fargo participates in the government's Home Affordable Modification Program, also known as HAMP, plus the lender has its own.

Officials say borrowers can almost immediately begin the trial process, but further documentation is required for final modification approval.

They say it can especially be tough to qualify homeowners who are under or unemployed.

"Hopefully during that period of time, something comes together in terms of a job or a stabilization of their income, then once that happens, then you can start to evaluate what is affordability," explains Wells Fargo Home Mortgage Spokesperson Tom Goyda.

Melanie Faison is with NeighborWorks Columbus, they council homeowners who need modification.

She says ideally it can take 90 days, possibly up to six months or longer.

Research shows, though, homeowners who use such counselors get results faster.

"That's where a professional comes in, and we can document, a lot of them have dedicated email addresses for the mortgage professionals for counseling professionals, we have different access than a homeowner would have alone," says Faison.

Daniels says at this point she doesn't know where to turn.

"So you get your hopes up, finally after a year and some months, where do you go?"

If you'd like to speak directly with a counselor at Neighborworks Columbus call 706-324-4663.

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