Really, Senator Durbin?

The back and forth continues:

Dear Woody:

Thank you for sharing your personal struggle to modify your mortgage through your bank. Too many families across the country are having a tough time staying in their homes, and our nation's banks are not doing nearly enough to help.

I am fighting to help Americans stay in their homes, but the banks are not meeting us in the middle. Congress supported the emergency aid package for banks, in part to revive the nation's credit markets. Yet lending and mortgage modification remain at record low levels.

The United States is working its way through the worst financial crisis since the Great Depression. The mortgage crisis has placed millions of families at risk of foreclosure. Currently, 1 in 8 mortgages is in foreclosure, and more families face foreclosure as existing loans reset their interest rates.

The Obama Administration has taken some steps to encourage loan modifications, but the very banks that caused the financial crisis in the first place have been very resistant to implementing the loan modifications families need. The Home Affordable Mortgage Program (HAMP) and the Home Affordable Refinance Plan (HARP) have created incentives for banks to negotiate with individual homeowners, but many banks have dragged their feet.

I have cosponsored S. 1731, the Preserving Homes and Communities Act of 2009, introduced by Senator Reed of Rhode Island. This bill would provide targeted relief to qualified homeowners through loan modification and mortgage assistance programs. It also incentivizes states and local governments to create strong mediation programs so more families can stay in their homes. Loan modifications not only help families, they also stabilize communities protect them from greater financial losses.

Historically, home ownership has been a pillar of our economy and an integral part of the American dream. I introduced the Helping Families Save Their Homes in Bankruptcy Act (S. 61), which would have allowed bankruptcy judges to modify the terms of mortgage loans on a principal residence for homeowners who meet strict income and expense criteria. This step is already allowed for mortgages on vacation homes and family farms and could have helped 600,000 families keep their homes. Unfortunately, because of strenuous opposition from the banking lobby and its allies in the Senate, my amendment was not successful.

Your voice is a valuable part of this discussion. I will continue to keep your family's situation in mind as Congress responds to the economic challenges facing American families.

Thank you again for your message. Please feel free to keep in touch.


Talk about stating the obvious.

While it's admirable that Senator Durbin introduced legislation to help people save their homes, his response did not answer my initial questions.

Why wasn't the HAMP legislation written to consider unemployment?

I said it before and I'll say it again---HAMP legislation was poorly written. It merely serve as a smoke screen by the government to appear as if they're helping the public.

You're screwed if you're laid off AND you have equity in your home.

Just give me a coke and a smile and tell me to shut the eff up.

That would be more effective than pretending to help.

Was it wrong of me to expect more of Senator Durbin than robotic responses?

Cue The Eye Rolling

Senator Durbin got back to me via the post. This is an excerpt of his letter:

Dear Woodlawn Wonder:

Thank you for your message. I appreciate hearing from you and share your concerns about the housing crisis and its impact on our nation and communities throughout Illinois. Enclosed please find a list of HUD approved counseling agencies that may be able to help you refinance your mortgage and keep your home. Also included are phone numbers for local helplines that may be able to aid you as well.

Obviously I didn't make myself clear. So I composed another letter.

Senator Durbin,

Thank you for your October 16th response.

Unfortunately it did not address my concern that the HAMP program does not cover home owners who are ahead in their mortgages and may fall behind in their payments due to unemployment.

Even the Congressional Oversight Panel states that "HAMP was not designed to address foreclosures caused by unemployment, which now appears to be a central cause of nonpayment, further limiting the scope of the program."

While I appreciate the supporting documentation, lists of HUD approved counselors will not address my situation.

What will address my situation is the Treasury Department expanding the HAMP program to consider unemployment. I fail to understand why I'm being punished for not being underwater with my mortgage and unemployed.

It seems had I purchased more home than I could afford or mortgaged it to the hilt, I would qualify for the program.

While the automobile and banking industries are "too big to fail" apparently the American homeowner is not.

Since you chair the subcommittee on Financial Services and General Government why can't you bring this rapidly escalating issue to the attention of the Treasury Department? Senator Durbin most unemployed Americans don't have another six months for the government to act on this issue.

Where's our bailout?

Sincerely,

The Woodlawn Wonder

Ladies and gentlemen, we are adrift and on our own. Our lawmakers are completely and utterly clueless.

By the time they "get it" we'll all be in a shelter.

The Blueprint

When I got the news that I was rejected from the Home Affordable Mortgage Program I was really, really upset.

To the point of tears.

And, might I add, a little hysterical.

For those of you who are long time readers of this blog, you'll remember that it took me 11 long months to find another job after my layoff from my previous employer of 9 years.

Usually foreclosures start at or around the 90 day mark.

We've had five in our association over the years so I've been at ground zero and am somewhat familiar with the process.

While it can take over a year, once it starts you either have to have a pile of money fall out the sky to stop it or sell your home.

Right now, neither is not a viable option. Who in the good Lord's name is going to rent to someone who dosen't have a job? Even the best do gooder liberal has bills to pay in these uncertain economic times.

I know very few people who can subsidize others right now.

So I knew that I'd have to help myself.

When I calmed down, dried my tears and had a few glasses of wine, I crafted this letter:

I just received a letter from my mortgage servicer letting me know that I DIDN'T qualify for the Home Affordable Modification Program AND due to my unemployment the the principal and interest that I can pay is unacceptable to the mortgage servicer.

What does this mean?

It means that as of the end of October, my mortgage goes back up to it's original payment (I was on a modification plan for $XXX) of $X,XXX.

I bring in whopping $X,XXX a month on unemployment and whatever I make at my waitressing job (usually under $XXX a month).

My lender said that they can't work with me on another loan modification program until I get a job to provide sufficient income.

I have never heard something so ass backwards in my life. At this point, I stand a very real chance of being foreclosed on.

When you hear about the program, you're under the impression that it's set up to help.

You lose your job through no fault of your own and you want to do right and keep your house, so you report your change in situation to your lender.

Huge mistake.

At this point honesty---for me at least---has not been the best policy.

It seems that the Treasury Department didn't plan for people having problems with their mortgage due to unemployment rather than being "upside down" in their mortgages. A part of the letter reads:

"The reason you do not qualify is that you did not pass the U.S. Treasury Department's Net Present Value (NPV) Test. The NPV test determined that the amount realized by sale of your property following foreclosure exceeds the amount that would be obtained through a modification of your mortgage."

I thought the point of the program was to keep people in their homes?

Call me at (XXX) XXX-XXXX if you'd like to discuss the situation further.

I seriously don't know what I'm going to do.

Sincerely,

The Woodlawn Wonder

I sent the letter to President Obama, Senator Richard Durbin, Congressman Bobby Rush, State Senator Kwame Raoul and State Representative Barbara Flynn Currie last Monday, October 12th.

Oh yeah, and a few members of the press.

Since it was a legal holiday I knew I wouldn't hear from anyone for a couple of days. Nonetheless, on Wednesday I went ahead and did some follow up.

I was pleasantly surprised at the progress I made and also received a game changing suggestion.

Woody Goes to Washington or How I Stopped Worrying and Made It a Federal Case

I went ahead and addressed my developer issues to both of my United States senators:

Senators Durbin & Obama:

As highlighted by the Chicago Tribune’s series of articles this week, mortgage fraud has become a blight on communities on the south and west sides of the city. While this threat is a blight upon emerging or rebuilding neighborhoods, I believe that there is another insidious plague that also threatens the stability of homeownership.

Shoddy or unethical real estate developers can also cause just as much damage to a community as an individual engaged in mortgage fraud. Questionable development of a property may later wind up costing its owners a significant amount of money as latent defects or other oversights are found. Additionally, when the twin specters of mortgage fraud and irresponsible real estate development are combined, it makes a difficult hole for most homeowners to attempt to climb out of.

The paperwork accompanying this letter will point of a few things, the first is that I believe (but cannot yet prove) that our condominium association is a victim of mortgage fraud. It seems highly suspicious that three individuals who are all in foreclosure combined to secure over 24 different mortgages on multiple properties. The on-line records from the Cook County Clerk’s office clearly show that XXXX, XXXX and XXXX are in the late stages of foreclosure due to the non-payment of their multiple mortgages. While these individuals very well have run across a spate of bad luck, it seems to be highly coincidental that the bad luck did not also extended to the mortgage on their principal residences.

Secondly it is clear that our condominium developer, XXXX, neither adhered to laws concerning the electrical wiring of our homes as well as his fiduciary duty to the other owners by allowing a debt that he incurred to eventually be shifted to the association.

You will read in an electrical report that we had done earlier this year that any and all standards for electrical wiring were either not followed so done so badly that the work now results in a fire hazard. The outstanding City of Chicago code violations regarding the porch were never repaired and as a result, the association had to levy a special assessment to pay for new back porches.

In fact the porches have been described by our porch vendor, The Porch People, as “imminently hazardous.”

As an association, there is no way that we should be dealing with these types substantial infrastructure issues three years after initial board turnover. I shudder to think about what may surface in the future.

Currently one of the only ways we a condo association can recoup any monies from our developer is through a civil lawsuit. I quite frankly don’t think that’s fair. Our association does not have the money for long term quality legal representation and what regulations there are about shoddy development have little if any criminal consequences.

In short, in the City of Chicago and in the State of Illinois an individual has more governmental oversight on the purchase and performance of his or her car than the roof over their head.

That is extremely disturbing.

Unethical real estate development can be slowed or stopped altogether if various levels of government enact legislation to either license developers or develop resources to allow interested consumers to check the accreditations or violations of developers. Moreover, sweeping changes in the law crimilizing developers who create a life threatening situation through inexperience or negligence needs to be considered.

Your prompt consideration in these matters would be gratefully appreciated.

Sincerely,


The Woodlawn Wonder

Next on the drop off list, Congressman Bobby Rush, Illinois State Senator Kwame Raoul (don't you love the name) and Illinois Congresswoman Barbara Flynn Currie.

Yup, it's on and poppin'.