Dispatch from Foreclosureland

Flickr/respres (Creative Commons)

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


In August, I wrote about the Obama administration’s flawed $75 billion homeowner rescue effort, the Home Affordable Modification Program, and therein introduced readers to Florida homeowner Kristina Page. Page’s mortgage company, Saxon Mortgage Services, first told her it hadn’t heard of HAMP. Then, when Saxon finally admitted Page into the program, it lost her paperwork and told her multiple times to send more copies of the same information even though she knew the name of the employee who’d signed for the originals.

Page eventually made it into HAMP’s trial period, a test run during which she had to make to three lower payments on time to qualify for the permanently lower, more affordable payments. After the test run, Page’s mortgage company, per HAMP’s guidelines, re-examined her financial information and recalculated what her permanent mortgage payments would be. Here’s where, like so many other homeowners, Page ran into trouble. “As I feared,” she recently wrote me, “the permanent payment is much higher than the trial period estimate payments.” On the face of it, her new monthly payment will be $40 less—hardly much help when you consider the mess Page’s been through to participate in HAMP.

It gets worse. Here’s why, in Page’s own words, Saxon gave her higher—and as it turns out, incorrectly calculated—HAMP payments:

I couldn’t figure out how they had our income so high, so as I told you I contested the numbers. Saxon called this morning and I explained my problem. [The Saxon employee] checked into it and called me back with this gem. She said, “The extra income is because there is a letter in your file stating your sister Samantha will be contributing $1300 per month toward your household income”…I am an only child…I don’t have a sister Samantha or any other sister. She [the employee] apologized profusely and even said, “This is all our fault”…I almost dropped the phone.

Page’s case illustrates the biggest issue with HAMP. According to recent data released by the Treasury, there are nearly 730,000 trial modifications underway right now, but only 31,000 permanent modifications have occurred so far. HAMP is worthless if it doesn’t result in permanent modifications for homeowners; those homeowners who go through the trial period but don’t get lasting help are left with wrecked credit scores and the same unaffordable mortgage as before. Meanwhile, foreclosures continue to reach record levels and the housing crisis shows little sign of abating. The Congressional Oversight Panel, led by Elizabeth Warren, got it right when it concluded (PDF) in October that it “increasingly appears that HAMP is targeted at the housing crisis as it existed six months ago, rather than as it exists right now.”

It looks highly unlikely, though, that Congress or the Obama administration plans to change its approach to tackling this crisis. Congress shot down the option of “cramdown”—allowing judicial modification of mortgages in bankruptcy court—with its recent financial regulatory legislation, and the Treasury continues to stand behind its losing program. At this rate, the effects of the foreclosure crisis may stretch out a lot longer than many of us expected.

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

THE TRUTH IS...

what drives Mother Jones' team of 50-plus journalists. The truth is powerful, as evidenced by how hard those with something to hide, or profit to gain, seek to discredit it. The truth, stated boldly and reported meticulously, is what draws so many readers to Mother Jones.

And the truth is, going into the final 4 days of the year we still needed to raise $TK to hit our $350,000 goal and start 2021 on track. It's nerve-wracking, wondering if the big spike we normally see at the end of December is going to be another thing that doesn't go as planned in 2020, or worse, if, now that Donald Trump is set to leave the White House (for longer than a taxpayer-funded golf trip to a property he owns), folks might be pulling back from fighting for the truth and a democracy and think the hard work is done.

It's not, and if you can right now, please consider a year-end donation to support our team's fearless nonprofit journalism so we can close that big fundraising gap and finish the year strong, ready for all that's ahead in 2021. Whether you can give $5 or $500, it all matters in keeping us charging hard, and we'd be grateful.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate