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MHA Loan Modification - A Joke! posted - July 13, 2010. The first thing I see about the government loan modification program is that it is a complete joke! Making Home Affordable ("MHA") modification program in my opinion builds false hope. Many of the large financial institutions have a 1-800-###-HOPE hot line alerting people to Loan modification scams, when in fact they are the very ones leading them down the wrong path. Consider the case of Joe; he noticed in February 2009 that his lender was advertising the MHA program. Joe had lost 50% of his income at the start of housing crash and started experiencing some rough times. He had choices to make in regards to what accounts needed to be paid, keep a roof over his family, and sacrifice other accounts or do the opposite. Joe applied with his lender in February 2009 for a loan modification by completing all the necessary paperwork. Joe was led to believe that as long as he kept his loan current, his submitted MHA application would be processed as soon as they integrated their system. Joe had built up a reserve account for rainy days, and so he started using funds from this account to pay creditors, and his high mortgage note. Joe called his lender every month to follow up on the process, and each time he would get the same answer, "Please call back in 30 days, we are still working on integrating our system." or "We are still waiting on the go ahead from the Obama Administration." This went on for nine months until Joe exhausted all of his reserve account. He finally realized through bank representatives that submitted applicants with current loans were not being considered and that in fact his loan needed to be delinquent in order to get any kind of assistance. Here is evidence that Joe was deliberately given false hope and lead along by empty promises. At this point, Joe could no longer continue making the high mortgage payments, and informed the bank that he was at the end of his rope and they could have the house. There was no other recourse; he could not afford making any more payments. Shortly afterwards, Joe started receiving phone calls and correspondence from his lender with language such as: "Your house is your home. We want to keep it that way. We need to talk call …today." Then there is the case of Jennie, a school educator, who through no fault of her own suffered a financial set back when she lost her job due to the economy downturn, and as a result also fell behind on her payments. Jennie called her bank and notified them of her situation in the hope that they would work with her to find a way for her to keep her only home. Jennie was led to believe that it was all possible, even to the point of qualifying for the loan modification program through her bank for the three-month trial (the initial step in the loan modification process). The bank had agreed to put her in the LMP and provided her with a payment structure for three months. Remembering when we talked about false hope earlier, Jennie ’s problems did not end there. After making the first two initial payments, her bank rejected the third payment without giving any explanation.

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