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Are HAMP Loans a Scam?

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Because Cossitt Law has seen too many struggling Montana homeowners come through our doors, it is important that we alert the public to the massive fraud in the HAMP and other loan programs that big banks, most notably Bank of America, are pushing on the public. Clients on the brink of foreclosure or bankruptcy come into our office hopeful about the loan modifications they have been offered and we urge them: Buyer beware.

The HAMP loan programs offered by big banks like Bank of America are nothing more than window dressing used to lure distressed home owners in the door only to pull a bait and switch, leaving homeowners with higher interests rates, or worse yet, in foreclosure.

This was not the purpose when the government developed these programs, however, banks seized the opportunity to scoop up more money while providing no relief at all.  A headline in a recent NBC News story sums it up: “Bank of America former employees: We were told to lie.” The story goes onto detail Bank of America’s:

“systematic efforts to undermine the HAMP program by routinely denying loan modifications to qualified applicants, withholding reviews of completed applications, steering applicants to costlier in-house loans and paying bonuses to employees based on the number of new foreclosures they initiated.”

Another related story in ProPublica details how loan services working for a subsidiary of Goldman Sachs lured borrowers in through the HAMP program, then lost their paperwork, never followed up on documentation and made errors that caused HAMP applicants to be denied. According to the article, as of 2010, fewer than 12 percent of the borrowers who’d applied for a HAMP modification with the Goldman Sachs subsidary were granted one. Many of those denials were not legitimate.

This quote from the ProPublica article sums up the scam:

“Goldman Sachs’ emphasis on maximizing profits rather than preventing foreclosures is typical of the servicing industry, particularly the larger banks.”

We urge distressed homeowners to contact Cossitt Law immediately to discuss their options. Don’t wait to get help, once your house has been foreclosed on, we can’t help you get it back.

For more information on the HAMP foreclosure scam check out these articles:

NBC News: http://www.nbcnews.com/business/bank-america-former-employees-we-were-told-lie-6C10351458#bank-america-former-employees-we-were-told-lie-6C10351458

ProPublica: http://www.propublica.org/article/excerpt-at-goldman-sachs-servicer-total-disaster

 

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