Your Member Of Congress Can Help Renegotiate Your Mortgage

If your bank isn’t willing to renegotiate your mortgage, see if your Member of Congress can’t give them a little push. Maxine Waters (D-CA) rings up the C.E.O.s of Bank of America and Wells Fargo on her constituents’ behalf, while Elijah Cummings (D-MD) hired a staffer who’s helping more than 120 constituents avoid foreclosure.

Waters said it’s frustrating. She’s spent more than an hour on hold before, listening to music and getting transferred to different departments.

She said the process can be worse for homeowners who are only slightly behind in their mortgage payments. A grossly delinquent homeowner might get a specialist on the line who can modify the loan, Waters said. But other cases are handled by someone who merely threatens homeowners to pay up.

In at least two cases, the congresswoman said, she wasn’t able to resolve the situation until she appealed directly to the chief executive officers of Bank of America and Wells Fargo. Both banks responded favorably, with Wells Fargo even sending Waters a long letter of apology.

“Trying to contact the servicers is an absolute nightmare for anyone,” even a member of Congress, she said.

Even if your Representative isn’t willing to call a C.E.O. for you, they all have staffers called constituent liaisons whose sole job is to help you out. It never hurts to give them a call and see what they say.

Can’t afford your mortgage payment? If the bank won’t take your call, your member of Congress just might. [AP]
PREVIOUSLY: Bank Of American Puts Congresswoman On Hold For Two Hours
(Photo: jack dorsey)

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  1. Jeff_McAwes0me says:

    You mean to tell me Maxine “we want to Socialize all of your companies” Waters has no qualms about strongarming legitimate businesses? I’m shocked.

  2. H3ion says:

    Now that’s constituent service. Even if it’s only a staffer that makes the call, I’m sure the bank will perk up its ears when it hears it’s a Member of Congress calling.

  3. H3ion says:

    Now that’s what I call constituent service (sarcasm). I don’t mind calling my Congressman to help me with a government problem but why should Members of Congress be getting involved in private business transactions? If I have a problem with my car, should my Congressman jump in?

    • wwahammy says:

      @H3ion: Hmm considering we kept these companies from going out of a business, members of Congress should damn well get involved. If banks don’t want Congresspeople calling them over treating customers like dirt they can do two things: stop treating customers like dirt and stop making terrible business decisions that led them to beg for our help.

    • Damocles57 says:

      @H3ion:
      Part of the role of government is to ensure a level playing field for businesses AND consumers. When business and government colluded to create the type of financial systems we all are forced to live with – and in which we all suffer now – then government does have a role to play.

      Many people who did all the right things are affected by having their homes devalued (they were not flipping or scamming), or their 401K’s decimated, or their pensions evaporated, or who lost their jobs because the market took a major down-turn.

      So, yes, it seems appropriate that our elected officials who make the rules for businesses and consumers should play a role in untangling some of the snarls they themselves helped create.

      • ICherub says:

        @Damocles57:
        The role of government is to pool resources to provide public works for the general good (streets, police, military…) and to protect the innocent and weak (legal system, military again, etc.). “Leveling the playing field” never came into it until liberals decided to tinker with society “for our own good”.

        • Damocles57 says:

          @ICherub:
          Part of “leveling the playing field” is to protect the innocent and weak that you mentioned. Part of the role of government is to maintain a monetary system (such as it is).

          The roles of government – and the roles of members of society – are constantly changing. The world we live in now and the government we have (for good or bad) have evolved to fill different roles and expectations that the original founders could not have forseen.

          Often, liberals AND conservatives have tinkered with society to meet the demands and expectations of the many members of society. And liberals AND conservatives have made exceptions to general rules for their special constituencies.

          And now, for the circumstances we now find ourselves in, it seems appropriate for the government to champion the cause of the innocent and weak against the large, powerful, and not-so-innocent financial markets that created the house of cards that is now falling.

        • reddline says:

          @ICherub:

          Okay, spare us the liberal/conservative bullshit, please?

          Tell us where ideology gets you when you’ve been laid off from a job and you are trying to keep your home. I was laid off two months ago and I have been looking for a job and collecting unemployment since. Meanwhile, my friends at Countrywide/Bank of America say that they can’t help me unless I am BEHIND on my mortgage. Where’s the logic in that? If a call to my congressman could even get me on the radar for some help from my lender, I’d be dialing his office on TWO phones.

          • H3ion says:

            @reddline: We have a friend who lost his job. Mortgage was current but he really needed some relief from the monthly carry. Lender was HSBC. We asked them to do a mortgage modification for one year so he’d pay interest only and then extend the mortgage another year to make up the principal abatement. They agreed. You might want to try offering something similar. Also, sometimes walking into the branch in person and talking to an officer can yield better results than a phone call. Good luck.

            • H3ion says:

              @H3ion: One other thing. If the mortgage goes into default, they have to show it as a non-performing asset. It’s in their best interest to keep the mortgage out of default. A win-win situation and they don’t lose a dime.

            • reddline says:

              @H3ion:

              Thanks. At this point, I’d take a good paying job over a refinance!

              Believe me, I’ve run the gamut thus far. I’ve tried phone calls, office visits…hell, if I needed to chain myself to a desk there, I would.

              Coincidentally, today was the first time I had a good experience with BofA. Just about every time I log onto their mortgage website to make a payment, I get bombarded with refinance offers. I’ve also gotten them in my e-mail and regular mail. On Friday night, I went on their website and filled out an inquiry for one of their refinance offers–for about the third time. Once again, I told them my situation in the comments area of the inquiry and this time, someone actually called me back and offered some semblance of help.

              I was told by one of their mortgage reps that the second phase of the Making Home Affordable plan (through the stimulus) is supposed to be rolled out at the end of this month. Now, whether or not that will help the rest of us (those who aren’t with Fannie Mae or Freddie Mac), remains to be seen. The BofA rep was pretty optimistic that is what is going to happen, but who knows?

              The only thing I can do is keep an ear to the ground and keep plugging away at them.

    • floraposte says:

      @H3ion: If businesses and industry can ask them for consideration, private citizens should have the same prerogative.

  4. Siegeman says:

    I really appreciate reps who take helping their constituents seriously. We gave these companies billions of dollars to help homeowners, and as long as they refuse to do just that, our congress people better keep pushing those buttons, even if they’re only on the telephone.

    Wonder if my old rep Rosa DeLauro does this sort of stuff…

    • Trai_Dep says:

      @Siegeman: I think some here are simply stunned that they can get their Congressman to do something without having to fly their Congress critters to Scotland for ultra-lux golfing vacations first.
      Y’know, actually representing their people because it’s their job. That they do happily and on their own initiative.
      I simply think that if they’re that shocked, they really need to switch parties.

  5. SacraBos says:

    To those thinking it’s a government strong-arm thing, look at in the way of a Federal Trade Commission thing. The banks are providing you a service, and they do offer assistance. However, if they are simply giving you a run-around and bad service when it’s about your largest asset purchase, they need to up their game. If they don’t have any “products” (Sorry, but calling a set of funny rules for a type of account a “product” sounds silly to me) to convert them to, that’s one thing. But dropping calls, leaving you on hold for 60 minutes, CSR’s that don’t know what they are doing, … yeah, that’s worth a call.

  6. WiglyWorm must cease and decist says:

    I don’t understand why these banks don’t realize it’s in their best interest to renegotiate on loans that are going to default.

    Just as an example: I recently bought a house. It is in a very nice neighborhood, with good schools, and has a good ammount of floor space. It probably sold for around $160,000 to the last owners. They defaulted, and the bank put it on the market for $140k. Over the long time of being unnocupied, the roof sprang a leak. The house was taken off the market for a couple days, the roof was tarped off and the house inspected. They put it back on the market for $120k. It sat for about 6 more months and I came along and lowballed them, and got the house for 100k, with 6% going to closing costs/down payment. So they only got ~$94k for a house which A) they had to spend money on (they would never have to if they hadn’t foreclosed) and B) they would have been getting a steady stream of income off the interest payments, which would have totaled to more than they made from me (even if they hadn’t had to pay to repair the house).

    • henwy says:

      @WiglyWorm:

      Wait a minute, how do you know that they would have gotten more if they didn’t foreclose? They were probably getting no payments whatsoever by the time they chose to do so. If the person couldn’t pay X, what makes you think they could pay half of X either? It’s very likely the bank got 94k back that they otherwise might not have gotten even less for if they had waited. It’s very unlikely someone who couldn’t pay their mortgage was going to spend lotsa cash on home repairs.

    • Skaperen says:

      @WiglyWorm: There was a story on a TV network … I forget now which one but it was one of the broadcast affiliate networks … about a town that was being proactive about keeping bank-owned vacant homes up to code and other rules. They were threatening the banks with fines for failures, and eventually accomplished their goals.

      What’s so funny is that the banks were entirely unwilling to make these fixes on their own, yet once they did fix them, the houses in this town were selling better at prices higher by a few times the money they spent making the fixes. Basically the conclusion is that these banks are just unable to do the right thing (unless forced to), even when the right thing even brings in more money to the bank. Is it because of the bureaucracy in the bank? Clueless management? Executives that are out of touch? Probably all of the above.

    • SacraBos says:

      @WiglyWorm: There was a documentary on debt in America I saw on cable a few months ago (can’t remember the name). It was made before the collapse of these “toxic loans”. A lady has a presentation about how banks could save a lot of money by making few riskier loans. When she gave this to a bank, the bank president asked he why should he do that since he makes more money on a foreclosure than on a regular loan?

      This is the real problem, the banks make more profit on a foreclosure, so having a certain percentage of foreclosures is a profit center. The only problem, is if that percentage gets too high, then it becomes a nightmare. “Skating on thin ice” is a phrase that comes to mind. It’s an unsustainable way to operate, and making these “toxic loans” were standard operating procedure. Now, when they get in trouble for it, they whine to the government for help. They should have been allowed to bankrupt.

      • econobiker says:

        @SacraBos: There is also a group of folks who maintain that banks make more money on the foreclosures both due to the foreclosures and by sub-companies owned by the banks which manage the road down to foreclosure as people get behind and try to work it out or get current. These folks say that banks want people to get behind so that the sub-company can charge more fees etc to the borrower.

  7. Trai_Dep says:

    I’d like to call Senator McCain. Just so I can hear him in his quivering, crotchety-man voice:
    “Just sell on of your 13 – or is that 30 – houses. Oh, my best pal and advisor adds, ‘You’re a whiner!
    Gosh, so sad he’s not running the whole damned nation. We’d be in such better hands.

  8. I Love New Jersey says:

    Sounds like a typical strongarm operation.

  9. HiPwr says:

    I’d like to call Senator Kerry. Just so I can hear him in his quivering, crotchety-man voice:
    “Just sell on of your 13 – or is that 30 – houses. Oh, my best pal and advisor adds, ‘You’re a whiner!”
    Gosh, so sad he’s not running the whole damned nation. We’d be in such better hands.

    • floraposte says:

      @HiPwr: Wait, Senator Kerry hired Phil Gramm? When was this?

      • Trai_Dep says:

        @floraposte: Right after he pushed, and pushed hard, for the entire financial sector to be deregulated with no oversight, d’accord.
        Shame, that, being that 80% of the toxic assets were created while President Kerry was in office. But on the bright side, we took the Wind-Surfing Gold in the ’08 Olympics, so it’s a wash.

    • morlo says:

      @HiPwr: Those are his wife’s houses

  10. xkevin says:

    I think this skates the ethics line. Its one thing for a politician to get a pot hole repaired, its another for them to renegotiate a contract resulting in you saving money. This brings buying votes to an entirely new level. Quite sickening…

    • reddline says:

      @xkevin:

      But it’s okay for large corporations and lobbyists to push congressmen and women for tax breaks and such, huh? Does that make you as queasy?

      • xkevin says:

        @reddline: Its easy to blame the corporations because no one wants to take personal responsibility. Ever hear the saying, “It takes two to tango?” Dumb money shouldn’t have been there but that doesn’t mean the people taking it aren’t just as guilty. The “I didn’t understand the terms of the mortgage” cry is getting real old. Fact of the matter is if you were willing to spends hundreds of thousands of dollars on a home, you should have been willing to spend a thousand dollars for a lawyer who specializes in real estate to represent you. If that means having to forgo your stainless appliances, granite counter top, HDTV, or whatever else thats not heat and hot water – so be it.

        A mortgage loan is essentially a contract whereas the borrower agrees to repay a loan secured by property. I have a huge problem with politicians using their influence to adjust the terms of the mortgage loan to favor the borrower for numerous reasons. First, the agreement is between the borrower and the holder of the loan – two private parties. There’s no reason to make it a public issue. Second, if you’re going to intervene for one then you have to intervene for everyone since your job as a politician is to serve all your constituents, not some. This opens a huge can of worms. Why not modify the loan of borrowers who are current? Its not fair to them to pay “full” price when their neighbor is getting a deal.

        • Skaperen says:

          @xkevin: I can agree that if you intervene for one, you have to intervene for all. But I don’t agree about the contract issue.

          The banks are operating in a pattern of stupidity here. It harms everyone. It harms the bank. It harms the borrower. And it harms the public (when the scale of this gets large, as it has done over the past year or so).

          The borrower is going to fail and default under the current contract. But under modifications they can see it through and not fail. It’s called “negotiate a new contract”.

          The reason for the intervention is that the BIG banks are run so badly. Partly it’s the bureaucracy. You cannot reach people who have any real responsibility to make decisions and have enough of a clue to realize they are saving an account from defaulting.

          Sure, the bank BELIEVED they could make more money from these people when they made the loan. It turns out they can’t. But they have it in their power to avoid the big losses of having to foreclose and short sell the house at a loss, after it sits on the market for a while, in a bad housing market.

          The intervention is NOT an issue of forcing the bank to do something that favors the borrower. Rather, it is an issue of working through the DAMNED BUREAUCRACY to get to someone who can work out a way of doing something that favors everyone (the bank, the borrower, and the public).

          Yes, I blame the corporations. Sure, there are a lot of people who did not act responsibly. But not all borrowers fit that situation. And in BOTH cases, working out a modification is still good for the bank AND the public.

          There has been a lot more CORPORATE irresponsibility going on for the past many years, and STILL goes on even to this very day (one area is continuing to have a bureaucracy that functions so poorly as to actually be harming bank by driving up the default rates).

          • xkevin says:

            @Skaperen: There are ramifications to renegotiating a mortgage loan, its essentially a spiraling effect. For instance, many are securitized meaning principal and interest is pledged to some kind of debt instrument whereby the payments flow through to the investor. In many cases, these are fixed rate bonds paying semi-annual or monthly debt service. It is important to note that most (if not all) bond indentures need 100% bondholder approval to make amendments. Now, if the loan that is paying the bond debt service is modified, there may not be enough money to pay bond holders. If this happens and the trustee is unable to pay, it will default.

            You can argue that if a person stops paying their mortgage all together, the end result would be the same and you’d be right. However, the devil is in the pool insurance policy (if present). If the policy doesn’t cover gap (the difference between the original and the renegotiated amount), the servicer isn’t going to renegotiate because they’ll recoup the money from the insurance company and avoid a bond default.

            @reddline: I’m sorry you lost your job.

            Yes, Fannie Mae, Freddie Mac, and Ginnie Mae have a government guarantee or an implied government guarantee. In most cases you have to meet certain qualifications to qualify. There is no free lunch, in most cases the cost of the guarantee is paid for by the mortgager since its padded into the interest rate of the mortgage loan. Fees vary but its typically 50 basis points or higher.

        • reddline says:

          @xkevin:
          Why not modify the loan of borrowers who are current? Its not fair to them to pay “full” price when their neighbor is getting a deal.

          Wow, you know, that’s the same question I’ve been asking for the last two months that I have been without a job. I got in contact with my bank the day I lost my job to find out if there was any kind of modification that could be done in my case. According to the Making Home Affordable Plan through the U.S. Treasury, that plan is for people who are facing a financial hardship through a layoff, reduction in pay, medical hardship, etc. The guidelines are on the Treasury website. However, my lender said they could not help me because my mortgage was not serviced through Fannie Mae or Freddie Mac. The only other way that they would help me is if I was behind on my payments, which I am not.

          That being said, if the government’s stimulus package is supposed make money available to help homeowners, why do homeowners with obvious hardships have to jump through so many hoops to get that help? Just like I said in a previous post: if I knew for sure my congressman could help me with this issue, I’d have TWO phones calling his office.

          Speaking of the U.S. Treasury and what a mortgage loan is, I guess loans from the FHA and other similar entities are guaranteed by some phantom party? No, they are guaranteed by the government. So, since we are taxpayers, that does make it a public issue, doesn’t it?

          Now–as far as this “dumb money” is concerned, true, there are people who got in over their heads, there is no disputing that. However, not everyone falls into that category. Most people actually did the responsible thing and bought homes they actually could afford, without getting into something they couldn’t understand. However, I’m sure most people could not see a job loss or other hardship coming their way.

    • Megalomania says:

      @xkevin: just because you don’t like the idea of politicians exerting influence on the minute details of day to day operations of corporations doesn’t mean you’re a fan of corporations pushing Congress to abuse its power either.

      Frankly, this sort of thing rankles for two reasons – first, there’s no way that a senator or congressman can do this for all of their constituents so ultimately they’re wasting time that could be spent trying to help EVERYONE they represent. Second, why should it matter to a company that suddenly you have ‘a friend’ in the legislature? You wouldn’t find it fair if someone got an advantage over you because they knew someone in congress, so why is it okay when it can help you for once?

    • econobiker says:

      @xkevin: If businesses can lobby corporations for tax breaks, eminenant domain, employment training credits why can’t a consumer do the same. If I understand it most companies are making it extremely difficult for a consumer/mortgage holder to get in contact with the work out departments. So why shouldn’t a consumer use all the resources available to them?

  11. Ben Edwards says:

    @H3ion: Damned if they help, damned if they don’t help.

    Sounds like the system works yet again.

  12. ennTOXX says:

    i think the biggest “joke on you” was “we the people” allowing “our” government to bail out these banks.

    seems to me that these companies double dipped and at this point have nothing to loose.

    common sense tells us, when your neighbors hurting you’re hurting.

    when did people stop being AMERICANS and start being CORPORATIONS?

    my parents and grandparents tell me stories of the olden days when “we the people” actually meant just that and the government was afraid of it’s people, not the other way around…

    • floraposte says:

      @ennTOXX: They’re called “stories” for a reason, though. Not sure what days your family is referring to, but companies have always wielded a considerable amount of power. When the government did fear people, it was usually because the people were rich and owned companies.

    • Megalomania says:

      @ennTOXX: when you say “government”, and “afraid of its people”, it makes me fairly certain you’re getting your beliefs from V for Vendetta.

    • Trai_Dep says:

      @ennTOXX: Well, back then, The People smelled pretty badly, you see. So the government was somewhat justified in fearing them. Especially when they were downwind.
      …And they didn’t use contractions properly. An ungrammatical people is a feared people.

  13. esd2020 says:

    What if your Congresswoman is actually a non-voting delegate?