'Hope Now' Hot Line Frustrates Borrowers Needing Help Now

Posted by: Prashant Gopal on March 14, 2008

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A telephone hot line run by the Hope Now Alliance, a public-private partnership launched by the White House in October as a lifeline for homeowners facing foreclosure, appears to be leaving many callers more frustrated than hopeful.

The hot line’s counselors are supposed to help connect borrowers with lenders and try to work out loan modifications.

MSNBC’s John W. Schoen reported March 13 that a story about Hope Now generated hundreds responses, including complaints of “long wait times, lack of follow-up and relatively minor loan modifications that have failed to help.”

Kathy Turnbaugh of Altoona, Pa. wrote in an e-mail to MSNBC: “I spoke to someone there, and they promised to get back to me and haven’t… That was on Feb. 23. It is now March 6, and I still haven’t heard from them. My house is scheduled for a sheriff’s sale on April 9 … I need to save my home, but don’t know where else to turn.”

Reader Comments

STEVE

March 27, 2008 10:57 PM

THERE NOT GOING TO HELP YOUR NOT BEAR STEARNS ALL YOU CAN DO IS WISH THEM ALL CANCER THEN LET GOD HAVE AT THE CROOKS BUSH WHAT DOSE HE CARE HE HAS A HOME

Joe

April 3, 2008 11:50 AM

There are a lot of misconceptions about the Hope Hotline. First of all, it has been in existence for almost 8 years. President Bush did not start our service, but he is trying to bring more people to it for help. The service you are reaching when you call 888-995-Hope is a free housing counseling service to help people explore options and get connected to any available resources. No one in our organization is promising to get your loan modified. That is up to your mortgage company and we are here to help you with that push if that option seems like the best one for you. It is sad to say that there are a lot of people who just cant understand what they got themselves into and are also not realizing how mentally and physically sick they are making themselves fighting through a hopeless situation. We have the task of trying to help these people understand that they can recover and improve their quality of life. A lot of times that means getting out of the current situation into a new one. The bottom line is that we are here to help in any way possible.

Hugh

April 6, 2008 5:34 PM

I believe the Hope Now plan wil work, but only for a very few. I have a mortgage currently at 9.25% The rate is exorbitantly high and will adjust higher in two years. Hope now put me in contact with my servicer and they moved very quickly on my case. I actually thought they were going to help me, then they called and told me I made too much money. Well, I have been working very hard to afford my payments so , naturally I have made more money. The problem is that my home value is more than $100,000.00 less than the amount of the note. If I walk away, add $50,000 to that to forclose and the investors take a $150,000 hit. So why would they not want to cut my 9.25% rate to say 6 or 7%, eliminate the rate adjustment and get their payments on-time every month for the life of the loan? The problem with hopenow and every other "cooperative" effort to save homeowners is that the servicers and investors don't want to give up any profit, not one dime, in order to help strave off this crisis facing our entire country. Until they are willing to meet homeowners in the middle with a "win-win" attitude, the forclosure crisis will continue.

Cherie

April 11, 2008 10:42 AM

I recently called the "Hope Now" hot line in hope that they would actually have some kind of logical solution to our problem. We're in trouble because I lost my job, so we lost 1/2 our income. My husband still has his job but it doesn't pay enough even with him working 15+ hours of OT to live on here in MA. The people at Hope Now told me our best option was to try to sell our house before we lose it and move someplace less expensive to live. When I pointed out that my husband, who is a factory worker, still has a job here and that we could not afford to rent because local rents are more than our mortgage, I was told again that we should move someplace less expensive where both my husband and I might stand a better chance of finding new jobs. I mentioned that we were both over 50 and starting over in a new place where we wouldn't know anyone would be a hardship for us. Finally I was given the name and number of 2 agencies in MA, neither of which was in my local area, and told to call them to get help with re-homing. I did call both and even though neither could help us because they weren't in our area, through them, I did eventually get connected with the group in my city that should have been provided to me by Hope Now in the first place. Unfortunately they don't deal with re-homing people either, they try to help people work with their lender. They were able to provide me with some other contacts to try to help us sell our house before we lose everything. Regardless of if we manage to sell the house and walk away with some money or the bank takes it and we lose everything, we still have no place to go.

Debra

April 22, 2008 4:01 PM

Very well put Hugh. That is my experience as well. The banks can't seem to step back from their business as usual perspectives to rationally deal with the situation that is now unfolding. And unfortunately, Hope Now doesn't seem to have either the authority or the influence to be of real value, and seems to be little more than a referral service designed to give the mortgage industry some appearance of credibility in their current public relations crisis....How did the writer put it " full of sound and fury; signifying nothing."

Robert

August 15, 2008 4:59 PM

I work for a company that has an 800 phone number close to the Hope Now number, sometimes all 8 incoming lines are full of Hope Now callers. I know the volume of people out there seeking help.

I am friends with a person who has her own mortgage company, she use to do 2 to 3 loans a month, now 1 loan every 4 to 5 months. She receives probably 2 to 3 calls a day from people needing home loans, however, unless it is a new purchase, the home will not appraise for more than what is currently owed. People are given the false impression that housing values have dropped only 20% in value or so, that is just someone's fantasy.

My home was purchased for $208,000 (a distressed price) in 2000. After a new roof, new windows, new furnace, all new baths, all new doors, new kitchen and appliances, all new floors through out, it appraised for $280,000 in 2006, Today its valued at $170,000 in Troy, MI, an area supposedly only lightly effected by the price pull back, a 40% price drop! What can Hope Now do for people with this problem? Any Realtor or Appraiser will tell you Foreclosures are driving the market.

Point is, nearly everybody is upside down today and the value of homes are primarily being driven into the ground by Foreclosures. Many homeowners are either in Arms that are re-setting or were re-financed into fixed mortgages that had 5 yr. balloons. Now here in Michigan, unemployment is another major factor.

So what is a person to do...? You need a stronger credit score to qualify for a home loan today, your home will not appraise for its debit, you or your spouse or both are either working less hours or unemployed, your not getting raises, and your paying more for everything.

Just how is Hope Now going to help??? To quote Jim Creamer "They have no clue!"

The Banks can and will absorb these losses, and it appears they want to. They may cry a little, but in the long run, they are the only element in this equation that can do anything to cure the problem. They do not want to or they would have already done something. They would rather pay Trott & Trott piles of money to foreclose and then offer foreclosed properties for as little as $1.

Mary

October 22, 2008 4:53 PM

HI: Well, I see today in the paper that a couple who are in foreclosure (Indymac) have successfully reduced their mortgage payment from $3000 to $1200 for five years. They can stay in their home. Evidently they signed a new agreement with Indymac.
I've owned my home for 30 years and I'm now five months into foreclosure. Sure hope Citimortgage can reduce my payments for five years. But after speaking with a rep from Hope Now, I doubt it. Good luck to all of you out there. Mary

Beau

November 21, 2008 11:32 PM

I work as a Hope Now counselor. Joe & Hugh, very well put. And Mary, thanks for that input as well.

The fact is we (at the Hope Line) don't know what the mortgage servicers are going to do. All we can do is make recommendations on their customer's behalf to the servicer and hope (no pun intended) that the servicer sees it as reasonable. We are in exsistence to educate people on possible solutions and to get people to talk to their servicer instead of keeping their heads in the sand.

Many people calling the Hope Line have no idea what they got themselves into concerning their mortgage(s). They are looking for money or for me to pull a rabbit out of a hat. The basic financial education in this country is sorely lacking. They are in a home that couldn't be afforded in the first place, and now wonder why their mortgage company won't help them. Is that their fault or the banks? Probably both, but the fact is they could have seen that their payment at the outset was already 50% of their income, and they new it would reset later down the line. The thinking was that they could just refinance later. Into what? Very little equity if any was acheived. They unwittingly fell into the speculator mentality. Short-selling and even a deed-in-lieu are better than being foreclosed upon. They can be forgiven of debt they should not have gotten themselves into in the first place.

But some people through no fault of their own have lost jobs and are facing a financial crunch on a home that they could afford. Hopefully (no pun intended again) their situation is short term. They got behind 3-4 months or longer, and the new income now may be less. They just need to get caught up and with a somewhat lower payment going forward. This is ultimately who can be helped.

Daniel

December 10, 2008 3:37 PM

Hope Now was not help at all. They simply refered me to consumer credit counseling who said they could help me make a budget. I have a budget, the problem is that my wife lost her job and our income went down significantly. I am in the situation that the last paragraph of Beau's post describes. Seems Hope Now is useless.

dusty

December 10, 2008 4:25 PM

The marketing for HopeNow is misleading and seems to be setup so that those who made a killing in the housing market can feel better about themselves and lie to the general public about what they are doing to "help".
I am in the same situation that Beau and Daniel describe. I am an educated professional that has been working in the my profession for more then 20 years. The business I work for, laid-off over 1/2 of their workforce, and I, among many others, have no job.
In normal situations, when I am working, we do great. However, I have been unemployed longer than I have ever been in my life. Now with the current situation with the economy and the jobless rate through the roof, we need a break on the house payments or a significant reduction of interest rate for about 1 - 2 years to allow for the economy to recover, and get ourselves back on our feet.
What happened to that $170 billion bail out we gave the loan industry? You know, the one we all will be paying $5000 a year for the next ten years to pay off so we can save the loan industry?
Is this what we get for our money? Creditors who wont work with us?
So let me fully understand.... We [American people] bail out the banks and loan brokers and they piddle on us? We reward lairs, cheats and the greedy with billions?
If any of us pulled a similar stunt, we would be in prison and not collecting billions of dollars.

Hope Now Counselor

December 13, 2008 1:18 PM

To clear up any confusion, the $700 billion bailout, although set off by the housing crisis, never promised any relief to homeowners. This is just another case of government throwing money at a problem without any restrictions. The government failed to rectify the root problem and this may have been one last attempt to rob us before a new administration takes control. If the government had any sense, they would have set up programs beginning no later than one year ago that would have bailed out the homeowner first. They could have given the money to the lenders based on a case by case basis where homeowners were brought current and loans were successfully modified. Instead we have banks using the money to buy up other banks, offer “retention bonuses” to people who are lucky to have a job, and for the purpose of funding corporate junkets.

It’s a shame that although this money was literally handed to the banks, the senate is giving the auto industry such a hard time. Fallout of the auto industry will eradicate up to 5 million jobs. If you do not think that this would have some sort of an impact on you, you are in for quite a surprise. The effects will not be limited to the Midwest and will shock all industry. What will happen to the banks if 5 million families can no longer pay for their homes, cars, or credit cards?

Hope Now Counselor

December 13, 2008 1:19 PM

If you are unemployed, what you need to be requesting of the lender is a hardship forbearance. This is a period of time where the lender may be willing to suspend or reduce the payments.

This is an unfortunate economy and many are facing a double whammy of job loss and a horrible housing market. I sincerely hope that everyone looking for work is able to secure employment but it is rough out there. Take a look at your resume. Make sure that it is a good representation of your best qualities. You need to stand out; sometimes you are competing with hundreds of applicants for a single position. A resume should be grammatically correct; no more than one page in length; provide specifics, and should further be aesthetically pleasing. If your resume is lacking in any of these areas, a potential employer may toss it directly in the waste basket.

Once income is reestablished, a loan modification may be appropriate to reduce the interest rate, change and ARM to a fixed, rework the arrearages back into the loan balance or place them on the tale end of the loan.

Further, some lenders are putting a moratorium on foreclosures for clients that may qualify for a loan workout. Ask about this.

Another problem is that clients do often have unrealistic expectations. I regularly talk to people that have a monthly budget deficit greater than their mortgage payment. How is the lender going to help these people? Even without any mortgage payment, these people couldn't afford the other responsibilities that they took on. What do they want? Do they think that the lenders should pay you to inhabit the property?

Some people are not willing to cut expenses or try to increase income. They want someone to wave a magic wand and make a $400,000 home affordable on a $60,000 annual household income. There is no magic workout or loan that is going to make this feasible. It is a crime that lenders even approved people for these loans in the first place.

Sometimes talking to a bankruptcy attorney to get out from under some of the unsecured debts will help so that more money can be applied to the mortgage. Be careful, sometimes a bankruptcy may restrict a mortgage lender’s ability to work with you. You would want to talk your the bankruptcy attorney and or the trustee about this.

Hope Now doesn’t promise any loan modification or that you will be able to stay in your home. Sometimes this just isn’t the best option for a client and this is sometimes hard for a client to take. I had a family that was spending $60 a month on groceries, eating mostly Ramen Npoodles to survive. Their Mercedes was parked in their driveway because they couldn’t afford to gas it up. They had a $2000 monthly budget deficit and they were using credit cards to get by. Even if you had the nicest house on the planet, how could anyone be happy in this situation? This young woman was able to see that it may be best to further explore some non-retention options and looked forward to minimizing the stress that was created by trying to hold onto the home.
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Sometimes we have to deliver advice that someone doesn’t want to hear. It is not the most pleasant situation for the client nor the counselor. I for one, try to handle this very sensitively. I try to paint a picture and be honest and realistic with my clients. In many cases, clients are actually appreciative and enlightened by the difficult conversation.

I am a very humbled counselor because I personally know four families that have lost their homes in the last six months. I understand that everyone is vulnerable. Unless you have a hefty savings plan, we are all one illness, one job loss, or one crisis away from loosing our homes.

James

March 16, 2009 11:59 PM

Even though billions of dollars already have been allocated to the Foreclosure Crisis, experts are estimating that Foreclosures and Bankruptcies will hit record numbers over the next year.

Does anyone ever wonder how 350 billion dollars disappears and no one goes to jail? Something is definitely wrong when banks have to be told not to go on spending sprees with the tax payers money. Americans nationwide can no longer rely on the banks to do what is in the best interest for home owners or for this country.

So what is the protocol if a home owner thinks that they might fall behind on payments? Industry standard suggest to CALL YOUR LENDER immediately. Though millions of dollars have been spent on marketing and outreach tho connect lenders with home owners, studies show that approximately 50% of the home owners do not even get to the negotiation table to discuss a workout with the lender, while the other half call a nationwide hotline that routes homeowners right back into another bad loan.

Many home owners call the loan officer or mortgage company that sold the homeowner on the loan. The problem with this is that the industry of Real Estate and Mortgage professionals have not really every experienced Foreclosures or Loan Modifications on this large of a scale or even at all. National Industry Standards should be set and approved by the Department of education.

One attempt to break this destructive downward spiral was to have Government Owned Corporations (GOC) like Fannie Mae and Freddie Mac to take control. This failed when lenders had to protect the interest of their investors without taking into consideration the home owners ability to pay. Other options that may have been overlooked are the roles of front line counselors and legal professionals to provide guidance to distressed home owners through the complex task unique to these foreclosures that even trained real estate professionals have difficulty managing.

A Federal Foreclosure Hotline for Home Owners or a Loss Mitigation Department for the home owners is required to even out the playing field for home owners to have a remote chance at reasonable and/or fair terms. Formation of a united group of home ownership advocates that would match experts to experts with any lender/investor would seem drastic, but no longer can home owners trust the banks to do right by them after the blatant disregard to home owners best interests nationwide. This reckless above the law behavior many times occurring on the same loan with the same borrower.

Their behavior and obvious intentions have been revealed time and time again without penalty leaves home owners feeling more HOPELESS then HOPE

I asked my lender, Countrywide, if I qualified for a loan modification. They answered, "NO SORRY YOU DON'T QUALIFY."

When I asked about the 8.4 billion dollar lawsuit that just settled out of court there was a slight pause....................., "OH YOU MEAN THE HOME RETENTION PROGRAM? I'll send you some documents to fill out."

Here try sending a Qualified Written Request for your file from the lender by sending this template request. directions are included. It will cost you postage.

https://buzzword.acrobat.com/#d=hQO01Oe09kiEIv-APmJTuA

Phillip R.Carter.jr.

April 10, 2009 11:38 AM

I have been in business for over 30 years, then the finance market shut , I had to lay off good dependable workers, I am faced with maxed out credit cards, I have spent hours seeking finance, every loan company has said no. I have worked all my life paid taxes, been suportive to the cumminty. Now I am looking at losing all I workede for.

Phillip R.Carter.jr.

April 10, 2009 11:38 AM

I have been in business for over 30 years, then the finance market shut , I had to lay off good dependable workers, I am faced with maxed out credit cards, I have spent hours seeking finance, every loan company has said no. I have worked all my life paid taxes, been suportive to the cumminty. Now I am looking at losing all I workede for.

Phillip R.Carter.jr.

April 10, 2009 11:38 AM

I have been in business for over 30 years, then the finance market shut , I had to lay off good dependable workers, I am faced with maxed out credit cards, I have spent hours seeking finance, every loan company has said no. I have worked all my life paid taxes, been suportive to the cumminty. Now I am looking at losing all I workede for.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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