Over one third of “Making Home Affordable” applicants have fallen out of the Governments HAMP program and another wave is coming soon. Homeowners that exited the program will probably end up in foreclosure and homeless if they don’t seek help from an attorney. Moreover, there are 4 million delinquent borrowers not even eligible for the program. The truth is, these people need to consult an attorney early in the process and know what options are available to save their home from foreclosure.

The Obama administration’s flagship effort to help people in danger of losing their homes is falling way short of expectations. The message out there is to work directly with your lender to modify your home loan and to not use a third party or attorney to help you. From what we have seen as bankruptcy attorneys nothing could be further from the truth. The lenders are overwhelmed, and TRIAL MODS apparently are nothing more than a ploy to get more money out of borrowers before they are foreclosed on.

“We have seen many of our clients make all their trial mod payments on time and do everything their lender has asked, only to end up with a denied loan modification and a foreclosure sale date” says James D. Zhou, California Bankruptcy Attorney at the Law Offices of Zhou & Chini. The unfortunate thing is, these borrowers are in a worse situation after trusting their lender to work with them to avoid foreclosure then they were in the first place. Not to mention lenders telling their debtor’s they need to be 60 days late to qualify, ruining their credit and jeopardizing the loss of their home to foreclosure. Now many of these people can’t even afford a chapter 13 plan to save their home and are forced to short sale or be foreclosed on.

The numbers are staggering as more than a third of the 1.24 million borrowers who have enrolled in the $75 billion “HAMP” mortgage modification program have dropped out. That’s more than the 27 percent who have managed to have their loan payments reduced to help them keep their homes. Keeping in mind these numbers don’t reflect lender’s in-house loan mod programs. Some borrowers have attempted a loan modification with their lender for almost 2 years. Funny, considering it only took them 2 weeks in some cases to get a “stated income” loan! I mean seriously, why it should take so long to review and approve or decline a loan modification amazes me.

This past month alone, 150,000 borrowers exited the program — bringing the total to almost 500,000 who have fallen out since it began in March 2009. A major reason so many have fallen out of the program is the Obama administration initially pressured banks to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out. Additionally, lenders would decline loan mods without explanation and put these borrowers in foreclosure without warning. We’re not even talking about the thousands of homeowners were sold toxic mortgages without understanding the ramifications of a recast and being told they could just refinance in a year or two. If caught early enough, filing a chapter 13 bankruptcy can bring your mortgage current and eliminate much of your unsecured debt. The Law Offices of Zhou & Chini offers free consultations to help people avoid foreclosure or walk away without any personal liability. Call us today and we’ll be happy to explain all your options.http://www.bankruptcyattorneyincalifornia.com