To keep her home, Mardee Jerde scrambled to meet her bank’s demand that she pay almost $50,000 in overdue mortgage payments immediately. After a car accident kept her from working for 11 months, she was forced to mail in to the bank the entire settlement that she won from a lawsuit over the crash, leaving the Minnesota resident with practically nothing to live on.
Two days after receiving her $49,825 in the mail, Jerde learned that she would lose her house anyway because Chase Bank had rejected her application for a permanent loan reduction–for the second time. Merde, who had done everything Chase asked of her, felt betrayed:
“If I had known that [the bank would foreclose anyway], I never would have sent that money. I would have been out of my mind. That was given to me to live on. Now I have nothing…The only thing I’ve got bought and paid for is a lot in the cemetery. And I might be camping on it.”
Jerde can reclaim her house if she can somehow pay off her outstanding mortgage balance of over $200,000 by Aug. 23.
Sadly, Jerde’s story is not uncommon. In June, the Obama administration announced that JP Morgan Chase, Wells Fargo, and Bank of America would no longer receive federal funds from its Making Home Affordable Program after the three banks “failed to meet basic program requirements.”
One Making Home Affordable Program — the Home Affordable Modification Program (HAMP) — is meant to help struggling homeowners like Merde by arranging for permanent loan reductions. But as of June, less than 700,000 housing loans have been permanently modified, out of the 3 to 4 million projected. June saw the fewest loan modifications under the program since April 2009.
Minnesota real estate lawyer Carl E. Christensen blames the low numbers on the banks. “The banks put out their hand and say, ‘We’re going to help you,’ and then stab people right in the back,” Christensen said. “Nobody ever gets loan mods. I meet with up to a dozen people a week and have been doing this for two-and-a-half years. I’ve only seen five modifications, and only one that ever gave any substantive benefit.” Yesterday, Chase Bank sold off the home of a U.S. soldier who had returned from Iraq that very same day.