Chase loan modification denial due to negative net present value

May 12, 2010: Even as I was taking Ms. De Laura’s (214) 626-2671 “courtesy” call from the Chase Home Lending Executive Office, an e-mail from the Wall Street Journal was waiting in my in-box, with a comment from Chase. Per the reporter:

“Here’s the response I got from Chase re your situation:

Chase communicated to the customer in the summer of 2009, in March of 2010, and in May of 2010 that the customer would not qualify for a loan modification because the analysis showed a negative net present value.   

 Is that correct?”

Was this another test? I composed my thoughts and replied:

“That is not correct. I have two written letters from Chase. The first denial, dated August 25, 2009, states in one sentence: “Your property equity exceeds our program guidelines.” 

The second written communication dated March 5, 2010 states “We are unable to offer you a Home Affordable Modification because we are unable to verify that you do live in the property as your primary residence”.

The case was reopened once I provided my voting records and residency was proven. 

There is nothing in May of 2010, indeed Shawnte Trowlsdell told me on 5/10/10 a letter was to have gone out on April 30th but it did not; she could not see the letter and did not know what it said or why it was not sent. My mailman has come and left today and there are no letters from Chase. The phrase “negative net present value” has never been used nor do I really know what it means…

Two minutes ago Chase called to tell me they were composing a written response to my letter to Mr. Lowman.” 

I was beside myself. I now had an answer, whatever “negative net present value” meant, because this was the first time I’d ever seen those four words in a sentence, and the sentence came from Chase via The Wall Street Journal. There was nothing in writing from Chase about this, nor had those four words ever been expressed in any of my hundreds of calls to Chase.

I didn’t know what it meant but I did know that the response from Chase was curiously worded in such a way as to imply I’d been told all this before, which was simply not true. There were really two sentences in the quote, strung together with the word “because”, only the “because” had never been shared with me. 

The Wall Street Journal needed to know this so I faxed the reporter copies of my two denial letters. I also sent a shout-out to my banker and broker friends to learn the meaning of “negative net present value” 

I spoke with my broker and another broker and a banker I knew – all were mystified by the term “negative net present value” and thought there must be some kind of mistake since I was not underwater in the loan, indeed; I had some equity, as evidenced by the August 2009 denial. The banker said she would dig deeper and get back to me. This was the same banker who had helped me prepare my monthly expenses spreadsheet; she was familiar with my situation and eager to offer assistance. 

Finally I sent an email to the Wall Street Journal reporter and expressed my frustration over not knowing what those four words meant and anger at having never seen them before. They seemed like more bank-talk designed to confuse and obscure, why couldn’t the guidelines and the formulas be transparent? 

His reply was chilling: 

What they mean, I believe, is this: It isn’t in the best financial interests of the owner of the loan to give you a modification. I believe they mean this: the net present value formula shows they would be better off either collecting payments from you under the current terms or foreclosing.”

 I hoped he was mistaken but I knew at that very moment that Chase had been playing games for with me for over fourteen months; they had only provided a clear answer when backed against the wall by the Wall Street Journal.

Was this the new American way, or just the Chase way? It seemed to me that Chase was continuing the predatory loan practices devised by Washington Mutual, and they were even better at playing the game.  

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Who owns my Chase home mortgage loan?

May 12, 2010: The whole mortgage-backed security issue has been sticking in my craw, underlined by the fact that Washington Mutual had taken advantage of me not once but twice. First when they lured me into a Pick & Pay loan which exposed me to negative amortization, and then when I’d realized what a bad loan it was and wanted to dig out, they “modified” my loan with an equally unfavorable streamlined refinance. I wanted to review each and every document in this predatory mess, but I wasn’t exactly sure where to start. 

I went to the RESPA site http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm and read everything I could find before placing a call to Customer Service. My questions were surrounding the fact that my loan was not Freddie Mae or Fannie Mac backed; did the RESPA rules apply? The rep didn’t know but she told me to call RESPA at (202)708-0502 in Washington, DC and ask an expert. I called and left a voice mail and a while later Angela Collier (202) 402-6135 returned my call. She was extremely helpful and directed me back to the site to walk me through how to submit a “qualified written request” and showed me the sample letter http://www.hud.gov/offices/hsg/ramh/res/reslettr.cfm  format I needed to follow. Ms. Collier suggested I copy her when I sent the letter and that I consider copying my state Attorney General’s office as well as the state FTC. She knew her stuff.

She listened to my concerns and told me exactly what documents I should ask for, especially when I told her I was convinced the loan had been sliced and sold off as a mortgage-backed security. I shared my suspicions that perhaps this was why I was could not get loan modification answers from Chase. Ms. Collier said that Chase would have twenty (20) business days to respond and I should call her to follow-up. I said if Chase responded in twenty business days it would be a first! They hadn’t responded to my OCC complaint which was over 60 days old, nor had they responded to my letter to David Lowman Chase Home Lending CEO.

Chase Home Lending sends an email…what does it mean?

April 30, 2010, 11:11 am: I received this e-mail from Olga Danilova:

Hello Ms. Wright,

We are unable to provide you with a modification at this time. We will be sending your [sic] our detailed response in a letter. 

Thank you 

Olga Danilova

Chase Home Lending

Home Lending Executive Office

Phone: (614) 422-2260

Toll Free: (888) 310-7995 ext. 2260

Fax: (866) 480-1239

I decided there was not much else I could do until I either received a real letter in the mail from Chase or heard back from Natalia Carrillo, especially if Olga was going to be out of the country for two weeks. Either way, this made no sense. Why had I done the Financial Interview on April 29, 2010 if my modification had been denied on April 28, 2010? Was Chase playing games, stringing me along and pretending to offer this struggling homeowner help when all they really wanted to do was drain my last dollar in savings and then take my home? It felt that way, especially after being denied a modification because I had three months cash reserves on hand. Three months was a nano-second in the life of this mortgage.

Was Chase continuing the predatory lending practices established by Washington Mutual, masquerading as a friend of the family while they fleeced you…I sure hoped not.

Chasing the Underwriters at Chase Home Lending

I’m curious about “Underwriting”; it seemed to be a Bermuda Triangle at Chase, yet another example of their opaque banking procedures, but it could also be the one place to get a straight answer from Chase. Underwriting might be the black box where decisions were actually made. Here is the history of my loan modification with Chase:

  1. December 30, 2009: I was told my loan was “in Underwriting” as of 12/15/09
  2. January 20, 2010: I was again told my loan was “in Underwriting” as of 12/15/09
  3. February 23, 2010: I was told my loan was “with the Underwriter”
  4. April 5, 2010: I was told my loan was “sent to the Underwriter” on 3/1/10”
  5. April 12, 2010: I was told my loan was “with the Underwriter”

As of April 28, 2010, Natalia Carrillo Chase Home Finance (800) 848-9380 informed me my loan was not going to Underwriting until and unless a new Profit &Loss statement was submitted and a financial interview conducted.

Was my loan EVER in Underwriting (perhaps in a parallel universe)? Was Chase just like Washington Mutual – had Chase been lying to me since December 15, 2009?

Do Chase Home Ownership Centers help struggling homeowners?

April 20, 2010, 11:39 am: I was denied service at the Chase Home Ownership Center in Media, PA starting on December 15, 2009 (they would not meet with me because I “had to be 31+ days past due”), then on January 5, 2010 (they would not meet with me because my loan was “already in the system”) and again on April 22, 2010 (they would not meet with me because my loan was “already in the system”). The Chase Home Ownership Centers are not helping this struggling homeowner. I need answers about my loan modification, not more opaque banking procedures and certainly not a continuation of the predatory lending practices devised by Washington Mutual.

Chase Home Ownership Centers are not decision makers!

April 20, 2010, 11:25 am: I asked Jason Papa what the function of a Chase Home Ownership Center was and if I should drive there for a face to face meeting. He said “anybody active we can’t take”; we “originate and monitor applications” and “we are not decision makers at the Chase Home Ownership Center”; he went on to say they were a “contact point” for the consumer. He remembered my loan and requested permission to pull the file. I agreed and we talked about the situation.

I wanted clarification on “too much equity” and the 30% formula Jacqueline Ham from the Chase Home Lending Executive Office had provided on February 12, 2010. Jason said if my monthly mortgage payment was less than 31% of my monthly gross pay I would not qualify for HAMP. I reminded him my loan did not qualify for HAMP regardless, but I was asking about the equity formula, not the relationship between monthly mortgage payment and monthly salary. I also made it clear my monthly mortgage payment was far greater than 31% of my monthly gross salary. Jason was stuck on HAMP and referenced the $727,750.00 cap. (I didn’t bother to point out that in Cape May County, NJ the cut-off was $487,500.) I jumped in and said it was not about HAMP. I was asking about the Chase in-house program – I thought Chase had another program, an in-house program that he’d mentioned in our January 5, 2010 call.

Jason said I’d been denied (in August 2009) but I could always “apply again if my situation changes”. I said my situation had changed; my savings were depleted and I was pursuing the 12/11/09 loan modification application allegedly underway. I said an interior appraisal had been done on 4/1/10. Only then did Jason realize what I was talking about and he said he could not help me. I persevered and asked about a face-to-face meeting with a decision-maker; Jason said “no one meets with the decision-makers” (Nobody gets in to see the Wizard, not nobody, no how!) and the decision-makers “don’t write a lot of letters”; “they only send one when the decision is made”.

Based on my attempts to get a copy of the denial letter allegedly sent 6/30/09 and/or 8/25/09 for my 2/24/09 modification, I knew this was true. Chase put as little as possible in writing, thus continuing the opaque banking practices and predatory lending schemes devised by Washington Mutual.  I thanked Jason for his time and we ended the call.

Mr. David Lowman, Chase promises loan modification answers…

April 19, 2010, 4:47 pm: I decide to write a letter to Mr. David B. Lowman, CEO Chase Home Lending, and take him up on his testimony before the House Committee on Financial Services. In addition to the letter I outline my attempts to get loan modification answers in a nineteen page enclosure and send it to Chase Home Lending CEO Mr. David Lowman via Certified Mail, copying Jamie Dimon, Chase CEO; Senator Frank Lautenberg; Senator Robert Menendez; Congressman Frank LoBiondo and Philadelphia Inquirer real estate columnist Alan J. Heavens. Mr. Lowman promised answers; after almost fourteen months of trying to play by Chase’s ever-changing and secret rules, I need an end to opaque banking procedures and I need straight answers. This predatory loan originated by Washington Mutual and serviced by Chase must be modified.