Having trouble modifying your home loan?

You are not the only one.

Due to "Shared Loss Agreements" with FDIC, private banks are less likely to modify home loans because they stand to make profits from foreclosing. Take Indymac as an example. It used to be an independent bank till it filed for bankruptcy in 2008 and was bailed out by FDIC.  Later, IndyMac was bought and transformed into One West Bank by a private equity firm called Dune Capital Management, a group that includes billionaire George Soros and Michael Dell, who agreed to buy the failed bank for $13.9 billion. The bank's assets at the beginning of this year (2009) totaled $23.5 billion so they made some billions immediately at the time of purchase.

Then, they struck a 20/80 loss share deal with FDIC. Soros, Dell and Co. agreed to pick up 20% of the loss whereas FDIC would pick up 80%. IndyMac would end up owning the property after foreclosure, making a sweet profit from the sale of the house. Many other banks have similar agreements with FDIC, so in effect, these banks are profiting on taxpayer dollars. People are becoming homeless on your dollars.

Loan modification programs are unregulated scams. When we call the lenders for help with our mortgage, they tell us there is nothing they can do till we miss a payment. So we go ahead and miss payments and then the warning letters arrive. We file and refile income/expense reports, negotiate for a good package but keep getting rejected. The process drags on for months, costing us productive time, money, energy, sleep and deteriorating health. They keep losing files, misappropriating funds, crashing their systems, changing their numbers, and rolling out ‘new packages' that they later reject when you apply for them. A year later, they tell us there is nothing they can do but ‘foreclose' the house. How many stories fit into this narrative?

The system needs checks and balances, as well as transparency. Urge Congress to stop foreclosures, launch an investigation into the unfair lending and loan modification practices now and create clear transparent guidelines to help homeowners with their loans.

See OneWestBankFail for more actions and updates.