With so many homeowners facing foreclosure for so long you would think Chase would get it? On the other hand, maybe they do. It has been several quarters that Treasury has been warning them to get their act together and still no result. Now they are holding back money. I read the article with great interest till I noticed the part about how much money Chase has received to date from Treasury. Putting aside what I think I know and what I KNOW I know about HAMP, the numbers quoted make no sense.
“Both Chase and BofA combined to start 315,000 permanent HAMP modifications and extended more than 800,000 three-month HAMP trials.” Ok, so that is our basis of numbers. Then we get this quote, “The Treasury uses Troubled Asset Relief Program funds to pay servicers $1,000 for every permanent modification and another $1,000 every year the new loan is current.” Wow, only $1000 per mod plus another $1,000 per year as long as the loan is current. Well let’s see, if we then assume every mod lasts for only one year and is current, putting aside the fact that we know the default rate on them runs between 30% and 65% depending on whoever is tracking and reporting the numbers, then that is $2,000 per loan mod. As the article did not tell us how much of the 315,000 perms were done by each, I will split it in half with BofA. That leaves us 157,500 laon mods done by Chase. 157,400 mods times $2,000 per mod equals $315,000,000 dollars for Chase. For both of them that is $630,000,000, Six hundred Thirty Million Dollars. Over half a Billion Dollars of payments possibly due to or paid by Treasury to these two lenders.
Now, putting aside the fact that this is allot of money. Here is the quote that my eyebrows really raised on, “According to Treasury data, more than $87 million in HAMP payments went to Chase so far, and another $80 million went to BofA.” That is $167,000,000 million dollars actually paid. Now, I am confused. If BofA and Chase are due $630,000,000 and have only been paid $167,000,000 that means that $463,000,000 is in arrears and being held by Treasury to be paid when they get their act together. You are a lender or lenders that are owed almost half a Billion Dollars and all you do is pull your head out of your ass and get paid and you still cannot figure it out?
I understand why in law school my Commercial Law lecture professor (Douglas Whaley) always used Octopus National Bank to stand in for the bank. They are in fact a Blind Octopus that cannot find it’s ass with all hands, a bright light and Google Maps. Of course the real joke is that an octopus has no ass!
