After over two years of modification hell, first with Chase and now with these people, we were denied for a HAMP (the Obama administration's modification program.). But here's the thing. We studied the guidelines and we qualified. They said that the monthly payments would be higher than the existing monthly payments on the loan.

This is completely untrue based on the 31% guideline. They then threatened foreclosure after offering us a new loan arrangement that was nearly half of our gross income and did not give us any break on interest rate or principle or arrears.

I suspect that they are doing this to everyone. The legal question becomes 1.) Is there a liability for telling people not to pay their mortgage based on the HAMP process, then turning them down even if they should qualify in a an attempt to get a stronger (for them) deal?

And if that is the case, what can we do about it?