Stop Foreclosure Answer

Many times I have commented on how poorly mortgage companies are handling the applications for loan modifications for people facing foreclosure.  Here is a new one.

Arizona Couple’s Home Wrongfully Sold

Recently a couple in Phoenix, Arizona came home to find a notice on their door.  The notice said that they had five days to vacate their property.  The sale of their home in the foreclosure had been finalized.

The only problem was they had been given a trial loan modification.  After they were given it, they had made all three of the mortgage payments required by the modification on time.  They were waiting for notification that their trial modification was being converted to a permanent one.

The Notice of the Sale Blindsided Them

They contacted their mortgage company, JP Morgan Chase who checked their records.  The company found that a mistake had been made.  The foreclosure process had not stopped when the trial loan modification started.  It continued on and their home was sold in error.  Representatives from JP Morgan Chase started to work on their error.  However as of early November the couple had not gotten their home back.

Can you believe that?  This occurred because the people in the loss mitigation department did not communicate adequately with their legal department where they were at on the loan modification.

Just imagine the undue mental anguish this couple experienced. Falling behind on mortgage payments causes anxiety for anyone.  Being notified by your mortgage company that they are starting the foreclosure process increases the anxiety.  Then you apply for a trial loan modification and it takes forever for your mortgage company to approve it.

You are notified that your application for that trial loan modification is approved. At that point you breathe a big sigh of relief.   You feel that you have saved your home and you make the required payments on time.  You are at the last step – waiting for approval for the permanent modification.  Right then

Your Mortgage Company Pulls the Rug Out From Under You

JP Morgan Chase has seriously wronged this couple.  They have added to their anxiety level.  They should be penalized for what occurred.  In addition to restoring their home to them they should have to pay a substantial amount of money to the couple and pay a fine on top of that.

The Process Needs to Be Changed  

Ever since the start of the Making Home Affordable Modification Program, mortgage companies have been allowed to act on their own.  Many continue the foreclosure process while they are processing applications for trial loan modifications.  They normally do not stop the foreclosure process until a trial loan modification is approved.  That is wrong.

Mortgage companies should be required to suspend the foreclosure process at the time they receive the application for the trial loan modification.  They should only be allowed to resume it if the modification is denied.  If the companies were processing the applications as they were supposed to, they would not be losing much time by doing this.

Any mortgage company which fails to do this should have to pay a sizable penalty.

I don’t know if this Phoenix couple was represented by a lawyer or an expert in loan modifications.  Instances like this clearly demonstrate how valuable it is to have someone represent you.

People facing foreclosure also need to understand the process and the steps they can take to save their homes.  Anyone who understands the process would know their rights and what they could do in a situation like this.  My EBook has much information on steps people can take to save their homes from foreclosure.  You can get more information on it by clicking Stop Foreclosure. 

Much Success,

Mark Elkins

Many people and organizations in the United States are getting frustrated with banks and financial institutions giving executives and key management personnel bonuses in the midst of the foreclosure crisis gripping this country.  We all have seen or heard news reports about what groups have done to bring attention to this.

The latest was a protest outside the offices of Goldman Sachs in Washington, D.C. on November 16.  About 100 protestors organized by the Service Employees Union International and a group named Public Citizen carried “wanted” posters for Lloyd Blankfein, the chairman of Goldman Sachs.  They also carried a big red homemade vampire squid puppet with fangs and tentacles which was supposed to depict Goldman Sachs as a company trying to wrap its tentacles around humanity.

The main demand of the protestors was for Goldman Sachs to take the $23 billion in bonuses it had announced that it was going to pay its executives and key personnel and use it to help struggling homeowners avoid foreclosure.  Their logic here was how could a company pay such an obscene amount of bonuses when people were in foreclosure and Goldman Sachs was one of the financial institutions responsible for the mortgage crisis that caused the foreclosure problem.

While this protest got the attention of the news media, it did very little to help people facing foreclosure.  The protest occurred after the bonuses were announced.  At that point there was no way Goldman Sachs could go back, cancel the bonuses and set up a fund to help people having financial difficulties save their homes from foreclo0sure.

Let’s look at this from another side.  Say Goldman Sachs did take the $23 billion and divert it to help people facing foreclosure.  How would they get it into the hands of these people?  Currently there is no mechanism in this country to do that.  It probably would sit in an account for months until someone or some organization figured out how to do it.

While the protestors’ intentions may have been good, they really did not have a plan in place to get the money to the people who could use it if they were successful.  For that reason their protest was all show.  If they were successful, it would not have succeeded.

If you are facing foreclosure, don’t believe that something magical is going to happen.  Don’t believe that Robin Hood is going to show up at your home and give you the money you need to save your home from foreclosure.  Don’t believe that you’re going to wake up tomorrow and suddenly your problems are going to be over.  It is just not going to happen.

If you are not represented by a lawyer or an expert in loan modifications, get one to represent you.  Also learn as much about the foreclosure process and what you can do to save your home from foreclosure as you can.  That is you main way to save your home.  There is much useful information on this in my EBook.  You can find out more about it by clicking Stop Foreclosure.

Much Success,

Mark Elkins

A decision by a federal judge in Minnesota this past week will have ramifications on loan modifications throughout the country.

A lawsuit had been filed alleging that the Making Home Affordable Modification program violated the constitutional rights of people facing foreclosure.  The reason was that people who were denied a loan modification under this program were not being given a written denial and an opportunity to appeal.  The suit sought to halt foreclosures for people who may be eligible for a modification under this program until the government put in place a formal appeal process and other safeguards.

In her decision Ann Montgomery, a US. District Court Judge ruled that Congress never passed a law saying that people facing foreclosure were entitled to have their loans modified.  In the guidelines for the Making Home Affordable Modification Program the mortgage companies had some leeway in determining whether a person facing foreclosure was eligible to have their loan modified.

Let’s take a closer look at this.

The reason that the suit was filed is that all too frequently mortgage companies have denied applications for loan modifications under the Making Home Affordable Modification Program without ever telling the people who applied for the modification the reason for the denial.  The letter merely said their application was denied.  In some instances a letter was not even sent.

The people whose applications were denied did not know why they were denied.  Was it because they did not make enough money?  Was it because the investors would get a better return if the foreclosure went forward?  Was it some other reason?  Another question arises – Were the mortgage company’s calculations correct?

The lawsuit sought to bring this to a head.  The lawyers who filed it also sought class action status.  That means that if they won, all people facing foreclosure would be covered by it.

The Judge’s Decision Was Correct.

Mortgages are not covered by federal law.  They fall under state law. 

The Making Home Affordable Modification Program was not the result of a law passed by congress.  It was put in place by the Treasury Department.  It was primarily designed to cover loans which were sold to Fannie Mae and Freddie Mac.  The government technically owns both of these companies at the present time.  Any mortgage company that agreed to participate in this program agreed to consider loan modifications on all of their loans not only those that they sold to Fannie Mae and Freddie Mac.

Nowhere in a mortgage contract between the mortgage company and the person getting the mortgage does it state that the person is entitled to a loan modification if they fall behind on their payments.  The mortgage only specifies how the payment period will be accelerated if the payments are not made on time and how foreclosure will take place.

So US District Court Judge Ann Montgomery was correct in her decision.

Does That Mean That the Mortgage Company Won?

By no means.  The decision merely means that this is not a federal matter.

Any person facing foreclosure who files an application for a loan modification has the right to know why their application was denied if the mortgage company denied it.  I would expect that if they are being represented by a lawyer or an expert in loan modification, the lawyer or expert in loan modification would be on the phone immediately with the mortgage company asking why the application was denied. 

If the mortgage company did not want to give them the reason, I assume that their lawyer or representative would continue to go up the ladder in the mortgage company, even to the president or CEO if necessary, to find out why.  If that failed, they would bring it to the public’s attention.

I guess the problem arises for those people who are not represented.  Many of these probably would just accept the denial and not try to find out why.  They would allow the foreclosure to go ahead.

New Treasury Department Guidelines Will Help

The Treasury Department has issued some new guidelines.  In October they required mortgage companies to send people who are denied a modification a written denial within 10 days.  Earlier in November they started to require that a mortgage company stop a foreclosure when the person facing foreclosure challenges a denial and provides new information which may impact the denial.

What Should You Do?

If you get a letter from your mortgage company merely saying that your application for a loan modification was denied and does not give the reasons, call your mortgage company immediately.  Ask them for the reasons for the denial.  Ask them to send you a letter explaining the reasons.  If you have a lawyer or an expert in loan modifications representing you, get the denial to them immediately and ask them to find out what happened.

Go through each reason for the denial and see if it is correct.  If your mortgage company had the wrong information, get the correct information to them as soon as possible.

Remember – you should do all that you can do to save your home.

I hope that you have found this information helpful.  If you want to learn more about the foreclosure process and steps you can take to save your home from foreclosure, my EBook has a lot of information on it.  You can find out more about the book by clicking Stop Foreclosure.

Much Success,

Mark Elkins

At a conference of the Mortgage Bankers Association in October mortgage companies started to warn that the results of loan modifications in the Making Home Affordable Modification Program may not be as good as expected. 

As of the end of September trial loan modifications had started on 500,000 loans.  These trial modifications last for 3 months.  If the people make their monthly payments timely during that period, they are supposed to be offered permanent modifications.  Representatives from many of the mortgage companies were saying that many of the people in these trial modification periods would not be offered permanent modifications because they have not submitted or are not submitting the required documents. A spokesman for one company said that ninety-nine percent of the modification packages returned to them are missing required information or have errors in them.

Treasury Department Reports May Reflect Badly on Mortgage Industry

The three month trial modification periods are starting to end for those people given these in July and August.  If a very low percentage of these are given permanent modifications, then the mortgage companies will look bad.  The Treasury Department will start to reflect the number of permanent modifications being offered in their monthly report in November. 

While the mortgage companies have been warning that the results may not be as good as expected, they have also asked the Treasury Department to loosen the guidelines for the Making Home Affordable Modification Program.  Fannie Mae has reduced the number of signed documents required to two and has given an extension of two months to certain people facing foreclosure to send in documents that are required during their trial modification period.

Mortgage Companies Continue to Shift the Blame

I hear about stuff like this and it makes my blood boil.  Ever since this Making Home Affordable Modification Program started, mortgage companies have been claiming that they are trying to help people facing foreclosure.  However, many are not doing what the companies have asked them to do. The companies have also said that many times they try to contact these people and get no response.

Articles and News Reports Do Not Support This Argument

Since the start of the program people facing foreclosure have complained that they have been unable to talk to a live person at their mortgage company about their loans.  Many have ended up in voice mail limbo or have been placed on hold for long periods of time and no one has ever picked up the call.

Others have said that they have had to submit the documents several different times to their mortgage companies because their mortgage companies have repeatedly lost what they sent in.

The One Overriding Question

Most of the people who have received a trial modification to their mortgage have had to do much to get these.  Some have had to fight for them.  Does it make any sense that people who have fought to get a trial modification will fail to submit any document that they are requested to so that their modification can be converted from a trial to a permanent one? 

I am sure that you will concur with me that the answer to that questions is no.   Who in their right mind would fail to do so?

If needed documents are not being submitted, I would venture to guess that the reason is simple.  The mortgage companies are not asking the people facing foreclosure for them.  When they do ask for them, their request is probably at the last minute and is delayed.

The Treasury Department, Fannie Mae and Freddie Mac need to do an investigation here to get to the root of the problem.  If it is the mortgage companies, as I suspect, they need to be penalized for their lack of action.

If you are facing foreclosure and are in a trial modification period, what do you do?  Make sure to submit everything your mortgage company asks for on a timely basis.  Make notes of what they requested and keep copies of what you send to them.  Also note the date you sent it.

If you have not heard from your mortgage company, call them and ask them what they require from you so that your modification can be converted from a trial to a permanent one.

If you are not represented by a lawyer or an expert in loan modifications I again urge you to get representation.  Get as much knowledge of the foreclosure process and steps you can take to save your home as you can.  I have a lot of information in my EBook on this.  You can find out more about it by clicking Stop Foreclosure.

Much Success,

Mark Elkins

In a recent post I told you about the spin Bank of America is putting on their performance in the Making Home Affordable Modification Program.  If you have not read that, please go and read it now before you read this post.  You will see what I am talking about.

In the press release I mentioned in that post, Bank of America said that their employees were working hard to help as many people facing foreclosure as possible save their homes.

Oh Yeah? Is That What They Did With This Couple?

Michael and Tamara Florea own a home in southwestern Ohio.  Their mortgage was with Countrywide. 

The attorney general of Ohio filed suit against Countrywide alleging that Countrywide knowingly loaned money to people in Ohio under false pretenses.  On these mortgages Countrywide knew that the payments were unrealistically high and there was no way the people could make them.  In December of 2008 Countrywide settled the suit and agreed to modify the loans of each of these people.

The Floreas had one of these mortgages.  In January of 2009 Countrywide offered the Floreas a loan modification.  In this modification the payment was reduced from $924 to $584 a month.   Michael and Tamara signed the modification agreement on January 10, 2009 and sent it back to Countrywide via Federal Express.

Every month after that the Floreas paid the $584 as agreed to in the modification.

Later in January Bank of America finalized its takeover of Countrywide.  At that point it became legally obligated to honor the loan modifications agreed to by Countrywide.

The Shock in June

So in June they were floored when they got a letter from Bank of America indicating that their monthly payment was $924.  It also indicated that there was a past due balance of $11,083. 

Tamara called Bank of America several times to clarify what happened.  Each time she spoke with different representatives who told her that their loan modification was being processed.  In a phone conversation in late July Tamara was told that Bank of America would start foreclosure proceedings against them if they didn’t pay what they owed and resume making their monthly payments of $924.

On August 24 Tamara tried to make a payment by phone.  It was refused.  The Bank of America representative with whom she spoke informed her that she and her husband were delinquent in their payments and because of that a hold had been placed on their account.  Several others with whom she spoke told her that her loan modification had not been processed because the income information was inconsistent.

Here’s the Kicker

Afterwards the Floreas discovered that Bank of America had been reporting negative information about them to the credit bureaus since at least March.  That had lowered their credit scores.

The Law Suit Against Bank of America

The Floreas have filed a law suit against Bank of America.  They want the court to order Bank of America to honor the modification agreement they signed with Countrywide and to prohibit them from filing a foreclosure action.

On Tuesday, October 6, they had their first victory.  In a phone conference Bank of America agreed to a court order barring it from filing foreclosure while the case is pending.

I am sure you would agree that Bank of America has zapped the Floreas. 

• How could they renege on the loan modification Countrywide sent out that the Floreas signed off on?
• How could they say that the Floreas owed them $11,083?
• How could they file foreclosure against the Floreas?
• How could they zap the Floreas’ credit scores?

A company that truly wanted to help their customers facing foreclosure save their homes would never do this.  Bank of America should be penalized for their actions here.

If you are facing foreclosure, don’t believe that your mortgage company is going to help you save your home.  Don’t trust them until they prove to you that they are worthy of your trust.  If your mortgage company is Bank of America, get legal assistance immediately.  You can’t afford to have them do to you what they did to the Floreas.

If you want to find out more about the foreclosure process and steps you can take to save your home from foreclosure, you might want to get my EBook.  You can find out more about it by clicking Stop Foreclosure.

Much Success,

Mark Elkins