Interestingly every borrower I know who has been desperately awaiting word from Aurora to get a loan modification received a letter offering them a "Special Forbearance Agreement."
The terms generally are to pay for two or three months a lowered payment with a balloon payment of the balance of the arrearages paid in the third or fourth month. The Agreement provides the customary this is all there is language:
"This Agreement sets forth all of the promises, covenants, agreements, conditions and understandings between the parties hereto with respect to the subject matter hereof. This Agreement supersedes all prior understandings, inducements or conditions, express or implied, oral or written with respect thereto except as contained or referred to herein."
Over the telephone I have had three different agents assure me and my clients that this is just a test to see if they can really make the payments. If they really can make these payments then they will consider a more permanent loan modification. There is no way the borrower could prove this was ever promised because of the language in the Agreement. Even if they had a tape recording I can here some judge telling the borrower, "Well you should have known it wasn't true because of what was in the written agreement!"
But what I find to be absolute sneaky bad faith tactics is the "Customer's Admissions" paragraph which reads:
"Customer admits that the Arrearage is correct and is currantly owing under the Loan Documents, and represents, agrees and acknowledges that there are no defenses, offests our counterclaims of any nature whatsoever to any of the Loan Documents or any of the debt evidenced or secured thereby."
What this means to my lawyer mind is that if Aurora refuses to entertain any further negotiations with a borrower for a loan modification, you will have already waived any claim under California Civil Code Section 2923.5 & 2923.6 if any existed. If you had any claims that could have been brought in Bankruptcy court to reduce the claim on the loan, those too would be waived.
AND FOR WHAT??????? In exchange for a two month forebearance agreement? That is INSANE! Please before you sign anything with Aurora see an attorney. ANY ATTORNEY!!! Please don't give away your rights for bread crumbs!
