MORE BAD FAITH AND CRAP FROM AURORA LOAN SERVICING

Dear Readers:

Today, my client got a letter that her loan payment on her home was going to double.  Her rate is 8% for the first five years, which then drops to 2.25% over the H.15 Constant maturity 1-Year Rate established by the US Treasury which is currently .2733 so technically her rate at the five year rate will be 2.675  more or less.  With insurance and taxes her payment should be only about $3,700.00 per month to keep her house.  But Aurora wants $4,883.00 until July 12, 2012, then they will drop it to $3,700.00 per month or whatever index is at that time.

But here is the kicker.  She filed a chapter 13 Bankruptcy.  I sent in an authorization for her to speak directly with the lender regarding loan modification.  She asked for one, and was told she doesn't qualify.  After calling repeatedly, they finally agreed to interview her for a loan modification.  But here is what we learned. . . .  UNLESS BOTH the LAWYER AND THE BORROWER send a letter in WRITING requesting loan modification, it WILL NOT BE OFFERED.  How is that for complying with the spirit of HAMP.  What a dismal failure that program turned out to be.

Anywyer Readers, the squeaky wheel gets the grease.  At this point I would recommend that each of you call your lender WEEKLY and SEND FAXES weekly of your attempts to get loan modification from your lenders.  When finally the Government wakes up and decides its going to help you, IF and ONLY IF that day ever comes, then you will have adequate documentation of your legitimate attempts at loan modification.

Additionally, I cannot impress upon you enough that if you have stopped making payments on your mortgage to at the least use a mortgage calculator online.  Figure out what you owe to your lender.  Calculate a mortgage payment based on 4% and at least mail in that amount to your lender.  Show them you can succeed with a reasonable loan modification.  Furthermore, if your lender won't take your money then open a savings account and deposit that amount into your bank account each month.  You will have documented proof for your lender that you can make a reasonable mortgage payment.  At the end of the day, if you cannot save your house, you will likely have saved up quite a bit of money if you have to move, or cure your default.

I can tell you that it is painful to go from not making payments for 2 years to paying rent or a mortgage again.  We as humans get use to having that money around and we spend it.  Please don't make that mistake!

Good luck out there, until the next time I have more news to report.

God bless each of you for the coming year!

HELP from FANNIE MAE coming to LOS ANGELES - Even if you have already been turned down!

Dear Readers: 

If you are struggling to get your loan modified and your loan is owned by Fannie Mae help for you may have arrived if you live in the Los Angeles Area.  Go to this link to find out if Fannie Mae has your loan:  www.fanniemae.com/loanlookup The Greater Los Angeles Mortgage Help Center will be offering foreclosure avoidance assistance in both English and Spanish.  The counseling is free!  Call (866) 442-8576 or email la_mhc@fanniemae.com to schedule your appointment.

Even if you have already been turned down for a loan modification it is worth it to keep applying.  Because the economy is not recovering as quickly as investors were wanting, they are reconsidering their previous decision not to modify loans, and re-thinking their strategy.  So please don't give up!  However, if you have already received a Notice of Sale, don't wait to until the last minute.  Consult a bankruptcy attorney for free explore options to save your home in bankruptcy, or review your case to fully understand and know your rights.  We are here to help. 

AURORA LOAN SERVICE WINS BUT WILL ULTIMATELY LOSE: THE BREACH OF A LOAN MODIFICATION CONTRACT IS NOT A BASIS TO DECLARE A FORECLOSURE WRONGFUL

On behalf of a nameless client I filed a lawsuit against Aurora Loan.  The facts are as follows.  Client was offered a trial loan modification.  While the client was making the payments in the trial period, without any warning, Aurora sold the property in a foreclosure sale.  After the property was sold Aurora continued to accept two more payments from these poor clients.  Try as we might, Aurora would not rescind the sale.  So I filed suit.  Among the causes of action I included a claim for breach of the Trial Loan Modification Agreement.  I also alleged that this foreclosure was wrongful because it violated the terms of the Agreement. 

So the Judge was kind enough to explain to me why this is not a wrongful foreclosure.  I am paraphrasing but what she told me was this.  I have a valid claim for a breach of the loan modification agreement.  There is no doubt that my clients are entitled to damages as they conclusively breached the agreement.  However, there is no law which would make a foreclosure sale invalid because of a breach of the foreclosure contract.

So the judge sent me back to the drawing board to amend my complaint.  I suspect what she is trying to get me to do is to sue for specific performance under the modification contract and have them reverse the foreclosure sale.

But I did get one nice ruling out of the case.  The Judge said she would not require my clients to prove that they tendered the payment on the full foreclosure amount due to the fact that it would have been inequitable to require the borrowers to tender full payment when they were still in the trial period of the loan modification agreement.

Hope some of you are doing better than I am at trying to fight this battle.