What to do if you seriously want a loan modification.

IF YOU ARE TRYING TO GET A LOAN MODIFICATION:

1.    FILL OUT ALL OF THE INFORMATION REQUESTED BY YOUR LENDER.

2.    SEND ALL OF THE INFORMATION IN A MANNER THAT WILL RESULT IN WRITTEN CONFIRMATION THAT IT WAS RECEIVED.  PREFERRABLY BY FAX, OR E-MAIL OR BY CERTIFIED MAIL, OR OVERNIGHT MAIL, OR DIRECT DELIVERY WITH A SIGNATURE RECEIPT BY THE LENDER IF THEY HAVE A FORECLOSURE CENTER.

3.    CALL ONCE A WEEK TO REQUEST STATUS.  IF THEY TELL YOU DON’T CALL BACK FOR A MONTH, DON’T LISTEN TO THEM, CALL EVERY WEEK.  ASK THEM “ARE YOU MISSING ANY DOCUMENTS?”  ARE THERE ANY OTHER DOCUMENTS NEEDED? 

4.    WHATEVER RESPONSE YOU GET, SEND THE MISSING DOCUMENTS, EVEN IF YOU HAVE SENT IT 64 TIMES BEFORE AND THEY KEEP CLAIMING THEY DON’T HAVE, SEND IT AGAIN.  IF THEY SAY THAT THEY HAVE EVERYTHING, THEN FAX A LETTER TO THEM SAYING THAT “I SPOKE WITH _________ AT THIS PHONE NUMBER _____________ AND HE/SHE TOLD ME THAT YOU HAVE ALL MY PAPERWORK AND THAT I AM PRESENT BEING REVIEWED.  IF THIS STATUS SHOULD CHANGE, PLEASE CONTACT ME IMMEDIATELY.”

5.    EVERY WEEK FAX A LETTER TO THEM SENDING THEM ANY BANK STATEMENTS THAT YOU HAVE RECEIVED IN THAT WEEK OR COPIES OF ANY PAYSTUBS YOU HAVE RECEIVED IN THAT WEEK.  THIS WAY WHEN THE REVIEWER GETS TO YOUR PAPERWORK, THEY CAN’T MAKE EXCUSES ABOUT HOW THEY DON’T HAVE UP TO DATE INFORMATION.

6.  NO MATTER WHAT, DON'T GIVE UP.  IT SEEMS TO ME THAT THE GOAL OF ALL OF THESE LENDERS IS TO FRUSTRATE YOU TO DEATH, EITHER YOUR OWN OR SOMEONE ELSES (JUST KIDDING)  I BELIEVE THEY HOPE YOU GIVE UP SO THAT THEY CAN JUST TAKE YOUR HOUSE AND ADD IT TO THEIR PORTFOLIO OF REOs.  THE BANK LOOKS LIKE A STRONGER INVESTMENT TO PEOPLE IN DUBAI AND IN CHINA WHEN THE PORTFOLIO IS FILLED WITH REOs AND NOT A BUNCH OF LOANS WHICH HAVE SHOWN POOR PERFORMANCE IN THE PAST.  HOPEFULLY MY SAVVY READERS GET THIS POINT BY NOW!

MY CLIENTS WHO FOLLOW THIS PROCESS SEEM TO DO BETTER THAN THE ONES WHO DO NOT.  THERE ARE NO GUARANTEES THAT YOU WILL GET A LOAN MODIFICATION AND THANKS TO THE COWARDICE OF CONGRESS AND OUR PRESIDENT IN NOT STANDING UP TO THE BANKS, AND TAKING THEIR CAMPAIGN CONTRIBUTIONS, THEY WON'T EVER STAND UP TO THEM, THERE IS NOTHING REQUIRING OR MANDATING THAT YOU BE GIVEN A LOAN MODIFICATION.

GOOD LUCK OUT THERE!!!!!

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!

ATTENTION: All Wells Fargo and Wachovia borrowers!!!! Dec. 8 & 9, Ontario Convention Center LOAN MODIFICATION WORKSHOP

Dear Readers:

If you have a Wells Fargo or Wachovia Loan, your lender will be hosting a free workshop for Wells Fargo Home Mortgage, Wells Fargo Financial, Wachovia Mortgage and Wells Fargo Home Equity customers facing financial hardships. The two-day workshop -- to which Wells Fargo has invited thousands of Southern California homeowners -- will take place Dec. 8 and 9, from 9 a.m. -- 7 p.m. at the Ontario Convention Center Exhibit Hall located at 2000 E. Convention Center Way in Ontario, Calif. To help guarantee your ability to meet with a representative. Sign up by Tuesday, Dec. 6, at www.wfhmevents.com/leadingthewayhome. For more information call 1-800-405-8067.

HOWEVER...... Do not go to this event unprepared.  Make sure you have six months of bank statements.  Make sure you have three months of paystubs FOR EVERYONE IN YOUR HOUSE who is contributing to the mortgage payment.  If you have renters helping you pay for the home MAKE SURE YOU HAVE RENTAL AGREEMENTS WITH RECEIPTS OF THE MONEY YOU HAVE BEEN PAID.  Bring with you a list of all of your expenses.  You are going to have to show this bank that you can make a reasonable payment on the balance of your loan.  SOOOOOOOO.... google search mortgage calculator.  Add up how much you are behind, add up the taxes the bank has paid on your behalf, add up the balance of your loan.  Put that into the Principle and make that the "new loan."  Give an interest rate of at least 4% for the next 30 years and be prepared to show you make at least 2.5 times that amount if you expect to have any chance at getting a loan modification.  However, this system DOES NOT GUARANTEE that you will get a loan modification.  It will depend on other factors likely to be out of your control including but not limited to what your home is worth, where its located and whether your loan was insured or not.

People don't realize this, but if your lender had insurance on the loan, they just as soon foreclose, cash in on the insurance policy to limit their losses and then reinvest in the cheap real estate left on the market.  DON'T BE FOOLED, I bet the banks are making a killing, while crying broke to Congress.

If you can't get modified, don't wait too long and get too far behind that you can't save your home in a Chapter 13 Bankruptcy.  Make sure before you go to this meeting with Wells Fargo, or any other lender that you go for a free consultation to a LOCAL bankruptcy attorney in your community so they can go over your situation and help you decide whether it is worth it under your circumstances to stay in this home.

Thanks for reading!

Bank of America headed for Trouble ... or are they???

Dear Readers:  

 

       I have a client who works at Bank of America who saw a memo posted around the loan modification department that while loan modifications continue to be processed, they will no longer be continuing foreclosure sales in California.  Now it is uncertain if that applies to all of Bank of America or not but take a look at this downward spiral that Bank of America is facing:

 

Oct. 19, 2010 - Because of the Credit Card and Debit Card rules sponsored by Senator Durbin, Bank of America Corp. reported today a loss of $7.6 billion in the third quarter, as it took a writedown of more than $10 billion to prepare for new legislation that it says could virtually wipe out its debit card revenue. 
Bank of America currently makes about $2.9 billion annually in debit-card revenue, and says it expects to have to shed up to 80 percent, or about $2.3 billion. The $10.4 billion writedown is an accounting charge that reduces the goodwill value of the card services unit. BUT keep in mind, the Merchant's Payments Coalition pointed the finger at BofA stating that it was only trying to divert attention away from its foreclosure problems.  Interestingly, the mortgage unit lost $344 million this year, as opposed to the $1.6 BILLION that it lost last year. 

But what's putting some pressure here at home to not provide loan modifications in my opinion is the new capital requirements that banks are having to meet wherein they must maintain higher liquidity and capital levels under the Basel III international regulations.  So in order to meet those requirements. . . FORECLOSURE FORECLOSURE FORECOSURE!  Makes more capital available and increased liquidity!

But tell me something readers. . . .  Bloomberg Business Week writers Dawn Kopecki and Michael J. Moore writing on October 28, 2010 that it's going to be the worst decade for banks since the Great Depression....

YET:  On November 5, 2010, David Frank from Forex said that Bank of America's stocks are UP almost 2 percentage points since the Federal Reserve Board announced that the banks could increase dividend payments. 

HOW is it possible that Bank of America on one hand is posting devastating losses and on the brink of needing bail out funds from the federal government. . . yet there is a plan to pay dividends to its investors.  Someone had to lobby for that change with the Federal Reserve Board. 

If I were a betting lawyer, I would say that with the foreclosures that Bank of America have been snatching up in a race to beat congress from taking action to stop their foreclosure frenzy.  The properties they seize for themselves end up building a portfolio that when sold create liquidity for the bank.  But if you ever have attended a foreclosure auction, there are plenty of cash rich investors coming in and creating bidding wars.  They are not getting "DEALS" on these homes as much as you would expect.

My advice, if you have money, hold on to it.  The roller coaster ride is not over yet, we have not hit bottom.  From an investment point of view, Bank of America attracts more investors as it gets troubled assets off the books.  The losses posted in the mortgage department that I referenced in this article, reflect, that Bank of America took its losses up front.  Took it's tax deductions for the losses up front.  Now that they show fewer losses this year, sadly wealthy investors will flock to Bank of America seeing the dramatic drop in losses.

Like my good friend Melody always says. . . I'm just saying. . . .

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. 

Bank of America Hog-Ties Homeowner Looking for Loan Modification Virtually Guaranteeing Borrower Will Lose the Home in Foreclosure - Another example of "I would love to give you a loan modification Mr. Smith. Just bring in a unicorn to our office and we will be happy to accommodate you!"

Just in this morning. . . . Client calls me crying on the phone.  Her husband suffered a small heart attack when he received the proposed loan modification from Bank of America.  He just so happened to have received the same loan modification paperwork that I received.  The poor women faxed me her loan modification which I reviewed.  Her is what I discovered.

First of all the amount they put for the monthly mortgage payment is just as high as the regular payment.  They are virtually giving no assistance to this borrower.  It is an FHA loan.  While they are submitting a claim on one hand to FHA under the mortgage insurance, they are at the same time rolling the same amount of the claim back into the loan!

The payment for which BofA is asking does not reflect the new lowered interest rate.  It continues to reflect the old rate.

The loan modification notice is dated April 21, 2010, but is not sent out federal express until April 23, 2010 and gives the borrower until Tuesday April 22, 2010.  Funny how Bank of America seems to only send out loan modification notices on Thursdays and want them back by a Tuesday.  Could this be because they don't expect a borrower to find a lawyer over the weekend to help them review the files.  Or worse yet, they don't expect the borrower to be able to find a NOTARY who can NOTARIZE the documents so they can be sent back in time?

Or did they pick that timing - DUE DATE, knowing that theses Borrowers get paid on the 15th & 30th of the month and would not have collected a paycheck in time to pay the $1750.00 they want in order to receive the loan modification?

By the way they set a Sale Date for foreclosure of May 7, 2010.

Now Bank of America's loan modification paperwork states that this loan modification is completely invalidated if the borrower should file a bankruptcy during the 28 years they have left on the loan.  So this means that along with paying the mortgage which didn't change at all. .. . the borrowers are going to have to pay back the 40K they accumulated in credit card debt to take cash advances to to survive when the wife lost her job and they couldn't afford the payments in the first place.  So here is the hog-tie.  Bank of America makes these borrower choose between keeping the house and keeping the credit card debt

The next rub in all of this is the language on the "Negotiation Agreement"  It states that the borrower must return all of the requested documentation for final approval.  If the final approval is not given they can go forward with foreclosure sale on May 7, which is only one week after they receive the documentation on April 28, 2010.  Do you get the same feeling I get?  Bank of America is going to collect another $1,750 from these borrowers, deny the loan modification on May 6, 2010, sell the house on May 7, 2010.  So these borrowers end up paying for their own execution!

Bank of America goes one step further.  They say that unless the borrowers receive something in writing from Bank of America stopping the sale . . . (which is the functional equivalent of calling your local Bank of America Branch office and ordering pizza from them to be delivered - - you know THAT's never gonna happen) the sale will go forward.  And as I said before if they file a chapter 13 to stop the sale they won't get a chance at loan modification at all!

Then to make matters worse yet, this is an FHA LOAN.  The offer does not comport at all with the federal GUIDELINES FOR FHA LOAN MODIFICATION!!!!!!  But again, I believe those guidelines state that if the borrower files for bankruptcy they are disqualified as well!

Okay we will call Bank of America on Monday Morning to see if they can explain themselves for this deplorable loan modification offer.  An offer that provides absolutely no assistance and see if we can change this situation.

I'll post again and let you know what happens.

ADVICE:  If you are facing a foreclosure sale, take the credit counseling course that is required to be taken for pre-bankruptcy filing.  You can find an approved one at CRICKETDEBT.COM  they charge like 36 bucks for the course.  Then hire a bankruptcy attorney to prepare your paperwork who has the ability to electronically file. This way you can negotiate with the bank, if you can ever get a hold of anyone.  If they tell you the sale is going to be continued, tell them you need an e-mail confirming that fact.  Then if they don't give you written confirmation that sale is being continued, the night before, ask your bankruptcy attorney to file your emergency petition.

Litton Loan Servicing

I have a client who I filed a chapter 13 bankruptcy on the eve of foreclosure. Her lender is Litton Loan Servicing. Her payments are too high and I doubt she will be able to complete her chapter 13 plan. However, with a loan modification she could do it. She applied previously and had been turned down. I called Litton Loan Servicing Bankruptcy department and they are going to send us an application. The standards for loan modification are different if they are in bankruptcy so she will qualify to be reviewed again. This is what I was told. Let's see if there is any truth.

HAMP Program Is a Dismal Failure - Bank of America one of the worst in providing loan modifications to its customers. BOYCOTT BofA NOW!

Alan White recently reported "Million homeowners have been lured into temporary payment plans with false promises of permanent loan restructuring.  After 11 months, only one in ten has had their mortgage permanently modified.  More disturbing is the fact that these one million homeowners in trial mods, i.e. short-term payment plans, were given a deadine of January 31 to convert to a permanent mod. Treasury reports that about 33% of those who have been in trial payments for three months or more have missed payments.  The other two-thirds are making their payments.  That means that more than 500,000 homeowners are in trial modifications, making payments on time, but about to be kicked out of the program, presumably because of missing paperwork."

If you are going to save your house bankruptcy is about the only way to make it affordable.  Look at the numbers.   Bank of America has only completed 3200 loan modifications since the inception of the HAMP program.  This statistic is frightening in light of the fact that they took over most of the Countrywide Loans.  Many of the Countrywide loans were predatory and so declared by California's state attorney general in a lawsuit instituted in 2009.

There is just no way around us.  President Obama has abandoned bankruptcy reform that would allow you to reduce your mortgages to the fair market value of your home.  If you intend to keep your home and you can afford to make the mortgage payments on the first mortgage IF we can eliminate your credit card debit, refinance your motor vehicle to a better interest rate and reduce the amount owed to the present value of the vehicle then file your bankruptcy before its too late.  In Chapter 13 Bankruptcy you have to pay back all of the money you are behind on your first mortgage.  However you get five years to do it.    

Stop wasting time asking the bank for something they just aren't too likely to give you.  See any reputable bankruptcy attorney in your community immediately.

Senator Dianne Feinstein States That Hope is Not Lost for a CRAMDOWN

I got this e-mail today from Senator Feinstein:

Dear Ms. Rodriguez:

Thank you for writing to me to share your thoughts on legislation that would allow bankruptcy courts to modify the terms of home loans. I appreciate hearing from you on this important subject.

California is one of the states hardest hit by the foreclosure crisis. Approximately 520,000 homes received a foreclosure filing in California in 2008, and more than 2.3 million homes received a foreclosure filing nationwide.

Foreclosures are not in anyone's best interest. While they are a catastrophe for the homeowner, they also leave the lender with a property that has to be resold, frequently at a loss, and the neighborhood with an empty house that is often not being maintained. When this happens, communities can be decimated, local economies suffer, and crime often increases.

On January 6, 2009, Senator Richard Durbin (D-IL), introduced S. 61, the "Helping Families Save Their Homes in Bankruptcy Act." I am an original co-sponsor of this bill because I believe it will help to stem the current foreclosure crisis. The bill would amend the bankruptcy code to eliminate a provision that prohibits bankruptcy judges from modifying mortgage loans on primary residences. The bankruptcy court would be authorized to extend the time allowed for repayment of a mortgage loan, in order to reduce the debtor's monthly payment to a feasible amount. The bill would also allow bankruptcy judges to convert escalating adjustable rate mortgages into fixed-rate mortgages, at a reasonable rate of return for the bank.

On March 5, 2009, the House of Representatives passed a companion version of this legislation (H.R. 1106) with similar provisions by a vote of 234-191. It is expected that this legislation will come before the Senate shortly.

I believe that Congress must do everything possible to help solve the current foreclosure crisis and keep struggling homeowners in their homes. I appreciate hearing your views on this matter. Please know that I will be sure to keep your comments in mind should this bill or similar legislation come before me for consideration in the Senate.

Again, thank you for contacting me. If you have additional questions or concerns, please feel free to contact my Washington, D.C. staff at (202) 224‑3841.

Sincerely yours, Dianne Feinstein
United States Senator

DON'T SIGN AURORA LOAN or QUALITY LOAN SERVICES "Special Forebearance" Agreement without seeing a lawyer first!

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!