Beware of those offers of “modification”

The lenders are out in force trying to get you to sign something new. Most of the offers accomplish only two things: (1) ratification of a loan that was unenforceable and (2) a virtual guarntee that you will end up with worse problem than when you started in as little as 3 months;

QUESTION: I have been working with Wachovia, and they have granted me a three month deferment of my mortgage. I need to respond to them by Monday.
QUESTION 1: If I do accept this modification with them, would that mean we will be unable to continue to try to review and correct my loan?
ANSWER: Wachovia is attempting to get anything they can in the way of a signature on a new piece of paper — it will mean that the borrower is ratifying the mortgage and note. A three month deferment is in my view insufficient to give up all the rights the borrower has at the present time under Predatory Loan law (TILA, RESPA, HOEPA, Securities Law) and Securitization Law (SEC, UCC, Holder, Holder in due course, and defense of third party PAYMENT). The best way to deal with this is to say that you are willing to enter into an agreement if they answer a few questions. The main question is whether this loan, note, mortgage and/or obligation has been assigned, transferred and/or securitized and whether they can identify the real party “owning” or claiming to own the note, mortgage, and/or obligation. The way to put them up against the wall is by including a self serving statement that if they cannot answer this question, you must assume that they either cannot or will not answer the question — despite your right to know the identity of the party to whom you allegedly owe money. Your request MUST include a demand for copies of any applicable documents including Pooling and Service Agreement, Assignment and Assumption Agreement, the location of the actual original note, any allonge, and any assignment together with any documents specifying the duties of any Trustee or successor Trustee, including substitution of Trustee on Deed of Trust, appointment of Trustee for Pooled Assets, appointment of Trustee for any Structured Investment Vehicle, appointment of Trustee for owners of certificates of asset backed securities, and whether there is any record of transfer, sale, bailout, insurance payment etc to the investor.
QUESTION 2: Before I can fill out the form you sent me, it says I need two years previous to settlement of taxes. I have been remiss in filing, and am currently working on getting 2006 and 2007 filed. I do not owe money, but do not have records. WILL THIS KEEP US FROM BEING ABLE TO WORK THIS?
ANSWER: NO. The tax returns are only evidence of your ability to pay for the period of time that the tax returns cover. If you had no tax returns at the time that the loan was granted, you should add an addendum page describing what, if anything, they asked for to confirm or verify your income and who asked for it.

11 Responses

  1. Countrywide did some appraisal fraud and inflated the value of my home by $60,000. I have asked 3 times for them to give me the name of the investor that they sold this loan to, and they have refused, stating that they have no obligation to tell me who owns my loan. Can this be?

  2. If its a Countrywide fraud, first check to see if it has a Trust agreement and if its a CWALT Trust, {Countrywide cannot modify it.} Search on this site for a lawsuit with regards to the CWLT Trusts, which basically says than in order for CW to modify anything, they must purchase the loan back at 100% its value. If you’re not too comfortable fighting yourself, please ask Mr. Garfield for a referral. Their are several ways to fight but, you must understand how and why. You can rewrite and send to them everything you see here but, when they schedule a hearing on any matter, you better be able to communicate. Good luck

  3. Be careful! Do not sign a mod agreement if it has a clause in it holding the lender, any of it’s assignees, affiliates, etc. harmless of any fraud, deception or misrepresentation. If it does check w/ an attorney first.

  4. Well, I’m seeing an attorney Monday and will let you know how that goes, but I am convinced the Loan Mod document is voidable based on at least two aspects of it that were not done: it was not notarized and the payment I sent in was past the due date stated in the doc. In addition, payments have not been applied, so no more were made thereby causing it to be “null and void” per the language in the agreement.

  5. Countrywide has made a preliminary approval to go forward with a loan mod as of yesterday. The paperwork is under review by the investors (~~~?) .

    I believe that my mod will be tack my arrearages onto the back end of my loan while reamortizing it over the remaining length of the loan which they confirmed with increase my payment by approx. $500.00 per month. And now Countrywide is insisting on an escrow account that I did not have with Greenpoint which will add an additional $500.00 per month on top.

    Boy, I can’t wait to be approved!! (not.) I did specifically ask how Countrywide has the right to foreclose on my home without filing a notice of trustee sale since my sale date was scheduled by Greenpoint’s trustee when Greenpoint owned my loan (Jan. 8th). I told her that I thought that the mortgage holder (Countrywide at this point) is the only entity to pursue a trustee sale which would need to be initiated from scratch since their obviously was an assignment of the note (not recorded).

    She wrote my question down word for word because first, she had not heard that questions before and secondly she thought it warranted the attention of her supervisor who will be providing her with that info by next week when I’m told to call back.

    Should I seek an attorney now?? Do I continue to attempt to string them along a bit longer first? I’m not signing any loan mod, agreement or any paperwork whatsoever until I’ve got all my bases covered and I’m satisfied with my final outcome. Whatever that should be.

    Appreciate all your help. Thank you.

  6. Like Pat, I signed a mod with Chase (back in 2007). Also, as Mario pointed out, the loan mod agreement had Chase as the “Lender” or as the servicer of the “Holder” without disclosing who the Holder might be. A Chase signature is at the bottom.

    On this particular point of the parties to the agreement – I’m unclear what I may have ratified that wasn’t already agreed to in the original loan documents.

    I know this may hurt the “lost note” claims. Does it also substantially damage all the other attacks and defenses so much that I should just give up before I even start?

    I understand Mr. Garfield’s general warning against any modifications, but I’m sure I’m not the only reader of this blog that had already signed one long ago. Before the birth of livinglies, modification was considered by to be the “smart” thing to do.

    Mr. G is so positive about the chances of success with everything else that when I read this caution about modification, panic sets in.

  7. By the way, I am in mortgage trouble, they are trying to foreclose again by adding escrow that was part of the Loan Mod.

  8. Thank you for your comment. I have reviewed the Loan Mod agreement and it seems to me more than one thing was done by me that would allow it to be canceled, i.e., the funds were not sent to them by the agreed upon deadline, the document was not notarized, there is no document with their signature and it was not notarized as well.

    “In order for the Modification to be effective, you must perform certain pre-conditions set forth below. Your failure to comply with these conditions within the time required will cause the Modification to be null and void.”

    You must sign (in the presence of a notary public) and return the written Modification Agreement that accompanies this letter on or before blah, blah. It was not signed in the presence of a notary. Would that make a difference?

  9. Yes don’t do it if there is any possibility that you could end up in mortgage trouble. See local attorney so he can explain ratification of prior acts.

  10. I did a loan mod with Chase. Am I now screwed to send them a Debt Validation letter?

  11. I saw a loan file wher it was modified by the servicer but the servicer did not own the loan.

    How can they modify something they do not own and what is the outcome of same?

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