Editor’s Note: I recommend going, if nothing else to network with other homeowners. But don’t get fooled into signing papers that create a new mortgage with virtually the same terms as your old mortgage. Also remember nearly all of these “modifications” are “trial modifications that put the homeowner back in the foreclosure mill.
Homeowners Seek Help at Glendale Foreclosure Event
By THE ASSOCIATED PRESS
Filed at 12:05 p.m. ET
GLENDALE, Ariz. (AP) — Hundreds of homeowners trying to avoid losing their homes to foreclosure met with housing counselors and lender representatives at an event in Glendale on Thursday.
At least 500 homeowners met with counselors approved by the federal Housing and Urban Development Department, and then representatives of their lenders. The outreach event was organized by federal agencies under the Obama Administration’s Making Home Affordable program.
Up to a third of those attending similar events in recent months left with a trial home loan modification or a start toward one, said U.S. Treasury Department spokeswoman Andrea Risotto.
The program provides incentives to lenders to modify home loans for people unable to make their payments, whose homes are worth less than what is owned or whose mortgage terms are unsustainable.
HUD-approved counselors provide the advice for free, and thoroughly review the homeowners’ finances and ability to pay so they can give advice about the best options, Rizotto said. So do the bankers.
But finding out what help is available is up to the homeowner.
”For some homeowners, this is the first step they take to get help,” Risotto said. HUD-approved counseling is free anytime, Risotto said, and homeowners don’t need to pay money to private firms to get advice.
Arizona is one of the five states hit hardest by foreclosures, and although the nation’s home foreclosure crisis is showing some signs of easing, it is expected to persist.
Figures released by the Irvine, Calif.-based foreclosure listing company RealtyTrac Inc. on Thursday showed that one in 418 homes received a foreclosure notice last month. That’s down slightly from January but still totaled more than 308,000.
Avoiding a foreclosure notice is just what drew Surprise resident Denise Knott to Glendale. Her home, bought in June 2008, has plunged in value and her fiance hasn’t been able to find work in construction. Still, the retail manager isn’t ready to walk away from her home.
”I’m hoping to get my mortgage modified and get into a payment that I can sustain,” she said as she clutched a file stuffed with documents.
But Knott is also realistic of her chances of getting a modification that lowers the debt to a level that makes sense.
”I look at it this way,” she said. ”I love my home, I want to keep it. But I really might be better off letting it go and renting.”
A second day of the event is set to run from 10 a.m. to 6 p.m. on Friday at the Glendale Civic Center.
// //
Filed under: foreclosure |
Deontos
Yes, thank you again. I am not a lawyer either and I do not offer legal advise – only speculation as to educational “theory”
I am just trying to find avenues that homeowners may pursue. I have been encouraged by some bankruptcy judges that doubt standing in courts. I think these judges may be adhering to “real party interest” law more than judges in state and federal courts – because the essence of proper identification of the creditor is essential in bankruptcy. Other judges that are not trained in this area – just often appear clueless and without granting proper discovery.
Partial discharge of loans under water should be universal. None of this ever makes it to the Supreme Court of the United States. And yet, very different circumstances are apparent from the mortgage crisis the public has RECENTLY endured. Again, I believe we are not getting support from the US government. Apparently, the amendment to HR 4173 to include mortgage modifications in bankruptcy was rejected as part of the package for financial reform. See below.
“Cramdown Provision of HR 4173 Fails
December 16, 2009 by christine
The New York Times reports that the cramdown provision of HR 4173 was eliminated from this legislation. Here’s the pertinent part of the story:
“Heeding complaints from banks, the House rejected an effort to allow bankruptcy judges to restructure mortgage payments, a plan that has passed the House before but not the Senate.”
Disappointing, but not surprising. ”
Now my question is – did the people ever contact their Congressional representatives?. We should be bombarding the reps with letters – and letters to President Obama – who appears to be a great disappointment. Also disappointing is the Republicans who vote down every measure initiated to help people in foreclosure ( and I used to a Republican).
Without support from our government, we will continue to battle judges that are clueless to the process, and clueless to the fraud that has been ongoing on for years.
Time to contact your reps – and also fight for fairness as a group.. As of yet, I see no bill that legislates fairness to the American people who are losing their homes due to Wall Street charades and fraud.
Note: I am not in foreclosure but I am appalled by what is going on – and, I am appalled that people who are victims have absolutely no voice in Washington. We are allowing others to drown out our voice. Need to stand together.
Anonymous
I am not an attorney. I am not offering legal advice. Just “Comments” and “general conversation” about the “instant” questions.
Chapter 13 Lien Stripping of 2nd Mtges where current value of property is LESS than the value of the first mortgage. CASE LAW is available.
Chapter 11 “Motion to Value Collateral” under some circumstances is being done and REDUCING remaining 1st Mtge liabilities. This is IFFY and very dependent on each cases “FACT PATTERN”.
Nothing I have had mentioned here should be construed as LEGAL ADVICE. Consult an Attorney for THAT. I’m just sayin’ what I read somewhere. Anonymous, does that clarify?
Apparently mortgage modification in bankruptcy is, or was, part of the legislative consideration under HR 4173 (Reform). Do not know the current status and talks broke down between Dems and Rep. on Friday. Dems are supposed to divulge their bill on Monday – do not know if this will still be included.
see below.
H.R. 4173: Congress Proposes Bankruptcy Mortgage Modification Legislation…..Again
Posted by Moderator on 12/09/09 • Categorized as Bankruptcy News, Chapter 13 Bankruptcy, Mortgage Modification
“house keyA Bankruptcy Mortgage Modification Amendment has been introduced as part of the Wall Street Reform and Consumer Protection Act (H.R. 4173) by, among others, Representative Conyers, a Democrat from Michigan. The bill would allow Bankruptcy Judges to modify first mortgages on consumer’s primary residences in chapter 13 bankruptcy plans. Borrowers who owe more than their homes are worth would have the opportunity to force their lender to re-write their mortgage to come in line with the value of the home. For example, a family in California who owes $275,000 on a first mortgage and has seen their home value drop from $300,000 to $150,000 in two short years, would be able to re-write their mortgage through a chapter 13 plan so that the principal amount of the mortgage debt would become $150,000 which is equal to the current value of the home. The $125,000 that represented the “underwater” portion of the mortgage would be treated as unsecured debt paid out at much less than 100% through the life of the chapter 13 plan.
Many will remember that a similar effort spearheaded by Senator Dick Durbin failed earlier this year after the proposed bill took heavy fire from the banking lobby. H.R. 4173 is very similar to Senator Durbin’s earlier reform proposals which were first introduced in 2007. Ironically, the resurgence of bankruptcy reform legislation has been caused by a complete unwillingness on the part of banks and servicers to modify mortgages. Under current law, lenders are not required to modify first mortgages on borrower’s primary residences in bankruptcy. However, borrowers who owe more than their home is worth may be able to have second or third mortgages modified. Current bankruptcy law does allow for second and third liens to be stripped from borrower’s homes.
John O’Connor”
Deontos
Thanks. I know the loan mods are bogus. My question was- in bankruptcy is the amount owed over the current home worth considered “unsecured” and, therefore, discharged in bankruptcy? And, since loan mods are simply a modification of the original contract, and since the original stated lender is likely defunct, any loan mods in the name of the servicer are invalid. There appears to be some success in bankruptcy courts in flushing out the current creditor. Thus, a good bankruptcy attorney could force identification of the current creditor and simultaneously discharge mortgage principal in bankruptcy if the loan amount exceeds home collateral and this amount can be discharged. Then a load mod could be done with the real creditor and address interest rate. My question is – can it be discharged? I think second mortgages are considered unsecured and that the bankruptcy bill, which was rejected by Congress, would have allowed discharge of loan principal on first mortgage for under-water homeowners. I do not understand why a bankruptcy bill was needed to achieve this because how can an under water mortgage be secured by collateral that does not exist?.
ANONYMOUS
The Real Deal here:
(another REPOST)
HOW TO NEGOTIATE A MODIFICATION
Posted on December 2, 2009 by Neil Garfield
http://livinglies.wordpress.com/2009/12/02/how-to-negotiate-a-modification/
SNIP:
My statements here relate to general information and not legal advice. Generally we are of the opinion that the loan modification programs are a farce. First they end up in foreclosure in 6-7 months — more than 50-60% of the time. Then you have the problem that you signed new papers that will at least attempt to waive the rights and defenses you have now. A trial program is a trial program — it is not permanent. It is usually a smokescreen for the “lenders” (actually pretender lenders) to appear to comply with the federal mandate and thus collect the bonus from the Federal government for entering into a modification agreement. And let’s not forget that the entities with whom you would enter into this “new” agreement probably have no rights, ownership or authority over your mortgage — they are only pretending. Their game plan is that they have nothing to lose and everything to gain because they never advanced any money on the funding of your mortgage.
So the very first thing you want to do is ask for proof of real documents that can be reviewed by a forensic analyst which will demonstrate they have the power to change the terms, and assuming they can’t produce that, their agreement that any deal you enter into with them will be taken to court in a Quiet Title Action in which they will allow you to get a judgment that says you own the house free and clear except for whatever the new deal is with the new lender. The New Lender is necessary because the REAL Lender is quite gone and possibly unidentifiable.
MUCH MORE AT ACTUAL LINK
Anonymous. Here is a REPOST from February 2009
——————————–
Problems with a Loan Modification: 10 POINTS TO CONSIDER
Posted on February 3, 2009 by Neil Garfield
SUBMITTED BY NY
Problems with a Loan Modification:
1. The borrowers will think they are modifying their current loan when in fact they are starting all over again.
2. The Foreclosing entity which lacks standing to bring lawsuit, is not authorized to modify anything since they are not the owner of the loan in question.
3. Since the real parties in interest are no where to be found, they are taking it upon themselves with the help of their lawyers to steal your property.
4. The borrower is actually getting a new loan which may enjoin borrower from rescinding new transaction.
5. The foreclosing entity is STILL not using their own funds to modify (new loan) loan. They are getting funds to lend borrowers through Federal bail outs, insurance proceeds and believe it or not Investors. [same process]
6. Their lawyers are not acting in a lawyer’s capacity but as BROKERS; [middlemen] they are getting paid commission on every new loan they help brokered.
7. What Does Loan Modification Mean?
A modification to an existing loan made by a lender in response to a borrower’s long-term inability to repay the loan. Loan modifications typically involve a reduction in the interest rate on the loan, an extension of the length of the term of the loan, a different type of loan or any combination of the three. A lender might be open to modifying a loan because the cost of doing so is less than the cost of default.
8. Why would they need to re-qualify if they claim they would make the borrowers payments and rates to be less?
9. The borrower took the loan out with lender “A” but an unknown lender “B” is trying to modify it.
10. When the modification is said and done, the borrower will have lender “B” as the lender. What happened to lender “A”???
What I do not understand is why the government is not enforcing principal reductions.
People who are being giving loan modifications will never be able to refinance with another lender. They are stuck. The current creditor/lender is making windfall profits even when the loan is modified. This is because the loans have been purchased at steep discounts but borrowers are required to repay the loan in full.
Question for any bankruptcy attorney – if the home value has significantly dropped, then is the amount owed over the home value considered unsecured? And, therefore, can this amount be discharged bankruptcy? If this is the case, why would anyone do a loan mod without first declaring bankruptcy?
Also, if the servicer is not disclosing the actual creditor , then the loan mod has flawed title. People may be doing loan mods to save their home without actually having valid and legal title. Mr. Garfield has brought up the title issues – and this is a very serious problem.
Do you know who gets hired as HUD loan counelors? I do, old loan servicing reps. ask your conselor where he/she used to work, 80% of the time it will be your past or present servicer.
To Jan vanEck- thanks for taking time to answer my question at great length. I appreciate it.
from the above- “….one in 418 homes were in foreclosure, down slightly from the previous month…” When I saw this in the news the other day, I thought ” but Feb. only has 28 days instead of 30 or 31, so I think I roughly figured that the foreclosure rate actually increased on a per-day basis, but who is feeding these figures to the media? In Hank Paulsen’s “Too Big To Fail” bestseller, in 539 pages of print and a 60 page bibliograpy, subprime lending is mentioned just 8 times, for a total of less than 1 1/2 pages chopped up into meaningless sentences . Securitization is mentioned less. In this week’s Vanity Fair, a must read on the first sale of subprime CDS to an unknown internet investment advisor, Michael Burry M.D. He wanted to short MBSs, but there was no way to do it, so he convinced Deutschebank to issue them, then he looked for the worst loans, in Deutschbank’s trusts, and bet against them. It was almost an entire year before anyone else bought any. Maybe this info will help someone battling Deutschebank.
I agree with Dave, not only are they a joke, but are dangerous as well. We identified the criminal trap, when applying for a loan mod, last year in a press release.
Moreover, unbeknownst to the homeowner although the homeowner will be saving money by having a reduced monthly mortgage payments, these savings are not forgiven. The amount of savings is actually set aside as a balloon that the homeowner must pay upon sale, refinance or the maturity of the loan. So if the home is not already underwater, in most cases it will be after the five year modification term.
Also attorneys need take note that it’s malpractice for an attorney just to provide a loan modification service.
They had this on the local news here last night; claimed some lucky homeowners were being given loan-mods on the spot. Gotta love the media – sock puppets of the government.
Steve
99Libra@gmail.com
What a joke!
You need to research economic duress as a tort action in equity … because that’s what loan mods are … a situation that puts the owner in a condition of economic duress, which is actionable.