800-Numbers Lead to Runaround as Banks Refuse to Modify Mortgages

Rule of Thumb: If they can’t execute a release or satisfaction of the mortgage, then they can’t foreclose. And if they did, it is reversible.

Whistle-Blower: Banks Give Homeowners the Runaround

“In our managers meeting, which can last eight or nine hours, we probably addressed mortgage modifications five minutes or less,” the banker said.

Editor’s Note: The reason is simple. They want the property. They can get the property because of pandemic confusion over securitization. They can’t modify mortgages as easy as they can foreclose. They don’t have the right, title, interest or authorization to modify mortgages because they never advanced a dime for the funding of those mortgages. But because non-judicial states make it real easy for anyone with a bogus piece of paper to foreclose and get title to the property, and because investors who are the real creditors are not asserting their right, title and interest, it’s easy for a pretender lender to pick up a free house.

And due to heavy caseloads and poor understanding of securitized mortgages in judicial states, the same rules seem to apply as non-judicial states — homeowners are generally not heard on the merits of their defenses and claims. The foreclosure proceeds, automatic stays are lifted in bankruptcy court, all because the Judge is not directed to look at the paperwork.

By DAVID MUIR
March 23, 2010
// A vice president for one of the nation’s biggest banks claims customers looking for help in lowering their mortgage payments are often told to call an 800 number — where he says representatives then give homeowners the runaround.

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David Muir gets answers from a vice president of one of the biggest banks.

The bank executive spoke to ABC News on the condition that ABC News not show his face or name him, because he feared coming forward would cost him his job.

Of the 1.1 million homeowners who’ve signed up for the federal program aimed at avoiding foreclosures, only 168,000, or 15 percent, of homeowners have had their mortgages permanently modified.

“In our managers meeting, which can last eight or nine hours, we probably addressed mortgage modifications five minutes or less,” the banker said.

Americans Frustrated by Banks

Jay and LeeAnn Givan are two of those frustrated Americans who reached out to ABC News about their banks. They say they’ve run out of time and money. Both lost their jobs in the recession, and they have been begging their bank since last September to modify or refinance their mortgage. Six months later, all the paperwork and phone calls have amounted to nothing.

“The bank’s not interested in helping us,” LeAnn said. “Just a couple of weeks ago, Jay was on the phone for two hours being transferred from department to another department until finally somebody told him, ‘Look, we can’t help you until you stop paying on your house.'”

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The couple made its last mortgage payment last week.

“I have heard that,” the banker said. “That will affect their credit card, their insurance, [have] a big effect on their credit history.”

The banker described homeowners pleading to him for help, but he said his bank is not interested in modifying mortgages, even after taxpayers helped bail out the nation’s biggest banks.

“It’s just not happening,” said the banker.

The banker said there is significant pressure on bank employees to get customers to take on more accounts than they need because of the late fees and penalty fees that will then co

I have watched the news story about Banks helping with Foreclosure etc…..THEY WILL NOT HELP if they are WELLS FARGO…..They were terrible with my 82 year old mothers mortgage.After being a loyal customer for years shw was not able to get help from me with her mortgae because I was laid off and at that time for a year already….They ASSURED us that a modification was to be done and to NOT PAY anything until it was completed because those payments would be included in new mortgage….we called for months and tried to make some payments only to have house start into foreclosure with their lawyers, be served embarassing papers and be put into undue stress. Went thru Wells President John Stump and 4 other Board members to only be told BANK OWNING YOUR MORTGAGE WILL NEVER AND WOULD NEVER HAVE DONE A MODIFICATION. Why were we told it was being worked on for over 6 months…why a run around like that to a senior citizen who has worked her whole life. End result was COME UP WITH $4500 IN 2 WEEKS or bye bye home your out of there. Terrible to do to anyone. I had found out we were one of 10’s of thousand that Wells did exactly this to also. Just google that problem and you will see. SHAME ON WELLS FARGO and all these banks taking money from us and the government and putting people in worse trouble.
barkleyandme1 11:16 AM
Americans like to sue over everything. Seems like there is grounds for a class action suit against the banks. They used my money for what seems to be strictly their benefit and bonuses. Where are all the lawyers now. Let’s bring suit against the banks for not fulfiling their obligation to the publc. We bailed them out in good faith and they turned around and screwed us.
tjbmeb 9:33 AM

S.W.Florida..I have applied for a modification with Select Portofolio Service, as of this date I have NOT received any information other that it is under review. After reading all the horror stories on this site. I have deceiced that if the modification doesn’t go thru I will foreclose. I will walk away with no hesitation. Why should I pay good money for a bad investment. My money was solid when I purchased the home. However with all the greed from lenders over inflating homes I have no pity. I worked too hard for the American Dream only to be disappointed by Wall Street greed. Come on Obama put your money where your mouth is!

13 Responses

  1. Its like you read my mind! You appear to know so much about this, like you wrote the book in it or something. I think that you can do with a few pics to drive the message home a bit, but instead of that, this is excellent blog. A great read. I will definitely be back.

  2. Pj,

    I used to actually work for a collection agency NARS in which these two jerks Kreisman/Shapiro are down as the board of directors per MO SEC OF STATE. I received two RECUSALS and ABSOULTELY NO HELP…Except to be called a frivolous litigant for trying to tell the truth.

    The Dept of Justice just thinks I should take it on the chin! When you lie about the rights I have within my job(Being told I have the right to SELL MORTGAGE Notes for one of the largest banks in the WORLD Chase). So somehow they have more than a small relationship…Especially if you figure out their also part of 1st American Title…If u lie to me u deserve anything coming your way! I like any other American don’t like being lied to about my livlihood or who exactly I AM…To hire an atty to lie and not do his job deserves removal of licensing I believe as well.

  3. are you doing this on your own or do you have a lawyer any good lawyers out there!!!!!!!!!!!!!!!!! one that does not join in the rip off!!!!!!!!!!!!!!!!!!!

  4. right on its time obama hit the banks hard i have hope he will and if i lose my house he will lose my vote and my familys! obama and his administration need to do something for the american homeowners and we need to put pressure on judicial system to throw the books at the banks high priced lawyers when they dare to appear in foreclosure court!!!!!!!!!!!!!!!

  5. 2 Topgun,

    Well aware of the “under the radar” Shapiro “network’ with 20 plus associate law firms all over the country. They usually are associated with one or two person law firms with staff willing to produce fraudulent documents, also via MERS. Shapiro & Dicaro the NY office are a Fannie Mae recognized law firm, so your point is well taken…. But perhaps with them losing high profile case, being sanctioned in NY & FL courts, they to will be the next to be cut loose.

    They are a foreclosure mill for the servicer and not the “trustee” though I have seen filings by them under “a trust’ xyz , but SEC filings are very convoluted as Neil points clarifies in the post on resecuritization above. A seller in one filing can be a depositor in another filing for another trust, a document custodian in another filing etc.

    But you are correct until the judiciary “gets it” all of that is of no matter. But it is just my simple opinion that in the past this s*@t could fly, but the meltdown was to rapid and systemic, leaving some messy, untidy and not easily fixed problems for those involved.

    In the current environment the undisclosed “investor” is loosing big time, and the current DC/WS fix’es aint fixin anything, when people are out of jobs and out on the streets there is no economy to adjust. There is in fact no economy at all, since each and every “AVERAGE ” American has contracted their spending , this is why all of the government incentives to home buyer’s are extended month after month….. and HAMP has been revamped, and HOPE 4 Homeowners has been a nightmare.The list goes on.

    With that the Fannie directive needs to get some traction with research, it reeks of something, just do not know what, but this is something that should not be overlooked, and as stated before a directive that should be questioned in people appealing their foreclosure.

    The question , Why is a GSE bailed out by THE AMERICAN TAXPAYER, dropping MERS????

    Perhaps we should all write, call, submit a FOIA to Fannie and our elected official’s first thing and ask for a clear explanation of this action. Oop’s that’s right Obama has given Fannie protection from FOIA requests…..

  6. Can anyone help me? Could it be possible to not have your mortgage listed on SEC website. I have gone under BOA for months and cannot find my loan. Maybe it is not listed under BOA. Fannie Mae was supposedly the investor but found out that is not true from Fannie Mae. Any help would be appreciated. My mortgage was 8/10/07.

  7. Trip Wires
    Can someone check this ????????????
    He is from California.
    Is this possible in Florida ??

    http://www.foreclosureforum.com/index.html
    by Ward Hanigan
    Dealing with foreclosures as extensively as we do we have come across some very inventive devices people use to protect their equity in real property. In essence, they purposely cloud the title of their properties to shield them being mulcted by outsiders or by a rogue trustee, through the use of a recorded “friendly deed of trust” or alternatively, a recorded “option to purchase”. Herein below is one practitioner’s description of the devices and her uses of them.

    Friendly Deed of Trust
    If, in addition to your bank’s loan, there was another large trust deed recorded against the title of your property, one which you controlled from behind the scenes, you could protect your equity in a couple of ways. One is that a search of the public record would reflect very little, if any, equity available for a creditor to seize. If there’s nothing to grab, that fact will usually dissuade most vultures from hassling you any further.

    But, if in spite of little or no apparent equity, someone pursued a lawsuit against you, you’d be set up to use another tactic. And that’s to cause the friendly trust deed to foreclose and wipe off the title of your property any subsequent judgment someone might record against you. The foreclosure of the friendly trust deed would extinguish any liens that were recorded against it after the friendly trust deed was recorded. Yes, such liens could very well remain against you personally, but they wouldn’t be secured by your property any more.

    You’d arrange it so that the balance of the foreclosing friendly trust deed would be high enough to dissuade any outsider’s bid at the foreclosure sale. Thus the foreclosing beneficiary of the friendly trust deed would take title to the property…probably in a title holding trust. It would be clear of any liens except your lender’s first deed of trust. Thereafter, to explain your continued occupancy of the property you’d probably execute a lease, or maybe a lease with option to buy, from the trust. Your rent could be the requirement that you continue to pay directly, the property’s PITI (principal, interest, taxes, and insurance) and all maintenance and repairs. Thus you might still be able to take whatever income tax deductions there are involved.

    The paperwork involved is fairly simple. The basic, three forms you’d need would be a deed of trust, a “straight” promissory note and a deed of reconveyance. To make things even more bullet proof you could also employ a recordable assignment of the friendly deed of trust over to a holding trust. Then you’d just hold the assignment and only record it if it made sense to switch beneficiaries in the future.

    On the deed of trust you could show the beneficiary and the trustee to be the same party. Thus you’d have no problem getting your chosen beneficiary/trustee to give you a recordable reconveyance of the friendly deed of trust at the same time you made it out to them. Of course, you’d hold that reconveyance in a safe place…ready to record any time it suited you (i.e. upon the future resale or refinance of the property). It’s important to get that reconveyance right up front, years in advance of when you’d actually need it. That way nothing could happen afterwards that would prevent you from removing the trust deed from the title of your property whenever you wanted to.

    For your added protection you would NOT actually create any promissory note to accompany the “friendly” trust deed. That way your “friendly bene” couldn’t sue you on the debt later, nor could she initiate any foreclosure action without the promissory note.

    If you determine some day that you need to produce a promissory note, it probably would be in the format of a “straight note”, with all the unpaid principal and accumulating interest due and payable at the end of the term. Thus, as time goes by, the protective debt balance would grow larger and larger. Usually no interim payments are called for in a “straight note” so you wouldn’t have to worry about manufacturing any payments for appearance sake if the genuineness of the trust deed and note is being investigated.

    If you owned multiple properties you could record multiple friendly deeds of trust or create just one in the form of a blanket deed of trust that encumbered all of your properties.

    Option To Purchase
    A novel, simple alternative to the “friendly deed of trust”, when guarding against the actions of a rogue trustee or an aggressive creditor, is the use of a recorded “option to purchase”. It would effectively cloud the title of the subject property sufficiently enough to render any subsequently recorded deed impotent.

    The details regarding the recorded option, such as the option strike price, the time period to exercise it, etc. are incorporated by reference to a non-recorded option contract that only the optionor and optionee are privy to.

    The removal of an option from the title of real property is accomplished by recording a pre-executed quitclaim deed from the optionee to the optionor. It goes without saying that you’d be holding that signed, notarized document concomitant to when you recorded the option against your property.

  8. Pj,

    In regards to this post–
    2 Tony thanks for aggregating this information. It is helpful to many.

    One question what not only will Fannie Mae but the Fed do with all the “toxic loan’s” it purchased over the last year and a half that have MERS assignments on them?

    Hopefully people that have already been put through fraudulent foreclosure hell in a Fannie Mae loan will have recourse here, indeed all with MERS assignments should be looking at this very carefully regardless of a Fannie backed mortgage. One more link in the chain seems to have broken!

    There seems to be no RECOURSE FOR THEM…Check out cases under Spapiro Atty Network-LOGs.com…They are two of the top 4/clsre trustees nationally. The dept of justice is covering for them…They are AIDING AND ABEDDING CRIMINAL CONDUCT BY FEDERAL AND STATE JUDGES/ATTYS…None of the banks seem to be following the rules. The title companies are in on it as well. Notaries are involved…Fannie and Freddie should of been left to die like Lehman and Aig if you ask me…Along with the rest of the banks..

    Its not just a general EDUCATION NEEDED BY THE MASSES NOW WE ALL HAVE TO BE ATTORNEYS OR ELSE OUR BELONGINGS COULD BE STOLEN FROM US…I KNOW SOMEWHERE THERE has to be GOOD ATTORNEYS AND JUDGES LEFT!

  9. 2 Tony thanks for aggregating this information. It is helpful to many.

    One question what not only will Fannie Mae but the Fed do with all the “toxic loan’s” it purchased over the last year and a half that have MERS assignments on them?

    Hopefully people that have already been put through fraudulent foreclosure hell in a Fannie Mae loan will have recourse here, indeed all with MERS assignments should be looking at this very carefully regardless of a Fannie backed mortgage. One more link in the chain seems to have broken!

  10. Is anyone else having problems with CitiMortgage leaving messages stating to return their call, but then give a phone # 1-866-274-8869 when we try and return the call the # isn’t theirs, it belongs to a nice man in Clevland Ohio that has no idea why people dealing with CitiMortgage keep calling his #…
    I’ve talked with him a few times and the # he says is his, is a totally different # then what we dial….

    Blessings to all…

  11. Check this read out this, Fannie Mae says stop using MERS name in foreclosing actions.

    http://www.mortgageorb.com/e107_plugins/content/content.php?content.5590

  12. The entity Select Portfolio Services is mentioned in the Article. “Select,” located in Utah, is actually a part of “Credit Suisse,” a/k/a/ Credit Suisse First Boston. Credit Suisse bought “Select” as well as their companion outfit “DLJ Mortgage Capital” as part of their foray into high-interest loans in the sub-prime market. “Select” is specifically organized within C.S. to seize properties. If you end up with “Select,” then file suit against Credit Suisse, 1111 Madison Avenue, NYC, and “Select” in response. C.S. has been denounced by one sitting federal Judge as an “international predator bank.” See: In re Yellowstone Development, Montana USBC. They are notorious for “buying” notes on mortgages in which the previous party had no interest, and in which they have no interest, which they then try to foreclose in the names of defunct companies that no longer even exist. Think of it as international fraud on a grand scale.

  13. tjbmeb,
    The loan modification process is long and very frustrating. Even worse, without principle reduction, it is a waste of time. You may end up with a smaller monthly payment, after completing your “trial” period, but in the end, you will owe more now, than when you started.
    Not to mention, you, after getting a modification, will be trapped in your home until the market recovers enough to cover how much you are underwater as far as value goes.

    Walking away shouldn’t be your next option. If they try to foreclose against you, there are ways to stretch that out for quite a period of time.

    Once the foreclosure is filed, usually by one of the foreclosure mills, that is when the fun starts.
    Have someone who knows how to answer the summons prepare a proper answer with an affirmative defense.
    Depending on how many mistakes have been made, the foreclosure may go away for quite some time.

    I cannot get into specifics regarding my situation, however, we were one trial date away from losing the home. Now, we very well may file suit and end up with either a loan mod we are comfortable with or the home free and clear. In a nutshell, the tables have turned.

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