WHY MODIFICATIONS ARE NOT WORKING: INVESTORS KEPT IN THE DARK

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INVESTORS ARE KEPT OUT OF THE LOOP

There is an underlying theme in the main stream media as to why modifications are not working. They cite the fact that so many of the modifications end up in defaults anyway, as though it was the borrowers’ fault that the modifications didn’t work. The opinion, unexpressed, is why bother — they are going to default again later and most of them don’t qualify. ALL OF THAT IS WRONG, WRONG, WRONG. It’s not the borrower that is bad, it is the deal. This is the same thing as when they originated these absurd mortgages in the first place. They couldn’t work. And they didn’t. Somehow, the pundits think that if you offer the same deal again it will somehow work now with the economy in the tank? Hello?

  1. The main reasons that most loans don’t get modified is that the modifications are processed through servicers whose incentive is strictly in foreclosure. If there was any real incentive for them you can bet they wouldn’t lose the paperwork 15 times. Servicers have no interest in modifications and they are under intense pressure from the mega banks NOT to modify because that would reduce the value of the mortgage bonds, which in turn would reduce the assets on the balance sheets of the mega banks. Make no mistake about it. The servicers are working for the banks and not the borrowers, nor do they pay any attention to government policies intended to shore up the modification programs.
  2. The main reason modifications are turned down is that servicers are ignoring the math for the above reasons. In actual calculations by experts running algorithms developed by the U.S. Treasury department, 80% of the loan modifications would benefit the investors far more than foreclosure. But the servicers would make less — far less, because they end up eating up the entire equity in the property with their ridiculous fees.
  3. The main reason that loan modifications can’t work in today’s climate is that the investors are being kept out of the loop. In order to really work, there must be an incentive for homeowners to stay in the home and pay the debt that is being offered to them. There must also be an incentive for investors — to see that they will recover more of their money with a principal correction than if they foreclose.
  4. Loan modifications are currently a farce. The values used on the appraisals when the loans were originated were far too high to be sustained in any real market conditions. With foreclosures still piling up and the inventory of homes to be dumped on the market without any real limit, prices are continuing to drop to historically low levels with no end in site. Foreclosing is therefore the problem, not the solution. The reality is that the homes are worth perhaps half, at best, of what was used as value when the loan was originated. Pretending that the debt is worth the old false value used to originate the loan is not going to make it true.
  5. If you really want to save the day for homeowners and investors, then you need to some REAL transparent calculations that the investors are allowed to see, where the comparison is made between foreclosure proceeds and the proceeds of modifying the loan with a principal correction to reflect current value. Why would any homeowner agree AGAIN to use a figure that is so high that he knows that he will not repay it in his lifetime and the value of the home will not reach those meteoric heights in his lifetime?
  6. If investors were allowed to see the modification proposals and apply their own calculations to the deal, there would an enormous jump in the number of successful modifications. That won’t happen unless the investors demand it.

46 Responses

  1. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, modifications, quiet title, rescission, RESPA, securitization, TILA audit, trustee, WEISBAND Livinglies’s Weblog […]

  2. I do not see either, carie.

    Whistle blowers — keep it coming.

  3. Oh…I didn’t see that part…

    I’m sure “whistleblowers” are being silenced, though…in varying ways…

  4. I don’t know carie, that woman seems pretty out there. She thinks the “goons” are experimenting on her while she sleeps…

  5. Here it is—I figured it out: reportingwrongdoing.com

  6. Okay—some comedy relief here—you HAVE to watch this Jon Stewart clip about the NY cop who pepper-sprayed (not funny), the women on Wall Street—absolutely hysterical toward the end—must watch the whole thing):

    http://www.thedailyshow.com/watch/thu-september-29-2011/democracy-on-the-lurch—wall-street-pepper-spray-incident

    It’s a classic.

  7. BSE:

    RE. the video of the woman talking about bank whistle-blowers being silenced you posted yesterday:

    BSE, on September 29, 2011 at 10:09 pm said:
    OCCUPY WALL STREET – SPEAK OUT !!!!!

    PLEASE—can anyone make out the dot com site she mentions (that is a whistle-blower site), at the end of the video? I can’t quite understand what she is saying—thanks!

  8. Hello Neil and Happy New Year to those readers of the Jewish Faith.
    Just a Friday update on the FOIA and mortgage-related ethics complaints I am dealing with so you can see

    1. What I am seeking.
    2. How ridiculous the government responses are.

    http://mortgagemovies.blogspot.com/2011/09/kingcastmortgage-movies-shows-how-to.html

    FRIDAY, SEPTEMBER 30, 2011

    KingCast/Mortgage Movies shows how to deal with recalcitrant government attorneys on FOIA and Public information requests: Martha Coakley, U.S. Trustee, NH Bar Discipline.

    Also thought I would throw in the Occupy Boston video, not sure if I shared that one with you yet…. love the Golden Showers guy.

    http://mortgagemovies.blogspot.com/2011/09/kingcastmortgage-movies-checks-in-on.html

  9. Hackers leak data of JPMorgan Chase CEO James Dimon

    http://stopforeclosurefraud.com/2011/09/30/hackers-leak-data-of-jpmorgan-chase-ceo-james-dimon/

  10. @jg – also search for Speleos. and one in california by the name Astra or similar

  11. Unions in New York join Occupy Wall Street .

    http://stopforeclosurefraud.com/2011/09/29/nyc-transit-union-joins-occupy-wall-street/

  12. Found this at attorney Lenore Albert’s website and put it at scribd:

    http://www.scribd.com/doc/66907845/Hamp-Private-Right-of-Action-Yes-says-MA-Court-2011

    The other case I know of which found the homeowner has a right of action against the banksters for refusal to modify (read subsidize) is
    Upke in NJ. These cases, especially Upke, are under way. I’ve lost track of Upke, but anyone who has been refused modification unfairly could
    “borrow” the complaint’s language and other arguments. The Upke attorneys are heroes in my book. Love their writing style and attormey Malone’s depo of MERS slime-dog Wm Hultman. Pretty sure this is a pro bono case. I haven’t read much of the case linked above yet, but it must have been well-argued for homeowners to dodge the banksters invariable motion to dismiss / summary judgment.

  13. Volatility on Wall Street – Re-regulate – Get rid of your US Senators
    and one President..

  14. Volatility on Wall Street – Re-regulate Get rid of Congress

  15. UNLEASH Bill BLACK
    BANKS GOT BAILED OUT – We got SOLD OUT !

  16. MARCH on Wall Street – Hell March on DC..
    Get rid of the Obama wrecking crew ! and the bag of Clinton cronies who caused this mess.!

  17. http://www.youtube.com/watch?v=yRTthd1VFRU&feature=related

    This does not just have to be on Wall Street – Protest in your own State..Call your lazy ass AG…

  18. TAKE on THE BANKS

    http://www.youtube.com/watch?v=yRTthd1VFRU&feature=related

    Lets get these BASTARDS !

  19. OCCUPY WALL STREET – SPEAK OUT !!!!!

    http://www.youtube.com/watch?v=PvPe2lBVmaA&feature=related

    This lady is worth a watch !

  20. OCCUPY WALL STREET

  21. http://www.youtube.com/watch?v=8lrGZnKf888

    OCCUPATION WALL STREET

    LETS get these BASTARDS

  22. @Foreclosureinfosearch
    If you response to move on or move out was some sort of motivation or support, you fail. Not all of us understand, but are willing to learn. Would you like to learn how to construct a 500 million dollar hospital ? Many people caught in this heist are not as arrogant you.

  23. That is what you have been missing. Just not going back enough —
    otherwise — you have good points!!!

    No I have always had it. ! U understand…Do you ?
    Its a service I charge for and attorneys wont listen and consumers get screwed. There is more , (insider more) Believe me copywriters, mischief makers, purveyors of the piccolo and Danny E ukelele research – way more than meets the eye .

    So careful ! Careful what you copy here …

  24. Roger

    You read ..but do not listen .

  25. Modification is for pulling the pool cert from an insurer. They wont make good until a lender shows a reasonable effort to comply with TARP provisions. Modifying loans BS , suckers play …..

    Servicing is prohibited under 1122 Ab -No can do under GAAP and etc . . . Why are we talking about this …

    Lady , Sir , are you going to be the first modification to ever get done
    Move on …or move out !

  26. And to that you must be correct. My completed modification was suddenly lost 5 months after modifying……………

  27. uh, somebody explain how they can MODIFY what they don’t OWN.

    They just want more money, they never let the modifications stand. Many months after entering into a Mod, they just yank it off the table for apparently no reason. You don’t have to be late on a payment!

    There never was any “modification”. It was a ruse.

    It’s just to give the appearance of acting in good faith, when there is neither the intent, nor the capactiy. More smoke & mirrors.

  28. And now that the judge wants to hang me, I am going BK. Let the games begin anew!

  29. Thanks, Maher. That’s about all there is to say.

  30. Oh and —quote — “The foreclosing party must have a legal or equitable interest in the mortgage”. — not by new creditor definition — only legal title. And, if court does not agree — go to BK.

  31. foreclosureinfosearch

    That is what you have been missing. Just not going back enough —
    otherwise — you have good points!!!

    Up to you —

  32. The lender pledged the mortgages converted into financial interests. The financial interests are common shares of the REMIC. The mortgage represents a five year bond . The bond is underwritten at 1:4 ratio to the preferred shares. Its due to the allocation of cash flow to principal or goodwill.

    If you take the mortgages and pledge them to the bond as a deed for bond – the foreclose .

    If you take the mortgages and contribute these assets to paid in capital you substitute one consideration for another.

    When you subordinate the issuing entities consideration to the deal – that’s for purposes of preference.

    Preference over the mortgage is equitable title confiscated by the lender. The borrowers loan is placed into a role of a gratuitous surety.

    I’m tired of holding back what I know and playing this guessing game with the attorneys and the public. Securitization, Vatican pontification and righteous Secularization audits or one economy gig after another does nothing but confuse the judicious. It’s getting late in the game you see. RESPA, TILA, MERS and Ukelele theory wont work.

    Again if the principal debtors contract is altered by act of the creditor, with or without the principals consent , the surety is always discharged.

    The liabilities are removed from the balance sheet offset by the receivable or bond, an asset held by the member banks as the obligee. The foreclosing party must have a legal or equitable interest in the mortgage”. The rules stand by operation of the law. … the party must have a legal or equitable interest in the mortgage (Katz v East-Ville Realty Co., 249 AD2d 243, 243). “foreclosure of a mortgage may not be brought by one who has no title to it.” (Kluge v Fugazy, 145 AD2d 537, 538). An assignee cannot maintain an action for any part of a claim which has not been assigned to him. (Works v. Winkle , 234 S.W.2d 312, 315 (Ky. App. 1950)).A mere expectancy is not enough to establish standing; a party must prove a “present or substantial interest.” Plaza B.V. v. Stephens, 913 S.W.2d 319, 322 (Ky.1996)(quoting Ashland v. Ashland F.O.P. No.3, Inc., 888 S.W.2d 667 (Ky. 1994).

    Change in the contract , performance of which is guaranteed is a change of the debtors contract that is used to stand as a surety contract. The creditors know that by operation of law a binding agreement extend a maturity of the debt, if made without the consent of the surety , or without disclosure and reservation of right against him will result in a discharge of the means used to act as surety .

    The reason being that the borrowers rights to pay and be subrogated to the creditors remedies on the debt it owes under a pledge have been postponed by the extension . Consequently the surety is discharged. The FDIC effort to repeal the safe harbor failed. Frank Dodd and TARP revisions clearly address this monumental fact .

    And counsel is heard saying – A judge will never listen to any of this ?%$%^&^^& ! Really? Don’t be so sure!

    You have my address . . . .

    M.Soliman
    expert.witness@ live.com

  33. Loss of security — occurred before the “mod.” —- ???

    Say again ?

  34. This is exactly why Wall Street is being ;picketed. Liars all.

  35. foreclosureinfosearch,

    Old chap — your defense against those YOU THINK are your enemy — is getting weary.

    Loss of security — occurred before the “mod.” —-

    But, your post supports the same. Not in competition with you — different terminology does not change the name of the game. Do not want your business.

  36. A modification is a novae and constitutes loss of the security and subordinated interest. Wrong again champ-o!

    Get a job on wall street if that what your passion really is. Don’t look silly reading this.

  37. By M.Soliman

    Counsels Statement in court: Trust and perfection are two seperate matters.

    Material Alteration- If the principal debtors contract is altered by act of the creditor, with or without the principals consent , the obligation is conditioned and the security given at settlement shall rest disturbed.

    If the obligation was given under a false notion or pretense, meaning one thing and enforceable as another – the debt emerges subject to a conditional contract. A conditional contract arises in the anticipatory claims made subject to reversal, a condition subsequent.
    a.Whereby the convoluted means of “washing” liabilities into assets are done so in trust;
    b.. Whereby the means and methods used to liquidate the mortgage through secondary channels relies on GAAP and evidenced by the FASB pronouncements and IASB guidance for which securities are purchased in good faith;
    c. Where the principal transaction survives only by subsequent event and application of FAS 140-3;
    d. Whereby there is an affirmed loss of all controlling interests in assets delivered and transferred;
    e. Whereas the transfer of one debtors obligation is marked by recording capital assets received by a transferee for purposes of equity and capitalization of another entity; and .whereby the basic rules of trust and perfection as proverbially speaking “two different animals; an equitable court will be forced to decide the controversy with equity, and

    I aver accordingly as an expert having insider knowledge, where the equity is used as a surety for further obligating the principal as a substituted principal debtor. Henceforth , a common law court will rule with equity and discharge the obligation as a surety.

    Changes in contract , performance of which is guaranteed, is a change of the provisions, terms and the conditions of the original contract. What is hidden from view is made salient in foreclosure . herein the controversy is an accounting void for which a reversal is used to overcome the earlier conversion of one liability into an asset.

    By its own election the parties application of De-recognition of liabilities into assets, the act causing the security given to novae into equity , fails in reversion. Reversion is where the foreclosure demands a reversal or sale and re-purchase means that Wall Street is ever so keenly aware of. I was one of them , I know what they are doing to American households.

    The parties lay claim to a security for the conventional encumbrance and lien. The liabilities are long gone and removed from the balance sheet offset by the receivable or bond, an asset held by the member bank as the obligee; then later pledged.

    The foreclosing party must have a legal or equitable interest in the mortgage”.

    The rules stand by operation of the law. … the party must have a legal or equitable interest in the mortgage (Katz v East-Ville Realty Co., 249 AD2d 243, 243). “foreclosure of a mortgage may not be brought by one who has no title to it.”(Kluge v Fugazy, 145 AD2d 537, 538). An assignee cannot maintain an action for any part of a claim which has not been assigned to him. (Works v. Winkle , 234 S.W.2d 312, 315 (Ky. App. 1950)).A mere expectancy is not enough to establish standing; a party must prove a “present or substantial interest.” Plaza B.V. v. Stephens, 913 S.W.2d 319, 322 (Ky.1996)(quoting Ashland v. Ashland F.O.P. No.3, Inc., 888 S.W.2d 667 (Ky. 1994).In LaSalle Bank Natl. Assn. v Ahearn, defendants did not have an interest in the mortgage at the time the foreclosure action was commenced (LaSalle Bank Natl. Assn. v Ahearn, 59 AD3d at 911).

    The Court in L aSalle found that: “The written assignment submitted by plaintiff was indisputably written subsequent to the commencement of this action and the record contains no other proof demonstrating that there was a physical delivery of the mortgage prior to bringing the foreclosure action.” (LaSalle Bank Natl. Assn. v Ahearn,59 AD3d 912).

    As such, a conditional element of contract that is retroactive by the assignment cannot be used to confer standing upon the assignee in a foreclosure commenced prior to the execution of the assignment.(LaSalle Bank Natl. Assn.,59 AD3d 912).

    Their security was never given as a security deed. We argue the encumbrance void ab intio in transfer where the intentions were for encumbering the Household under a non possessory , legal, bare and naked title

    M.Soliman
    expert.witness@live.com
    See you at the finish line.

    Available to testify in foreclosure matters and wrongful acts against title claims.

  38. Carie

    Thank you!!! May I add that I am now seeing courts dismiss consumer protection law counter-claims — because the party before court attempting to foreclose has been found NOT to be the creditor – foreclosure dismissed. So, if real creditor is NOT before the court — court concludes that there cannot be claims against unidentified real creditor for violation of consumer laws!!!! Ironic!!!

    But, my important message is — and I am NOT an attorney — and this is not meant to be construed as legal advise — get into BK immediately if there is an attempt to foreclose. The identify of the creditor is mandatory in BK — and courts cannot play around as to disclosure and current law that now defines a creditor.

    Any false representation of creditor in BK — is fraud upon the court.
    No wiggle room. .

  39. Thank you.

    ANONYMOUS, on September 29, 2011 at 2:00 pm said:

    Traditional definitions of title — including legal and equitable — have been replaced by new law. The Congressional intent of the new law was to define who is — and who is not a creditor — given the advent of securitization — and congressional intent was to give borrowers the ability to directly confront their current creditor.
    May sound like a broken record here — but, the Federal Reserve has redefined “Covered Person” — ie. Creditor — according to the May 2009 TILA Amendment.. The Federal Reserve Opinion — is now law. While we can look up definitions in dictionaries — will not hold up to the Fed Res law.
    Quote — again, and again — again — until everyone gets it. Note — “covered person” is new definition of “creditor.”
    From the Fed Res –
    “To become a “covered person” subject to Section 226.29, a person must become the owner of an existing mortgage loan by acquiring legal title to the debt obligation. Consequently, Section 226.30 does not apply to persons who acquire only a beneficial interest in the loan or a security interest in the loan, such as when the owner of the debt obligation uses the loan as security to obtain financing and the party providing the financing obtains only a security interest in the loan. Section 226.39 also does not apply to a party that assumes the credit risk without acquiring legal title to the loans. Accordingly, an investor who purchases an interest in a pool of loans (such as mortgage-backed securities, pass-through certificates, participation interests, or real estate mortgage investment conduits) but does not directly acquire legal title in the underlying mortgage loan, is not covered by Section 226.39.”
    Thus, — Fed Res — has done the work for you — why anyone wants to still make-up their own definition — is beyond me. Also, suggest reading the FR conclusion as to Servicer — also negates as Creditor.

  40. You can do a modification with principal and interest reductions – I have done them many times – it is a modification of the mortgage and note dated and recorded and these are the new terms and conditions.

  41. Anyone have a Chase contact number for Chase Home Finance LLC that would be above the so called Executive Department ?
    I have been working with a so called loss mitigation underwriter. Her title is…. Loss Mitigation Underwriter(Freddie Mac Loans)

    I have been working with her for weeks and all of a sudden she stopped calling or e-mailing me back.

    We have lots of folks out there in this potion and surely there is a higher level !

  42. While the above is true as to loan modifications being a farce, the real reason loan modifications are not working is because anything more that an interest rate adjustment means a whole new contract — not a mod. That is, principal reduction means borrower must sign a new contract with the current creditor (call it an “investor” — if you choose). And, of course, the creditor/investor refuses to identify itself.

    The way mods are going now — once borrower signs– it it just a reaffirmation of default debt stemming from a modification of the ORIGINAL contract — as fraudulent as that contract may be — and with nothing more than an interest rate adjustment/extended terms, etc. . That is all a MOD is — a modification of the original contract.

    Principal reductions require a new contract — and that is main reason meaningful mods are not occurring.

    .

  43. We brought out the reasons as to why Bush’s and Obama’s modificaiton programs would never work back in 2009 and no one paid one bit of attention and Neil has it right to some degree.

    The investors know exactly what is going on and in fact, I believe, have set the criteria which the servicers are to follow with the exception of the HAMP program whereby the homeowner has an excellent chance of proving they are not following the rules. If they are as I explained to one borrower, then that part of his claim ends there.

    If the lender participates in the HAMP program, they must follow the the provisions of the contract and cannot arbitrarily introduce their own policy even though it may be very close. Otherwise, that investor needs to get out of the HAMP and do his own thing within reason of course.

    . There are some servicing agreements whereby investors allow total decision making and processing to be handled by the servicer on their loans and if the servicer somewhere along the line has purchased the loan, they can then do what they want.

    Fannie and Freddie both will suffer greatly for deserting the borrowers when they failed to force the servicers to do the right thing and of course that can be followed up by a repurchase of the loan by the investor so they need to watch their step, don’t they.

    REgardless Fannie and Freddie appear to have known exactly what they were doing when they accepted the loans in the first place and now they want their money back, per the govs instructions to get it from the banks. It is far easier for the gov to sell a bailout to the banks rather than Fannie and Freddie because the public has had quite enough and the people would be bailing out themselves with their own tax money and that of millions of other taxpayers.

    Been trying to keep up with this and it is not easy. Thanks Neil for the post.

    Neil is right. The were and still are a farce.

  44. The press is bought and sold, perhaps there is a better way to say it.

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