Modification Muddle

There is a great deal of conflict and confusion in the world of foreclosure defense about the prospect of modification. It is obvious that approvals are random only to create the impression that an entire system devoted to foreclosing on as many homes as possible is purportedly attempting to work with homeowners.

We all know that we are dealing with entities who have no right, title or interest to the loans or the servicing or the administration of them. Yet we are presented with a crazy hodgepodge of demands for paperwork so that the unauthorized servicer can “consider” and “get approval” from the “investor.”

If the terms are favorable to the homeowners, many homeowners are advised by me and others to accept the modification even though we know that we are not settling with anyone who has the right or authority to bring the claim, much less settle it. But the process of settlement/modification brings with it some potential opportunities to drill home your primary defense narrative.

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Tens of thousands of homeowners have reported to us that they are in conflict with their own attorneys about how to proceed — litigation or modification. This article is meant to convey the complexity of strategic legal decisions. Your attorney has not been bought off by the other side. Suggesting settlement is not a betrayal. It is called doing the job of a lawyer. The justice system runs on money. If you want all out war, then you must pay for it. If you can’t or won’t pay for it, then you must accept the probability of achieving less than your main goal.

Unless you are wiling to spend large amounts of money on fees such that the attorney is being paid to do all the research, all the analysis and all the strategic planning required to litigate, then you must accept the consequences of limited strategies in place of strategies that are designed to win the case. But modification represents a backdoor to beating your opposition using the same defense narrative as you are presently using in litigation.

We should not be annoyed with local counsel. We defer to local counsel always. This is not a contest. If local counsel deems it best that the homeowner settle then it should at least be pursued, but in the end it is the homeowner who decides what to accept.

The findings in the TERA report can be used as a reason to demand that the named Trustee of the named Trust acknowledge a settlement and the authority of whoever is negotiating the settlement.
When the intermediary “servicers” refuse to present any signature from any officer of the purported “Trustee” of a purported “Trust” that owns the subject debt, the homeowner can go to court. This time the homeowner is armed with inequitable conduct by purported agents of the purported Plaintiff or foreclosing party.
In court, the homeowner would say the purported “servicer” has proposed a settlement/modification that the homeowner has already accepted; but now the “servicer” refuses to have the Plaintiff (foreclosing party) execute any document memorializing the settlement/modification. Instead they are requiring acceptance of a signature from a person of unknown authority on behalf of a self-proclaimed servicer of unknown authority.
Reports from forensic experts show that none of the parties have any right, title or interest in the debt or servicing; however homeowner is willing to accept the risks of dealing with an unauthorized entity, as long as the named Trustee executes the settlement on behalf of the Plaintiff Trust.
A close examination of the proposed modification document will usually show that the creditor is being subtly changed. Payments are now owed to the servicer and there is no mention that the servicer is accepting those payments on behalf of the named creditor who is named as the foreclosing party. At best the creditor is being changed from the foreclosing trust to unknown. At worst the debt is being joined with the note and mortgage and changed to being presumptively owned by parties who, to the detriment of the owners of the debt, have never paid for ownership.
The defending homeowner would be saying that the intermediary with whom she has been corresponding is acting in bad faith and/or without authority. He/She would be seeking relief in the form of a court order requiring an officer of the named Trustee Bank, as trustee for the named Trustee appearing as the Plaintiff and foreclosing party to either sign the deal or reject it if the current servicer had no authority to offer it.
This is akin to cases in which there is a settlement and the attorney executes documentation or a pleading; the court most often rejects the “acceptance” by the attorney even though he/she is an officer of the court. The court, especially in foreclosures, will almost always require the signature of the homeowner. What is good for the goose is good for the gander.
The purpose of going through all that is to force the other side to offer a better deal or back away. I can virtually guarantee that the “Trustee” for the “REMIC Trust” will NOT sign a document in which they admit to being a player. The way it is set up now, the “Trustee’s” name is falsely used and the bank named as Trustee can claim plausible deniability in any given case in the event that the situation explodes and there is liability for false claims. In all likelihood the Trustee doesn’t even have a retainer agreement with the law firm that is falsely reporting that they are representing a nonexistent client Trust.
Using this strategy drives the opposition to the wall. They know that the “Trustee” has no authority or interest in the litigation. They know the Trust is empty and most likely nonexistent. They know that without the subject loan being entrusted to a trust, no amount of writing can authorize the administration of the loan on behalf of the trust. They know there is potential liability for sanctions and punitive damages that could reach into the millions, but more importantly reach the press where homeowners will get the idea that maybe they can and ought to win.
In my experience, the end result is usually a vast reduction in the amount demanded that is so steep that the homeowner feels constrained to accept it in exchange for accepting the risk that the parties with whom he/she is doing business have no right, title or interest in the loan.
If the opposition were to produce a newly fabricated document the homeowner’s position strengthens. First the homeowner can seek to confirm the execution of the document by named “Trustee, on behalf of the named ‘Trust'”. Second the existence of a newly executed document may be used to argue that there was no privity or authorization before.

12 Responses

  1. Ask who the contract for modification is with. Ask WHO are you modifying with. And, hope the answer is not the servicer.

  2. Ask for the NPV report on all Modification Applications /Offers – see SIGTARP JUNE 2012 NPV Pages 4-7
    (If you take them at their word – it is your own fault) make them prove the numbers and back end accounting) Request the Customer Account Summary (see if there is money in suspense account) ALL SER Process Notes and Internal Notes on the account – look for the mortgage default insurance check – its there –


    Where there is a defeated acceleration, how can there be a DEceleration when the logically necessary precedent of ACceleration no longer exists?

    In contrast, if an ACceleration has been executed, a DEceleration would be useful and legitimate if the Plaintiff lender decided that the ACceleration should be withdrawn for some reason. But ironically, in cases of mediation success, forgiveness of missed payments coupled with an immediate resumption of monthly payments, or some other resolution, there is no associated “DEceleration Notice” filed with the court or delivered to the borrower. It is only when a lender’s foreclosure attempt is defeated that the lender may wish to DEcelerate to “justify” a new foreclosure effort. Although it probably has never happened, it could be a lender’s prerogative to reverse an ACceleration while a foreclosure complaint is active, but when a foreclosure complaint is defeated for any reason, especially with a Dismissal with Prejudice, the Complaint and its associated ACceleration has been mooted for every purpose. If the Complaint has been defeated for any reason, how then can the previous ACceleration remain in effect subject to a mythical DEceleration after the Complaint has been adjudged? ACcelerations do not and cannot outlive the very Complaints that formally invoke them. If, then, the Complaint and it’s associated ACceleration demand no longer exist following adjudication, there is NOTHING AVAILABLE to DEcelerate! ACceleration encompasses ALL past and future unpaid payments. Logically, if a lender throws the dice and sues for everything, then it should be required to live with the natural consequence that a defeated ACceleration cannot be undone. The lender by nature and logic loses everything.

    The entire attempt to DEcelerate following a defeated complaint is a fiction of Whole Cloth. Such an attempt to give new life to a closed case is impossible legally, unavailable contractually, illogical, without legislative authority, a creative manipulation to obtain a landfall payment that is undeserved, an attempt to win a court’s sympathy concerning the “free house” outcry and presents a naturally logical basis for a Quiet Title action. In fact, a “free house” is antithetical to a “lost house,” but there is no corporate outcry heard when a homeowner loses. Logically, why then should a ( often crooked ) lender be rewarded with a second try when it’s first try was defeated???

    FURTHERMORE, ACceleration is a logical process provision in lending that brings ALL remaining UNpaid monthly payments into a single sum for final adjudication of the debt obligation (once and for all) with finality. That process is universally understood and validated. But if a loan has been ACcelerated and defeated, the ACceleration itself has been dissolved, mooted and made to suffer a natural death along with the Complaint, so again, there is nothing remaining to DEcelerate later.

    Bottom line: DEceleration is a crafty Avoidance Myth imposed by unprincipled lenders and their creative, unethical attorneys upon a court to gain another unethical advantage over a hapless borrower.

    In any other branch of law, a defeated complaint settles the issue forever. However, in foreclosure law, there are several illogical outbreaks of misrepresentation and faulty argument being used to advantage a lender and disenfranchise an aggrieved borrower. The loss of lender funds should be part of the legal and natural consequences for lender misbehavior.

    Author: Ed Caplinger, successful pro se (Tampa, Fl) Email: > > >

  4. Roger – -John is correct. This is more than the moral hazard of a “free house.” This affects people that are paying and not asking for anything more than to get out of high rates with clear title.

    It is more.

  5. It’s moral hazard, ANON. No free houses! Damn the property laws, recording laws, UCC, it doesn’t matter. Why is the IRS, the Bankruptcy Trustees Office, SIGTARP and the FBI all mum on the matter for 8 years? 10 year?

    Germany is putting VW people in jail, but in this country the banks run the government. Here they get golden parachutes and live happily ever after.

  6. V-e-e-r-r-y interesting – late last Fri. we were( after mos. of endless sparring with WF ) offered a too good to be true HAMP-like “mudification” – fortunately we have located counsel and will review before even nibbling at this 1/2 price offer from WF who has not even a valid title. Would, they said, reduce our pymt. from approx. $ 835.00 to
    around $ 435.00 PITI.
    Just another stunt in the never ending ” steal your house ” gambit.
    BTW there was no mention of any legal title authorizing them to even
    Kudos – Mr. Garfield

  7. I was much worse situation financially w my previous home mortgages I passed successfully. Yet With this wrongful foreclosure my financial was the most convenience time to live decently until @WellsFargo crashed us w their Fake home 🏠 Modification like they regret for not hurting me w my previous home mortgages. It’s challenging in this hot wether to not have food poisoning WFB threw us on St WFB r animated inhuman criminal

  8. Roger – where do the judges get the information from? Who provides the documents? Who labeled the homeowners as the the bad ones?

    Who is still allowing fake documents to be produced in courts? Who did not, and is not, fixing the fraud?

  9. It’s all bullshit, guys. These modifications were made to breached where Wells Fargo is concerned. Nadia, I feel your pain. Wiley, don’t expect anything from your judge other than a ruling for the bank.

  10. Excellent article Neil. Homeowners are pushed into a situation in which they either accept a “modification” (if lucky), but without details or clear title, or just wait for foreclosure. Most, if they can get it — grab it. This is understandable. They are scared.

    I am afraid that the modifications have just allowed the fraud to remain buried. But, that is what the government did. Instead of disclosing the truth, they created HAMP (which is over now).

    My question always was — why HAMP?? Why modification? Why not a valid refinance?

    I was told by an attorney years many years ago that loans in which a borrower missed a payment or two were refinanced without problem. Refinanced with who? The non-banks??? It was not a refinance. But why would not HAMP allow this? Allow a valid refinance? They could not.

    Why did the government create HAMP?? A “Modification” program?. Because these loans cannot ever be refinanced until the fake DEBT is paid in full. HARP program would only refinance if not underwater by a small amount. And, the GSEs had to own. Direct or indirectly — but no one ever told you whether direct or indirect. And, very, very few were ever refinanced.

    How many are locked into a modification, still paying inflated debt?

    Listen to Neil on this. Get his help. I am not affiliated in any way, and not an attorney.

  11. I’m right there, waiting for final entry of summary judgment, and I very much like your settlement strategy as stated here. Pondering trying just as you suggest. No liability for you, but if successful, anticipate a very appropriate donation for making me aware of this possibility.

  12. My residence gone due to @WellsFargo home modification betrayed me to servicer BS I when I called them they said my info is not loaded yet or never return my call we are elderly the house 🏠 is gone
    If this muddy modification fraud wrongful foreclosure the injustice business congress closing their eyes on their own citizen can u imagen how’s the fake game media works internationally! Then they call victims terrorist WFB r Isis without needing gun
    By the way as my bank card changed no there is no access be able to donate thru eBay

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