The Effect of Provisions for Waiver and Release in Forbearance and Modification Documents

It is not the act of forbearance that admits the existing default. It is the agreement or forbearance that creates an apparent waiver and release of all claims or crimes that might relate to challenges to the existence of the underlying obligation, existence of a financial loss (default), and challenges to any claim of Rights to administer, collect or enforce the alleged obligation that is due to the Creditor.

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Most people look at the agreement and “realize” that they have signed away their rights. But it is not that simple. Agreements, or parts of agreements, that violate public policy or other state law, or which are unconscionable, or which have been procured under trick or deceit, are void. So are agreements that were not authorized in the first place. But in order to reach that conclusion, you need a court order that says that the homeowner’s waiver is not valid. This would also raise the issue of whether or not the forbearance agreement created an entirely new loan agreement.

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There can be little doubt that nobody would sign a forbearance agreement but for the fact that they were under duress (threat of foreclosure and eviction) and coercion (repeated illegal correspondence and phone calls). There also can be little doubt that the agreement itself a subject to question simply because it does not identify any creditor, nor does any creditor acknowledge or approve of the forbearance agreement.
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If anything it appears to change the original contract to a designated creditor instead of a real one. This is the bridge concocted by Wall Street lawyers to get rid of that pesky problem of the absence of loan receivable account, anyone who could own and anyone legally authorized to administer, collect or enforce the underlying debt, note mortgage, or right to collect.
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The Foreclosure Mills are well acquainted with the fact that the waiver Provisions contained in a modification or a forbearance agreement are probably not enforceable. Transaction lawyers insert such provisions because in most cases either the opposing party or their attorney assumes the provision is valid. It’s another hurdle because like all foreclosure claims it raises the presumption of legality and enforcement that can be contested but rarely is contested.
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This is another one of those cases where assumptions create obstacles to a successful challenge against a party who purports to execute a substitution of trustee, notice of default, notice of sale, and “verified” complaint.
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The lack of knowledge of the procedural requirements in court, combined with the failure to research the enforceability of waiver and release documents are a deadly combination for the prospect of a successful outcome of a contesting homeowner.
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For those of you who wish to perform legal research and analysis in connection with fraud upon a homeowner and fraud upon the court I recommend the following article as a starting point for the research and analysis. (see attached)
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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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