Foreclosure Settlement- Yeah Right

Posted by kevin on February 14, 2012 under Foreclosure Blog | Comments are off for this article

Last week, with incredible fanfare, the media and the Administration announced a $25 Billion settlement between and among the Federal government, all states except OK, and major banks (Ally, BOA, WF, JP Morgan-Chase, Citi). Clients have been calling or emailing me all week from north in Bergen and Passaic Counties to south (at least for me) in Monmouth and Ocean counties. Is it a good deal? Can they get a reduction in principal to bring the amount due down to what the property is worth? Will the bank/servicers finally deal straight?

Don’t hold your breath. First, the 25B translates to only 5B cash from the banks. 17B is earmarked for a reduction in amount due which will go to about 1,000,000 households that are underwater. Of course, the statistics show that there are over 11 million households underwater to the tune of about $700B. So, about 2.5% of the underwater households will be helped, and most of those households are current on their mortgages. 3B goes to homeowners who are underwater but current with the intended purpose that they will be able to re-finance when they get a reduction in principal. However, the reduction in principal is only about 20K per household. So, who really is going to be helped?

If you have been foreclosed on, then you can get a cash payment of up to $2000. In Northern New Jersey, that will pay for about one month rent or maybe your moving expenses.

Who is going to enforce this deal? Joe Smith, the banking commissioner of North Carolina, is in charge. But, we do not know what staff he has and what type of enforcement powers he has.

Finally, and similar to Obamacare, the deal has been announced and praised but no one has seen the final draft of the agreement. Why? Because my understanding is that it has yet to be finalized and drafted. Once you see the final written copy, you and I will be in a better position to see what’s what. I am afraid, however, that what we are going to find is another deal that is good for the banks and bad for the consumer.

Appellate Argument- appears good result

Posted by kevin on February 3, 2012 under Foreclosure Blog | Comments are off for this article

Appeal dealt with whether trial judge improperly refused to set aside default judgment.  Clients were older, African American couple- hard working, nice people who got taken for ride.  ARM with max interest of over 14%.  Had predatory lending, consumer fraud, HOEPA, common law fraud issues in addition to standing.  Trial judge did not see it our way, so filed an appeal.

On our website, we say that we are not a modification company- we fight foreclosures in court.  Why? Because we believe that our clients are going to get a better shot in front of a judge or judges (appellate level) than they are going to get with a servicer on a HAMP modification.  Yes, it is more work and more money, but we believe that ultimately, the borrower who fights gets a better result.

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