Posted by kevin on February 20, 2013 under Foreclosure Blog | 
In a previous blog, I alerted you of the unpleasant fact that the NJ Court Mediation Program is running out of funds. I have heard nothing official in the last 10 days. However, I was advised that a major HUD counselor is not taking on any new mediation clients.
One thing is for sure (or at least appears to be sure)- Judges do not want to run the mediation program. Now, that is understandable since the judges have to deal with their own out of control calendars. But, on the other hand, what has been lacking in the mediation program? There is no stick for servicers who continue to jerk borrowers around. Wouldn’t or couldn’t a few tough judges straighten that problem out in short order?
Maybe good old fashion settlement conferences can work in the foreclosure arena.
Posted by kevin on December 26, 2012 under Foreclosure Blog |
In the last blog, we focused on mortgage modifications and pointed out that lenders (or more probably servicers) can be less than straightforward in their dealings with borrowers or their representatives. Well, the lenders do not just jerk around the little guys; they do it across the board.
In conjunction with the AG/DOJ investigation of the mortgage industry’s servicing operations which led to the $25B settlement, the Office of Inspector General investigated servicer operations at the 5 “Too Big to Fail” Banks for the time period October 1, 2008 to September 30, 2010. The OIG report documented questionable practices used by servicers including employing foreclosure “mills” and “robosigning” sworn documents in thousands of cases.
What the reports also stated was that all five of the lenders (BOA, WF, JPM-Chase, Citi and Ally) hampered the investigation of the OIG. At Ally, the bank’s attorneys refused to allow OIG investigators to interview responsible personnel. Ally failed to produce documents in a timely manner, and when it did, Ally provided incomplete information. WF intially refused to produce 9 persons for questioning, but relented on the condition that WF management and attorneys attend the interview as facilitators.
Chase management provided explanation statements to bolster shaky testimony of employees and limited access to verifying documents. BOA attorneys refused to allow employees to answer certain questions posed by OIG, conferred with employees before they answered a question (presumably during the hearing) and did not turn over requested documents.
In addition to the stonewalling, the OIG report indicated (what everyone in NJ knows) that foreclosure law firms working for the servicers improperly prepared and signed documents.
So, if you are trying to get a modification in Bergen County and have been danced around the floor by your servicer who has led you to believe that it is your lender, just remember- the big banks have done and continue to play games with federal and state regulators. In NJ, until the distinguished judges put their foot down, the people and the judicial system both will continue to suffer at the hands of the lenders.
Posted by kevin on December 17, 2012 under Foreclosure Blog |
I meet with people every week who complain that they spent months getting jerked around by servicers and still could not get an affordable, permanent modification on their mortgage loan. They turn to a mortgage modification company with equally poor results. They read in newspapers or blogs that modification companies are scamming the public because they take fees up front and do not get the mod. The prospective client believes they were ripped off because the government tells them that a reputable mod company will get you a permanent mod and not charge you if they fail. In fact, some state statutes require that.
After working in foreclosure defense since 2009, I can tell you that no modification company can live up to those standards unless they represent only the top tier of their customer base. Why? Because the mod companies have little or no control over the process. They are, in effect packagers of information. They are stuck with your situation as far as arrearages, whether you have a job and what your income is, and the value of your property. Then, they are stuck with the critieria and decisions of the servicers over whom they have absolutely no control.
If you spend 8 months of your time trying to get a mortgage mod and don’t get it, how could you expect that the modification company will get the process completed successfully in a couple of weeks? Moreover, how can you reasonably expect the mod company to do thousands of dollars of work for you for free or for a nominal fee on the outside chance that you get a permanent mod. I certainly would not want to roll dice based on a situation over which I have little or no control.
That being said, I would assume that there are legitimate modification companies out there. I also assume there are a lot of less than reputable mod companies out there who prey on desperate people in bad situations. But how can you know who is legit? Mod companies are not rated in Consumer Reports or Angie’s List. So, my advice is to be skeptical. Do not give a mod company a large upfront payment (I heard of people who have paid upwards of $8,000). Make sure that the money you fork over is in line with the work that is being performed. Ask for their statistics (produced not in-house but by third parties) of getting permanent mods . Check on line and with the BBB about complaints. Understand that even a good, honest mod company is not a magician.
Be realistic about what you can get. If you are out of work or get paid off the books, the chances of getting a mortgage mod are slim or none. Do not expect that a mod company can do any better.
Posted by kevin on June 5, 2012 under Foreclosure Blog |
To review, a servicer collects the monthly mortgage payments and distributes those payments to the lender, the taxing authority, and the insurance company. It gets a fee for providing this service. Most servicers are affiliated with large banks- too big to fail banks.
The servicer, in many instances, was the original lender or the purchaser from the original lender, who then sold the loans to FANNIE, FREDDIE or a securitized trust.
Since the servicer is involved in the collection and distribution of payments, it is the entity that coordinates foreclosure or bankruptcy activities on the part of the lenders. It was the entity most likely to be involved in robo-signing, issuing questionable certifications or affidavits in foreclosure litigation, and even forging instruments. The AG’s were looking primarily at the servicers, and the AG’s had claims of approximately a trillion dollars or more against these servicers. These AG claims go away based on the settlement. Now, you as a borrower can raise these defenses in a foreclosure action. But you do not have the same clout that a State AG has to pursue litigation. Moreover, you have to deal with state procedural rules which put a time limit on the ability to set aside a judgment based on fraudulent papers. Therefore, your chances of hitting a home run against the servicers are limited.
Imagine if you could get off the hook on your debts by putting up 25 billion to wipe out of trillion dollars of liability. You could pay off a million dollar mortgage for $25,000. How come the government did not give you that deal? It has something to do with a concept known as moral hazard. Many in the banking industry and government think that it sends a bad message to allow people to walk away from their mortgage obligation. Notwithstanding that many got hoodwinked into deals that they could not afford. However, those same people have no problem with bailing out the banks. In other words, a different set of rules apply to the too big to fail banks. Go figure.
Posted by kevin on August 30, 2011 under Foreclosure Blog |
Lenders are licensed in New Jersey. That means that doing business- mortgage business- is not a right but a privilege. Yes, you can make money as a lender or mortgage broker. But you have an obligation to the public, an obligation to the State.
People, even it appears sometimes judges, forget this simple fact when they are confronted with with continuing mortgage crisis. They pay lip service to the idea that there is enough blame to go around; but when it is time to pony up, only the borrower is left to face the music.
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