- Real Estate
Top Reasons Why A Mortgage Modification Is Impossible
It was much more important for Wall Street to put profit above the rule of law (which requires proper documentation of each property transfer). The banks are now trying "fix" this problem of missing documentation showing a proper chain of title to a property, by making these documents appear out of "thin air" with the use of robo-signers and document mills that churn out THOUSANDS of documents each day. The bank cannot legally foreclose on a mortgage that they do not own. It is ESSENTIAL that the homeowners challenge the banks to PROVE their ability to foreclose!!
If a bank cannot prove ownership of your mortgage, the bank also CANNOT legally change the terms of a particular mortgage that they do not own in order to do a modification.
***When a homeowner signs the paperwork for a modification, the homeowner is actually creating a new contract for a mortgage that was not enforceable to begin with, DOING A HUGE FAVOR FOR THE BANKS. ***
A typical modification scam will start with the homeowner being proactive and contacting their mortgage servicer when it becomes difficult to make the monthly payments. The homeowner is often told that “there is nothing that can be done until you are 90+ days delinquent”. Let me repeat, the Servicer tells the homeowner that they cannot make mortgage payments for 90 days and go into "default" before they will be considered for a modification.
Now that the homeowner is 90 days delinquent and in "default", the “friendly reminder” letters from the servicer threatining to start the foreclosure process will start showing up in the mailbox. These letters will have terminology that states “This is an attempt to collect a debt and any information obtained will be used for that purpose”. THIS LANGUAGE DEMONSTRATES THAT THE MORTGAGE HAS BEEN “WRITTEN OFF” AS BAD DEBT, ESSENTIALLY DISCHARGED. THIS IS ALSO A CLUE THAT THE SERVICER IS NOT THE ORIGINAL CREDITOR AND IS ACTING AS A DEBT COLLECTOR THAT IS GOVERNED BY THE FAIR DEBT COLLECTION PRACTICES ACT.
The loan modification carrot will now start to be dangled in front of the homeowners as they are now feeling that options are limited. Out of desperation, the homeowner submits a multitude of information that the bank asks for in order to “qualify” for a modification.
In most if not all situations, the servicer will have serious "problems" with their fax machines and mysteriously do not receive the paperwork from the homeowner. Often times, the homeowner must submit MULTIPLE copies of the same information.
When in fact, the servicer DID receive the first copy of the information, WHICH IS A COMPLETE DISCLOSURE OF ALL OF THE HOMEOWNER’S FINANCIAL RECORDS AND ASSETS.
BY PROVIDING THIS INFORMATION, THE BANK NOW HAS A COMPLETE LIST OF YOUR ASSETS AND WILL DETERMINE HOW PROFITABLE IT WILL BE FOR THEM TO FORECLOSE AND TO THEN SUE FOR A DEFICIENCY JUDGMENT.
WHILE THEY ARE CONTINUING TO “WAIT” FOR THE PAPERWORK TO BE SUBMITTED BY THE HOMEOWNER FOR THE TENTH TIME, THE FORECLOSURE PROCESS ON THE HOME IS CONTINUING, WITHOUT THE HOMEOWNER HAVING A CLUE THAT THEIR HOUSE IS BEING STOLEN RIGHT OUT FROM UNDER THEM. THIS IS WHAT IS KNOWN AS A "DUAL TRACK FORECLOSURE".
When the bank reviews the paperwork submitted by the homeowner and determines that in fact it will be very profitable to complete the foreclosure, the homeowner is told that they qualify for a “trial” modification. The homeowner will be told to make “reduced” payments for several months. After several months of reduced payments, the homeowner is reviewed for a “permanent” modification, only to be told that they do not qualify, without any good reason.
The homeowner will also be told: “ONE MORE THING MR. HOMEOWNER, PLEASE PAY ALL OF THE ARREARS AND BACK PAYMENTS (THOUSANDS OF DOLLARS) THAT WERE NOT INCLUDED IN THE TRIAL MODIFICATION BY A CERTAIN DATE, OR WE WILL CONTINUE WITH THE FORECLOSURE”.
WARNING: Companies offering “foreclosure rescue” services have been showing up everywhere.Foreclosure Rescue Companies prey on consumers facing foreclosure. Foreclosure consultants will claim that they are able to save a homeowner’s home from foreclosure by negotiating or modifying the terms of the homeowner’s existing mortgage.
These companies demand an up-front payment (as high as $1500) to "work" with the bank, and most never deliver the services as promised. In most states it is illegal for companies to take money “up front” to work with the bank.