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May 24, 2009
More Real Life on Negotiating a Loan Modification
More from the Bankruptcy Roundtable list serve:
I share your pain. Client endured a series of phone calls by herself after the phone calls that I referred to in my original posts and then she and I spent yet another marathon in which we were informed that filing a bankruptcy would terminate her application for a modification under the Making Home Affordable program. We went ahead and filed because unless she gets rid of her unsecured debt, a Making Home Affordable modification isn't going to do her any good. What really irritates me is that unless there is an "active" bankruptcy, Chase won't connect you to any department that actually handles bankruptcy cases. The people who we have reached appear to have no idea what actually happens in bankruptcy. And actually, we were put on hold twice in this last round of phone calls because the person on the other end acknowledged they didn't know how Making Home Affordable would be affected by a bankruptcy. And when they came back on line it was pretty clear they hadn't spoken with anyone in a bankruptcy-related department.
Carol G. Stebbins
Attorney at Law
That's funny. I am trying to just start the loan mod/ loss mitigation process with a client who has chase. You have to send them an authorization form to a centralized fax number. Four weeks later. Ten calls later. Chase can only tell me they haven't got my fax. Can't email it. Can't mail it. For a while I was faxing it twice day. Their loss mitigation personnel are a joke. Worst customer service ever. And yet, while on hold numerous times, their hold voice mesage kept saying how committed they were to helping their customers
No wonder the lenders and their lobbyists did not want cramdown - - they might have become accountable and something might have actually been done to modify debt. Back in the 80's, when I had clients with FmHA, HUD or other government agency debt, I always told them, just go into chapter 11-12-13 or whatever because outside of BKC you will never get an answer due to this problem. At least in BKC court, they are participation is mandatory & they coerced to the table, there are deadlines for action and some agency lawyer or outside counsel will have to speak with authority on behalf of the entity.
JAMES H. (JIM) COSSITT, ATTORNEY & COUNSELLOR AT LAW
Board Certified, Business & Consumer Bankruptcy Law, American Board of Certification
It is quite amazing about this bureaucracy. My favorite story is at least five years old. After making a series of phone calls, and finally getting through to someone who seemed to know who I had to speak to, she (who understood my frustration), was going to transfer me to the right party. I asked if she could "conference call" this as I had been disconnected a couple of time and didn't want to start the process again. She complied, and when we got the third person, I could only hear this third poorly - - - so I suggest that this third person call me back. She responded that her facility had no telephones that could dial out. I quickly responded that I felt really sorry for her because, if there was a fire, she couldn't call the fire department and would "fry". The person who had set up this call just laughed and laughed.
Louis S. Robin, Esq.
Would anyone be upset if I were to publish this thread on my website or give it to clients that ask about these programs.
We all know what the real answer is for the clients, the whole program is a misdirection. There is no serious intent to help the average homeowner, but politicians and the industry felt that they needed cover for the billions they are handing themselves to correct their own excesses and make their constituents / customers feel included. It is a sham; otherwise, it would be working. There are only two institutions that I have found to be serious about loan modifications (1) HSBC (British), and (2) American General Finance.
The rest of the mortgage companies / servicers have no interest in rehabilitation. They seem to be more interested in the properties becoming bank owned.
I can think of only two reasons for this. The first is that the banks are betting that the toxic asset purchase program will net them at tax payer expense more money than they will get at a foreclosure auction if they let others take the properties at present market values. The second is that there is a very long game going on here and the same banks that are being floated by the government anticipate hyper inflation and these same properties are a hedge against this inflation which will produce a dizzying amount of profit later for those institutions.
Done ranting. Sorry. I think I am just jealous that I'm not one of these guys.
IndyMac Bank has been telling my client for six months: "We can't give you a loan modification unless your BK attorney reopens your case and files a reaffirmation of your previous loan." It's maddening. Each of us has dozens of loan mod horror stories, all ending the same way - abject failure of the entire loan mod process.
During 2008 my office kept good statistics on the number of clients who had managed to get all the way through their lender's loan mod process. We tracked 106 clients, of whom only 2 were offered any kind of modification. Both consisted of a 6-month rate reduction and tacking missed loan payments on the back end of the loan. Some modification.
As Congress was preparing to vote on cramdown legislation, I put this info in a detailed letter to my Congresswoman, Mary Bono Mack. My letter caught her eye and she personally called me the day after I faxed my letter to her office. We spoke on the phone for almost 30 minutes and she told me she was
worried about her "credit union constituents" who would suffer enormous losses under cramdown legislation. She voted against the bill.
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This site is a great help for me. The process of refinancing is quite tricky. There is a lot that we need to do. I have also seen http://www.editmyloan.com/ to be quite promising on providing sensible loan modification information.
Posted by: Pothik | Jun 4, 2009 9:16:28 AM
This is quite helpful and I will see that I can implement that. I really hope that this will save my home.
Posted by: Damien | Jun 6, 2009 11:13:30 AM
Nice post! Thanks for sharing, CDLoanmod.com also provides loan modification information.
Posted by: Home Loan Modification | Sep 8, 2009 5:40:09 AM
With the economy in turmoil, it seems that more and more americans and canadians are struggling to pay off their debts, including student loans for themselves or even their children. Its good to know there's some decent hope and information to guide people along. Thanks,
Posted by: Dave | Nov 3, 2009 9:12:33 PM
nice post..thanks for the info..
Posted by: Melba Solis | Nov 30, 2009 10:57:47 PM
Do You Qualify?
1. Do you live in the home?
2. Is your current loan amount within the Fannie Mae conforming limits ($625,500 in high cost areas
and for other areas it is $417,000)
3. Are your current house payments more than 31% of your gross income?(Loan modification kits can
help with all financial calculation your lender may want to see)
4. Are you must be able to prove you have current income?
5. Do you currently have a job?
Posted by: Reene Bolton | Dec 1, 2009 10:43:24 PM