A Neat Modification Success

Really, the point of this blog isn't to brag about our all-natural modification wonderfulness. But sometimes, we just have to do it.

If you wonder why you should pay a qualified firm to handle your modification, here's why.

Client--we'll call her "Beatrice," (just because that name sounds like a sweet, kind woman), has been trying to do her own modification. Problem is, her house is here in South Florida, but she spends a large part of the year in California, where her husband is employed. So, Beatrice's bank accounts, her husband's pay stubs, and tax returns, are all listed in California.

Bank says no  modification for her--under HAMP, the borrower needs to be living in the property being modified.

Beatrice comes to us explaining her situation. The house here IS her primary residence, it's just that she spends so much time in California with her husband, she uses California bank accounts. But the bank wanted to hear nothing of it.

We get the case, and assist her in writing a letter to the bank, and we negotiate it, explaining the situation, specifically telling the bank that they can either modify the loan, or explain to the Court why it failed to take into account the client's unique situation.  We also worked with Beatrice to get as much documentation as possible to support her claim.

Lo and behold...modification approved...on a case where the client had been denied before retaining us, and on a case that required an extra degree or personal attention to get the job done.


(A special thanks to our own Jared Fink, who worked hard negotiating this file. As a former Countrywide insider himself, Jared has some pretty in depth knowledge of what these banks are looking for, and has been very successful in getting modifications in difficult situations).

Where are all the Principle Reductions?

A big question I get is whether principle reductions--that is, lowering the balance owed on your mortgage--are available, and if not, why not.

The answer to the first question is generally, no. Most (responsible) foreclosure defense and loan modification attorneys will tell you that principle reductions are not being offered by banks. The current governmental modification programs, like HAMP, do not have a principle reduction component.

Principle reductions would stimulate the economy. People who purposely default on their mortgage would remain current, knowing they were now paying for a house that is even in value. Lowered principle would mean lowered payments, making homes more affordable for those in foreclosure. All this means fewer homes in foreclosure, which raises everyone's property values.

So why hasn't it happened?

1.Tax Dollars - any plan where banks reduce principle, would need to be incentivized by giving something to the banks--and that something would be money that likely comes from tax dollars. Like it or not, the mood of the country is not in favor of more spending, even if it would help the economy and those most in need. If the Congress was willing to allow the US to go into default on its debts a few months ago just to avoid more spending, it certainly wouldn't be willing to give taxpayer money to lower mortgage balances.

2. Snowball effect - the very real concern that principle reductions would lead to people who are paying their mortgage, to purposely default, in order to get the benefits of the program. Now you could possibly have made a bad foreclosure crisis, even worse. And it would be impossible to financially account for the hundreds of thousands of homeowners that would purposely default.

3. Investor guidelines - many loans that are included in mortgage backed securities or securitized trusts, have investor guidelines that would not allow them to lower principle, no matter how enticing any government incentive may be.

There are still two avenues of hope:

1. Many state attorneys general are considering principle reduction as a part of settlements with major loan servicers for the robo-signing and foreclosure fraud scandals:

http://www.housingwire.com/2011/10/24/hud-robo-signing-settlement-to-accelerate-principal-reductions

2. There remains a push in congress to allow judges in Chapter 13 bankruptcy proceedings, to lower principle.

Until then, you'll need to make a decision what you want to do. Remember that even if you don't think your home is worth keeping, walking away could subject you to a large deficiency (monetary) judgment.

Questions? Feel free to contact us at 954 987-0515 or www.weaverlegalgroup.com

What did the bank's law firm dress up as for Halloween?

The New York Times did an interesting article about a New York Law firm's Halloween party. The costumes will shock and appal you.

The firm is a "foreclosure mill"--that is, a law firm that churns out foreclosures in bulk, over and over, plugging out documents, with little regard to their accuracy, no real contact with their own bank clients, and little to no concern for minor things such as, say, due process. Locally, such firms are Marshall Watson, Kass Shuler, Shapiro Fishman, Kahane & Associates, Florida Default Law Group, and others.

Now, I don't suggest that any of these firms did, or even think, the way this New York law firm did. But it makes you wonder if somewhere, deep down, the mentality isn't somewhat similar.

Reading this kind of thing makes me very angry. And as the line goes...(directed to bank law firms)..."Don't get us angry...you wouldn't like us very much when we're angry..."

http://www.nytimes.com/2011/10/29/opinion/what-the-costumes-reveal.html?_r=2&ref=opinion