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Lawsuit Reveals How a Middleman Is Blocking Mortgage Modifications for Homeowners

The suit is a window into a broken system where even though the actual investors, when asked, say they want to allow mortgage modifications, the bank that acts as their representative has refused to allow them.

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Pamela Jeter of Atlanta, Ga., is currently facing foreclosure. (Photo courtesy of Pamela Jeter)

Pamela Jeter of Atlanta, Ga., has been trying to get a mortgage modification for more than two years. She seems like an ideal candidate. She has shown she can stay current with a reduction in her monthly mortgage payments. Everybody would seem to win. Even the investors who ultimately own her loan think she should be able to get one. So, why is Jeter facing foreclosure?

A bank that she didn't even know is involved with her loan has thrown up a roadblock to modifications. At least tens of thousands of other homeowners have shared a similar plight. Jeter's case is a window into a broken system where even though the actual investors, when asked, say they want to allow modifications, the bank that acts as their representative has refused to allow them.

Two big banks act as middlemen between the homeowners like Jeter who make payments and the mortgage-backed securities investors who ultimately receive them. The banks' jobs were supposed to be relatively hands-off, devoted more than anything to processing homeowner payments. When the housing bubble burst, they faced new demands.

One of those middleman roles is well-known to homeowners: the mortgage servicer, responsible for collecting homeowner payments and evaluating requests for a modification.

But it's another middleman that's proven the real barrier for Jeter: the trustee, who is supposed to be the investors' representative, making sure the servicer is maximizing investors' returns and distributing checks to them. HSBC is the trustee for the pool of loans of which Jeter's is a part -- and it's refused to approve any modifications for loans like hers, saying the contracts around the mortgages simply don't allow it.

The good news for Jeter is that, in what seems an unprecedented step, her servicer OneWest has taken HSBC to court in order to allow modifications. It filed suit in June of last year.

But in a sign of just how convoluted the mortgage world has become, OneWest is also pushing to foreclose on her. A recent sale date was avoided only after her lawyer threatened to sue.

Update: One day after this story ran, OneWest postponed foreclosure, saying that it wouldn't attempt to seize Jeter's home again for at least two months.

Jeter's loan was typical of the boom years. In order to help pay for improvements on her home in 2007, she'd refinanced into an interest-only adjustable-rate loan. That loan was bundled with thousands of others by a Wall Street bank and sold off to investors (pension funds, hedge funds, banks etc.).

That's where the trouble started. In Jeter's loan pool and nine others, the contracts laying out the servicers' responsibilities and powers contradict each other. OneWest's lawsuit seeks to sort out that contradiction.

One document, a private contract between the servicer and the Wall Street bank that bundled the loans, explicitly forbids servicers from modifying loans in the pools in a way that would reduce homeowner payments. But other contracts -- that investors could see -- explicitly allow such modifications.

It's become a familiar problem during the foreclosure crisis, dealing with the aftermath of the banks' corner-cutting and sloppy paperwork of the housing boom.

No one appears to have tried to sort out this mess until 2009, when OneWest requested that HSBC, the trustee, allow modifications. The administration had just launched the Home Affordable Modification Program (HAMP), which pays servicers and investors subsidies to encourage affordable modifications. Under the program, modifications occur only when they will likely bring a better return to investors than foreclosure.

But HSBC refused to authorize any modifications, saying the contracts prohibit them. It's obligated to act in investors' interest, and it feared getting sued by those who didn't want to cut homeowners' payments. The dispute dragged on for months. Ultimately, HSBC offered to allow modifications only if OneWest accepted the risk of getting sued by investors, but OneWest wouldn't.

OneWest was in an increasingly difficult situation, it says in its suit. It faced potential suits from investors if it modified loans, and if it didn't, homeowners in the pool might sue.

In late June 2010, with HSBC still not budging, OneWest filed suit, asking a federal judge to decide whether modifications should or should not be allowed.

The case suggests that when investors themselves are asked, they will approve modifications. HSBC polled the investors in the 10 pools after the suit was filed. A large majority favored allowing modifications. Based on those results, HSBC said in a court filing in January that it did not oppose OneWest's request for a judge to intervene and that if the judge declared modifications were allowed, that would be fine with them.

In the meantime, 3,000 homeowners like Jeter whose mortgages are caught up in the dispute have been unable to get any reduction in payments. When OneWest filed its suit, it said at least 800 of the loans seemed eligible for an affordable government-sponsored modification but couldn't actually be modified because of HSBC's stance. Those homeowners "are facing the possibility of losing their homes through potentially avoidable foreclosures every day," it said.

It's not clear how many of those homeowners have since been foreclosed on. OneWest said in a statement that it had no choice in pursuing foreclosure: It's "contractually obligated to continue servicing loans in accordance with the terms of the underlying securitization documents."

The suit is remarkable not only because it seems unique -- close observers said they hadn't seen another example of a servicer going to court against a trustee -- but also because it lays bare a relationship that is usually a mystery to homeowners and investors in securitized mortgages.

It's often hard for homeowners to tell if a servicer is correctly citing an investor restriction when denying a modification. Servicers have cited investor restrictions when denying modifications for at least 30,000 homeowners, according to a ProPublica analysis of Treasury Department data. A Treasury spokeswoman said auditors examining such denials had found they were almost always legitimate. That's not an experience shared by homeowner advocates.

While there are clear cases where the contracts prohibit modifications, homeowner advocates say servicers often falsely claim their hands are tied, blaming "the investor" when there's really no restriction on modifying loans. In a number of cases, said Jeff Gentes, an attorney at the Connecticut Fair Housing Center, servicer employees have told his clients that there was an investor restriction, when a little bit of digging showed that's not true. We reported on this problem last year.

How a Trustee Can Block a Loan Modification

Graphic by Paul Kiel and Krista Kjellman Schmidt, ProPublica

Graphic by Paul Kiel and Krista Kjellman Schmidt, ProPublica

That's also an experience shared by OneWest homeowners. Briant Humphrey of southern California says OneWest told him repeatedly for months that an investor in his mortgage wouldn't allow a modification. But that doesn't appear to be true. OneWest declared in its suit against HSBC that, of the 500,000 or so mortgages it services, the only ones not eligible for possible modification were the loans at issue in the suit. Humphrey's loan is not one of them.

His case is notable for another reason: Humphrey happens to be friendly with one of the Treasury officials in charge of HAMP, Laurie Maggiano. After narrowly avoiding a foreclosure by declaring bankruptcy, Humphrey was able to speak with Maggiano, and he credits her with finally getting higher level attention at OneWest. His case is currently in review again.

Overall, investor restrictions have been a relatively minor problem compared to the many other barriers homeowners have faced in a quest for a modification. They represent about 2 percent of the 1.9 million total homeowners who've been denied. In most cases, the contracts written when the securities were sold give the servicer clear authority to provide modifications.

In the cases when there actually is a restriction in the documents, the servicer is supposed to at least try to get permission. The HAMP rules require the servicer to send a letter to the trustee requesting that modifications be allowed.

But even that small step has proven too much for many servicers. Last summer, a director at Deutsche Bank, one of the largest trustees, told ProPublica that such requests "never happen." Deutsche Bank did not respond when asked if that was still the case.

In cases where there's a clear contractual bar to modifications, the servicer and trustee could take the initiative to change the contracts by having the investors vote on it or, if voting isn't required, amend the contract themselves.

But in general, said Gentes, the housing attorney, servicers are slow to investigate and eliminate bars to modification. Servicers are paid a low, flat rate per loan and are motivated to keep costs down. "The costs of removing an investor restriction are often borne by the servicers, and so extensive amendment rules often mean that servicers won't pursue it."

Trustees, who get paid even lower fees, are no different, said Bill Frey of Greenwich Financial Services, which specializes in mortgage-backed securities. "They're very, very prone to inaction."

Both, as middlemen, don't bear the loss when a home is foreclosed on.

As for Jeter, eight months after OneWest filed suit to allow modifications, she is facing foreclosure for the fifth time.

Self-employed, she hit trouble in 2008 because of the recession. After failing in attempts to refinance into a conventional loan, she started talking to her servicer, then called IndyMac, about a modification. (OneWest was formed from the remains of the failed bank IndyMac. It has recently been under scrutiny from regulators for its foreclosure practices, along with other of the country's largest servicers. )

An employee told her she had to miss several payments in order to qualify for a modification -- a common experience for homeowners.

"I hadn't done anything like that before," she said. "It was a crazy thought." But because she'd been assured that was the only path to a modification, she did it.

Several months later, OneWest put her on a six-month temporary payment plan that cut her payments almost in half from $3,500 to $1,850.

She made those payments, but still there was no modification. "I regret to inform you that your particular loan is in a group of loans that the investor will not modify," a OneWest employee wrote her in an October 2009 email, telling her to either pay off her mounting late payments or face foreclosure.

The modification application process continued, however, and the reasons for denial proliferated. She was told at one point to get more income, so she took in tenants. She was asked over and over for the same paperwork -- as we've reported, a typical experience. In all, she says she's applied for a modification about 10 times.

"It's been pure hell," she said. "I've heard every excuse in the book."

Because of the mounting arrears and slumping housing market, she now owes more than her home is worth.

The effort has been a constant preoccupation for years now, and she's communicated with other frustrated OneWest homeowners across the country. Turning OneWest's fears of homeowner lawsuits into reality, she hired a lawyer who prepared a suit in case OneWest attempted to foreclose. In March, OneWest postponed seizing her home at the last minute. OneWest has offered another temporary payment plan, but Jeter is wary that it will end like the last one, with her payments simply lost. Currently, her home is set to be foreclosed next week.

In the meantime, HSBC and OneWest are awaiting a ruling in their lawsuit. The judge's ruling could, as HSBC says in a filing, "cut that Gordian knot" and allow OneWest to provide a modification. The question for Jeter is whether that would come too late.

offering hope without oppertunity is a devil’s gift.to refuse to provide those oppertunities is criminal.
i wish the tarp/hamp oversite commitee’s would recognize that there is NO valid reason for a trial payment plan!if anyone can give me a valid reason for a TPP,have at it.the TPP has harmed more homeowners than it has helped.to me the TPP is nothing more than a deceptive ploy in order to partially collect on a debt.if there is a valid reason for a TPP,why then is there no TPP for a loan origination?WTF.i wish treasury would grow a set of balls.we need a new sherrif in town.one that would not only prosecute anyone that would rob a bank AND vice-a-versa

Barry Schmittou

March 31, 2011, 12:16 p.m.

Banks/Insurance Companies that make mortgage loans are engaged in dangerous middle men crimes in health insurance too.

They are paying doctors’ who ignore life threatening medical conditions such as Multiple Sclerosis, brain lesions, and cardiac conditions of many patients as evidenced by the quotes from numerous U.S. Judges’ seen at : http://www.obamaknowsdoctorscrimesendangerlives.blogspot.com

I’ve said it before and I’ll say it again.  HAMP was a bad joke.  It had no teeth and it was purposely designed that way.  Everyone with a brain could tell you that asking big finance to do something in the best interest of the general public, pretty please? was like asking a wolf to please stop eating the chickens.  At some point we all have to grow up and face the fact that gov-corp is not that interested in Americans anymore.

How can we call these funds “investments” when they are predatory and destructive? Pension funds collected from the middle class inadvertently shatter futures when invested in corrupted Wall Street. That’s why we need state banks (like North Dakota) that re-invest in the middle class dream.

Having financial institutions make all of the decisions is like entrusting crack addicts with cashing the community’s Social Security checks.

Volkswagen Touareg Fort Myers :www.vwoffortmyers.com

Mods involve contracts which is why it is a false hope solution. The focus should be on refinance. Here’s the worst case scenario:
According to Realty Trac and LPS:
In February 2011, 6.8 million properties were classified as non-curren­t inventory.
total U.S. loan-delin­quency rate was 8.8%,
total U.S. foreclosur­e inventory rate was 4.15%

To make the math a little easier assume half (3.4 million) are in foreclosur­e.
30% of loans in foreclosur­e have not made a payment in over two years.

So screw the freeloader­s (30% * 3.4 million) = 1,020,000 You probably don’t deserve help if you refused to make even one payment in the last two years. You will lose your houses.

The rest of you is 3.4 million plus the recently in process foreclosur­es (70% *3.4 million) = 5.78 million. You get the benefit of the doubt. Total liquidity needed from Fed:

5.78 million * (avg 2007 us census home price of 313.6K) = 1,812,608,­000,000

Or $1.8 Trillion in total that we should make available for banks to refinance at today’s 4.8% rate.

The most recently disclosed total US debt was 14,211,567­,662,931.2­3 as of March 28, a 12.75% increase if you let the government alone bear the burden.

Seems possible, next problem please.

EXACTLY Michael—-What are they doing with the TPP money?????

OneWest/IndyMac “approved” me for a 3 month trial mod finally after one year—-I just sent my first payment, and included a letter saying I was CC’ing my trial payment info to the Treasury Dept., my Attorney General, my lawyer, The OCC, and everybody else I could think of, explaining that I will not be taken advantage of—-
So, I get an email and a phone call basically saying “you are most likely going to receive a perm mod, but there is no guarantee”—-WOW—-really?  And where is the money going that I will be sending every month?  What can I expect after my 3 month trial plan?  Will I get that money back?  Will it go towards a perm mod? 
The “escalation specialist” says:  “Well, after 3 months we re-evaluate your paperwork to see if it needs updating, and then we run things by the Treasury Dept.”,——HUH???????

Welcome to another day in ‘Loan Mod Hell”!!!!!

HSBC’s stance in this is just a little bit misleading. Middleman or not, HSBC doesn’t do modifications, period. While they (HSBC) may be unable to modify this lady’s loan because of an agreement with the investors, the fact is that HSBC doesn’t modify loans no matter what role it has - servicer, lender, trustee, investor, or whatever. They do not have a mortgage loan modification program in place. The only program they have is a temporary hardship program which will reduce someone’s mortgage payment for six months. They don’t do permanent modifications. They have no interest in being responsible corporate citizens by helping homeowners stay in their homes. Don’t for a minute believe it’s the investors who are denying modifications when HSBC is involved.

Karen,

From your question it seems like you might not understand what the reduced payment is. It would in fact be applied to your outstanding balance. Congrats on making it past the first hurdle.

I would expect you may have to make 4 or 5 trial payments (regardless of what the program guidelines are - unfortunately the program is voluntary and the guidelines are noe just suggestions)

Be careful if you do not get a permanent mod however, because that is when you can get hit with all sorts of fees (5% per delinquent monthly payment)

This is why I hate modifications, not to mention they usually ignore the existence of a second lien. I prefer that they make low cost 4.8% money available to all to help borrowers dig out from this and other debts with a reasonable chance of success. Good luck.

First off Ms. Jeter should be commended for perseverance and not standing down.

This however begs a much bigger question, all the advisors, former CS big wigs, Fed regulators, to the POTUS did not understand the complexity of MBS, CDO etc. the role of the trustee?

Looks like either some in the room when HAMP was concocted, implemented and sold to the American people were outright uninformed , uninterested idiot’s, or all in the room conspired a diabolical scheme.

MikeC, you NEED to read the articles at http://www.4closurefraud.com and http://www.livinglies.com to see what has REALLY been going on.  The banks and almost all the people involved in the real estate mortgage business have been committing CRIMES - they have committed FRAUD just to get all the money they could rake in.  From the loan origination to the title insurers to the banks.  It is the greatest Ponzi scheme invented, and has the potential to top the Bolshevik Revolution in transferring wealth from one class of people to another.  Wake up and smell the coffee.

WHY THEY WON’T MODIFY YOUR LOAN - INSURANCE BENEFICIARIES WANT TO COLLECT AND PROFIT FROM YOUR DEMISE. THEY CARE NOT THAT AMERICA IS COLLAPSING ALL AROUND US.

LAYERS AND LAYERS OF INSURANCES….

LPMI, BULK & SUPPLEMENTAL, ISDA SWAPS,  BANKRUPTCY BONDS, BANKRUPTCY CLAIMS AGAINST ORIGINATORS, MARGIN CALLS, GUARANTEE FUNDS, CERTIFICATE INSURERS, NET INTEREST MARGIN INSURERS, UCC9 POLICIES PIGGYBACKED ON YOUR TITLE, OVERCOLLATERALIZATION, AND SO MUCH MORE….

HOW MANY TIMES DO THEY WANT TO GET PAID? HOW DO YOU THINK THEY ARE NOW THRIVING WHEN MORE AND MORE HOMES ARE GOING INTO FORECLOSURE?

YOU MUST FIND YOUR OWN LOAN TRUST, FIGURE OUT WHO YOU ARE PLAYING WITH, AND WHAT THE RULES ARE AND THEN BEAT THEM AT THEIR OWN GAME. VISIT PAULARUSH.COM TO LEARN HOW.

EXCERPT FROM AN ACTUAL SECURITY

Lender Paid Mortgage Insurance Fee   # of Loans   Current Principal Balance   Pct by Curr Prin Bal   Weighted Average Gross Coupon   Weighted Average Stated Remaining Term   Weighted Average Original LTV   Weighted Average FICO
N/A   1,195   298,037,894.66   36.95%  7.247   419   66.78   707
0.001 - 0.499   1,765   436,026,046.35   54.06%  7.300   416   78.55   713
0.500 - 0.749   69   17,506,887.19   2.17%  7.912   431   88.20   711
0.750 - 0.999   111   29,148,423.54   3.61%  8.099   428   89.85   713
1.000 - 1.249   95   20,784,240.94   2.58%  8.240   412   97.81   729
1.250 - 1.499   20   5,070,888.19   0.63%  8.340   414   97.83   712
Total   3,255   806,574,380.87   100.00%  7.353   418   75.44   711
MI Company   # of Loans   Current Principal Balance   Pct by Curr Prin Bal   Weighted Average Gross Coupon   Weighted Average Stated Remaining Term   Weighted Average Original LTV   Weighted Average FICO
LPMI Pool Policy   1,753   432,844,402.06   53.66%  7.296   416   78.50   713
MGIC   85   18,652,215.25   2.31%  7.933   419   93.88   717
None   1,028   256,548,959.27   31.81%  7.216   418   63.04   707
PMI   8   2,258,179.30   0.28%  7.347   431   87.58   674
Radian   43   10,262,373.64   1.27%  7.648   426   90.98   695
Republic   1   189,384.33   0.02%  7.832   477   90.00   784
Triad   332   84,663,874.84   10.50%  7.894   426   90.85   714
United Guaranty   5   1,154,992.18   0.14%  7.759   390   88.76   697
Total   3,255   806,574,380.87   100.00%  7.353   418   75.44   711

YOU MUST UNDERSTAND…..

DERIVATIVES - Derivatives create a financial windfall requiring only paying a small fee to a counterparty for the insurance.  Banks and nonfinancial companies use derivatives to hedge against everything from changes in interest rates to guarantee on credit performance. There is no limit to these derivatives and they can be used to go far beyond just covering the value of the bond or default.  About 98%, or about $7.37 trillion in derivatives are held by financial firms.  J.P. Morgan Chase, Bank of America, Citigroup, Goldman Sachs Group and Morgan Stanley account for about 95% of the derivatives total, in line with data from the Office of the Comptroller of the Currency.  SOURCE: from the WSJ.

What happens when the side that wins is also the party who makes the decision about a loan mod or foreclosure or is in control of the party that causes the collapse?

Many derivative contracts have already paid out, AIG and Bear were saved to pay out on the outrageous claims.  But much more is still hanging out there just waiting for more carnage to collect.  Layers and layers of insurances(credit enhancements) still available, you just need to give up and walk away so they can collect. 

Senator Levin said it best when he revealed the truth; Goldman called them “shitty deals.”  And Goldman went way beyond hedging their holdings and insuring dollar for dollar the risk. They knew the “shitty deals” would implode. As part of SENATOR LEVIN’S investigation, he made public email communications of GOLDMAN SACHS trader Fabulous “Fab” AKA Mr. Tourre who stated”those poor subprime borrowers won’t last long.”  Released Goldman documents also showed that they wanted to gain a substantial benefit by gaming the implosion to their benefit.

So my question is, are we better off than before, or in a more precarious place? I would argue the latter. The only change has been mounting foreclosures, home price collapse, economic calamity, escalating government debt, and drum roll please, do nothing investigations and more do nothing federal agencies.  Wall Street is back to business as usual, while Main Street is closed down.

Pamela, We appreciate you sharing your story, I hope that everything works out for you and your family!

As an aside, I’m still looking for a way for the public to find out who these “investors” are.  Why are they such a big secret?  Don’t we have a right to know who is in partial control of our lives?

We NEED to insist on reforming this secretive system!

Kelly L. Hansen

March 31, 2011, 7:16 p.m.

Mike C, Danielle Hills and Paula Rush know what they are talking about.  Wow.  I can’t wait to go to PaulaRush.com when I am done writing.

Your statement “30% of loans in foreclosure have not made a payment in over two years.”  Actually 100% of loans in foreclosure have not had a payment applied to them because when a lender forecloses against a homeowner it can no longer accept payments from the homeowner as litigation moves forward.

Homeowners and investors are NOT the enemy here.  It’s those lovely middlemen mortgage loan servicers and lending entities and securitizers/trustees everyone has thought so dearly of for so long.  I’ve always believed in the banking system.  I’m 48!  I can’t believe what is happening here, now.  Our Banking system stealing from the little guy?  Our government is crooked?  Wall Street is manipulated DAILY.  We’ve got to think about our kids lives and what we are leaving them with.  How will we live with ourselves if we don’t leave here a little bit better then our parents did?

Making temp loan mod payments is like throwing money away. You would generate better karma giving it to charity.
Do not settle for the temp mod deal. Hold out for a real mod or walk, saving your monthly payments as a nest egg for a rental and a new life.
They can’t steal all the houses. We are making some headway. Forget your credit score, at the end of the depression no-one will have a good one. No more checks for banks. Let them pay tax and insurance from escrow, or you pay it. Forget P&I. Those days are over.
Put valuables and irreplaceable items (photos, etc.) in safe deposit. Direct your mail to a PO Box and change the mailing address on important legal, medical, financial and educational records. Don’t let important mail go astray. Update every bill you pay with the new address. Use a cell phone not landline for important calls.
If you have to leave, your personal valuables and paperwork will go with you. Scan in docs, and put a hard-drive with these in the deposit box. Switch to a laptop and keep it with you. If goons come toss your house as “inspectors” they can have the clothes and kitchenware. Keep jewels, silver, cameras, etc. safely in a bank box, locked up @ work, or with a trusted third party. (Mine is in a credit union safe box.)
Never send a bank money you borrowed and do not take money from an IRA for the bank. They can’t touch it in a suit - why just hand it over? No. Don’t do it.
Florida - you can do it. No. More. Checks.

acmodspecialists

March 31, 2011, 8:12 p.m.

The house voted yesterday to kill the HAMP and it passed
But Why HAMP really bombed??
Obviously, it’s inconceivable that HAMP could have flopped because the feds: Allowed loan servicers, the party with the strongest incentive to foreclose, to decide whether to reduce people’s mortgage payment
Failed to monitor the program, even when modifications actually increased how much people owed
Rejected calls to adopt meaningful goals and benchmarks for evaluating HAMP’s performance.
Permitted servicers to foreclose on homeowners who were supposedly under review for modification.
Let banks and servicers turn modifications into a profit-center by gouging homeowners with high fees, often pushing them into default
Ignored evidence of gross negligence and misconduct by servicers
Refused to sanction servicers that flagrantly broke the government’s own modification rules.

acmodspecialists

March 31, 2011, 8:23 p.m.

WillHarper, Kris Alman, ibsteve2u, I agree with all 3 comments, as to Mr MikeC, you forgot to mention one very important number 700 Billion Tax payer money for the Banks, There is your “total liquidity needed”.  by the way the banks have records profits (liquidity)

acmodspecialists

March 31, 2011, 8:28 p.m.

Debra, you almost right HSBC almost never do permanent modifications, most of them are for 6 or 12 months but you can renew them 2 or 3 times however I achieved 4 permanent modifications already with HSBC, 2 with principal reduction one 20K and the other 32K reduction but they are very rare

acmodspecialists

March 31, 2011, 8:32 p.m.

Micke C, 4.8% money available to all to help borrowers dig out from this and other debts with a reasonable chance of success. Its a great idea, I wish someone in the treasury would listen to you

Having haggled for three loan mod’s (two on our home and one on a commercial loan), I can tell you that these bankers (mortgage servicers) could give a rat’s a** if they help you or not! 

We were told we HAD to go through a trial payment period, even though we had NEVER been late on our house payment, ever!  We were hurting from severely reduced income and practically zippo cash flow.  Their solution is to drag you through the mud, jerk you around, and then maye they’ll approve you?!? 

I blame the POLITICIANS!  There should be specific laws set up to protect consumer rights, but the politicians are too busy playing slap and tickle with the bank lobbyists, too busy prostituting themselves for “campaign contributions.”  See who got the money from banks at: http://www.opensecrets.org

Well, this is just another wrinkle for both the Servicer and “HOLDER/INVESTOR” to hide in. MHA & HAMP are Federal Programs and guess what folks, if you dipped into the TARP bucket, whether you repaid or not, then do the next right thing.
We are preparing a proposal to Treasury that will eradicate up to 95% of foreclosures and elimnate recidivism. American Home Ownership Recovery Program (AHORP). It will be a fixed price per asset to Treasury and save for those most unfortunate who have lost jobs this will save their home. AHORP will also create necessary cash flow for Treasury, stimulate Capital Markets and create jobs. Best part limited taxpayer dollars at risk only “explict” guaranty by Treasury. The commercial version of AHORP will be online in 6-9 months. No cost to homeowner.

i live this shit every f-ing day.
for those i try to help
you know what?
i will never stop

This is the disgusting unjust irony of this whole economic situation:

I just saw on the news tonight here in California that 6 senior citizens sharing rent on a house were evicted onto the street this morning with a 15 minute notice of eviction—-and the owner of the house “thought” she had signed a loan modification…on the same day that a billionaire buys a massive estate here in California for a record-breaking 100 MILLION dollars—-which he is not even going to live in.

some great thoughts here!

yeah, Obama has screwed this up & he’s lost my future vote. a housing fix would greatly help the economy AND people.

a loan mod simply delays ALL THE FEES THE BANKS WILL CHARGE. they’ll ADD any $$ not paid from a mod ONTO your balance w/ interest 7 FEES, etc.  they also can demand that $ in a lump sum if u can’t refi, etc.

AGAIN. it’s the banks that win…

good luck everyone.

FRAUD-FRAUD-FRAUD.

Trial payments are just another scam to induce people in a jam to pay a bank more money. The were/are on a downhill merrygoround and didn’t/don’t realize it..

Its all about the banks owning the politicians,  and the politicians owning the courts.

until such time as the people in this country realize that the USA has been captured by criminals called Bansters and further realize we have no deficit problem but an income problem because the people with the money have bought the polticians and had them find a way for these same criminals to avoid paying taxes.

WAKE-UP AMERICA AND SWELL THE COFFEE-ITS PERCOLATING RIGHT NEXT TO YOUR BED!

Well, Chase does even less than HSBC IF that’s at all possible.  Chase is abysmal.  I just received the results of my forensic audit from MFI-Miami and am happy to say there’s more fraud being committed by Dimon and Chase than I even thought possible.  Thank you, Steve & I’m SO looking forward to the next step in this 2 year nightmare. 

ProPublica - thank you for the reporting.  How about a piece on Chase and the fraud they commit?  You’re more than welcome to view my info. after my attorney reviews it. :)

OneSovereignCitizen

April 1, 2011, 7:44 a.m.

EVERYONE…

FIX CONGRESS FIRST—These whores are the source of your woes.  We The People have only one option left to Save The Republic: an Article V Amendments Convention (Google it and LEARN how we can help ourselves, and do it lawfully!).

Visit: article-v-convention[.]com

We NEED Constitutional Amendments (High Law) to force the oligarchy-styled government to serve the people; serve us in office or serve time in prison!  Don’t let them steal your children’s future!

Collaborate by personally networking with local officials—city, county and state—get them completely and fully on your side.  Get each official to sign a statement or make a public declaration that they work tirelessly to COMPEL Congress to call a convention for the purpose of proposing amendments as mandated by Article V of the U.S. Constitution.

Check out this link—-looks like HSBC has a little experience with fraud:


http://money.cnn.com/2010/12/06/news/companies/Madoff_HSBC_lawsuit/index.htm

Veronica Raphael

April 1, 2011, 4 p.m.

How can the Banks/Servicers do this after taking the TARP money!  It appears that the government has not stood by the people who elected them to office.  We the People have the right to obtain loan modifications without prejudice.  Why is it that the layers of investors can now say, “we don’t allow loan modifications on certain loans”.  I guess because that was not one of the questions asked at the hearings 2 years ago!  It is a simple procedure to follow to provide qualified homeowners a workout that can get both the bank and homeowner back on their feet. A good underwriter can rewrite the mortgage based on a lower interest rate, lower property value, amortized over an extended time latched onto the existing term of the loan.  Yes Say Yes to implementing the PLAN.  The arrears is due to the fact that when the homeowner was current or 1 or 2 months behind, the representatives at these servicing companies told the homeowner the only way to qualify for the existing loan mod programs was to be 60 days or more delinquent.  Once the homeowner became late and waited 12 months for an answer, the banks/servicers told them “YOU DO NOT QUALIFY” because you owe us to much in late payments, fees and penalties!  WOW!

Veronica:
YOU ARE EXACTLY RIGHT!
the people were “played”. this will hurt the country for a along time, but the pols don’t care, nor do the banks.

Peter Andy Wolfe

April 1, 2011, 4:52 p.m.

Personally, If modification of payments does NOT involve modification of obligated total loan amount, then I would support legislation that rips these two middlemen from the picture and establishes Federal loan servicing (and loan modification arbitratration).

We have state offices of support enforcement that insures the flow of payments from one party to another. A government office could be established to do just this.

A Federal arbitrator that is empowered to cram down where needed, but whose goal would be to negotiate a workable settlement.

The goal would be to keep homeowners in their home AT THE ORIGINAL LOAN AMOUNT -  Call it similar to a reorganization, as long as “reorganization of Pamala” passes the sniff test.
She may be $1million in debt and earns $12/hr, but if 40% of her gross can cover at least interest only at a modest 3% loan of 30 years or longer. Cram it down hers AND the investors throats.

Modification reviews might be mandatory every 3 or 5 years.

Pamela can have her temporary payment reduction and stay in her home, but the original balance will remain the same.
She’s an adult, she signed the papers and she owes the money.
regardless of the present value of the home - she has incurred a debt that must either be paid or she must file for bankruptcy.

So glad my husband learned from his depression era parents to pay cash for houses. Our first mortgage was for 20% of the value of the small house and was paid off in two years. After that we paid cash for each of three houses we owned.
And we rented til we saved the the cash for the kind of house we wanted. In the first Depression it was the balloon payment at the end that broke people. In this Depression, the banksters just found another way to take you for what you’ve paid on property that they won’t let you keep.
Maybe the next generation will learn to rent before buying and never buy if renting meets the need for housing. This was once a nation of renters. Maybe that will be the future, when the young people rebuild after the collapse of America is completed. Me, I’m tired of it all and ready to move into a garden shed.

Rob Inder-Smith

April 1, 2011, 7:35 p.m.

I’m shocked that the word ‘lawyer’ was hardly used in the article. ‘Road-blocking’, stone-walling, whatever we like to call it, is the work of the financial instution’s law firm. In Australia, bank policy allows them to break statuted law and the exact same thing is the result - people are prevented from refinancining their mortgages.
  Frank, you say you won’t be voting for Obama because of it. Try ‘won’t be voting at all’, because as long as we continue to vote, we perpetuate this whole evil cycle of the myth that we live in a democracy.

Rob:
u r right, this is NOT a DEMOCRACY.

& ur right again, i won’t vote for the 1st time in my life next election. OR i’ll Liberterian since it’s a 3rd party, but has no chance to win. a sort of protest vote.

MY ONEWEST “ESCALATION SPECIALIST” INFORMED ME THAT

ATTORNEY’S FEES WILL BE ADDED TO MY PAST DUE

BALANCE….  AND FORECLOSURE FEES…..

AND I SENT MY 1ST “TRIAL PAYMENT” IN THE UPS NEXT DAY AIR

ENVELOPE THAT THEY SENT TO ME…5 DAYS AGO…AND HE

CAN’T FIND IT…

THIS IS THE SURREAL, HELLISH WORLD I HAVE BEEN LIVING IN

FOR MORE THAN A YEAR…

AND STILL, NONE OF THE WALL STREET BANKSTERS ARE IN JAIL

FOR THE GIANT PONZI SCHEME PERPETRATED ON THE

AMERICAN HOMEOWNER…

THAN A YEAR…

We need a class action lawsuit against our government that told us we were able to get a bailout but gave it to the banks instead. Hell I listened to all that crap Obama preached and all it got me was a month away from foreclosure. I would have tried to sell my house 2 years ago and saved my credit. But was told I needed to be late on payments to qualify, so I was. Did the modification and then found out it was temporary and it was fees I was paying! Omg! I got screwed out of getting a modification and screwed out of my credit. Not to mention all the fees they stuck on my loan.20,000 to be exact! We need help from some fricken body to stop what is being done to us. If Obama spends any more money to dig us deeper in debt it should be to pay the people/tax payers back what they lose because of him. We have a one man show and where the hell is congress? They need to get there heads out there asses and do something now not later.

acmodspecialists

April 1, 2011, 10:57 p.m.

Em Hopper, this goes beyond paying your home cash or not,  there’s a much bigger problem lurking in the shadows, There’s a lot of wonderful technical stuff involved with wrongful foreclosure claims, There have been widescale wrongful foreclosures.  If these foreclosures were nonjudicial foreclosures (and maybe even for judicial foreclosures), it means that the foreclosure sale purchasers have clouded title.
The homeowner still has claim to the property and there might still be a valid mortgage on it.  And as many foreclosure sales end up with the lender buying the property and reselling it, what does that mean for the eventual end-buyer?  What does that mean for their title insurer?  This raises all of the classic bona fide purchaser protection issues,  at least one title insurer has gotten spooked.
Just consider what this means for homeowners who are current on their mortgages and want to sell their house.  Are we sure who actually owns their mortgage?
I have one word for all this PONZI

acmodspecilist—-

If they deny me a permanent mod, how about the clouded title issue?  And MERS?  How can they foreclose and/or sell a house with clouded title?

acmodspecialists

April 1, 2011, 11:22 p.m.

Frank, Rob, Its not a Democracy is a Plutocracy: Government by the wealthy, a wealthy class that controls a government, often from behind the scenes.  Plutocracy is any form of government in which the wealthy exercise the preponderance of political power, whether directly or indirectly.

acmodspecialists

April 1, 2011, 11:32 p.m.

Karen, I’m not an expert on that field, but you can find a lot of information on MERS and clouded title here 4closurefraud.org. Freddie Mac recently (March 24) sent a bulletin telling servicers managing its loans that they can no longer foreclose in the name of M E R S.
I hope this helps

acmodspecialists

April 2, 2011, 12:06 p.m.

60 MINUTES | FORECLOSURE FRAUD FEATURED THIS SUNDAY ON 60 MINUTES (CBS teaser video)

cbsnews.com/video/watch/?id=7361457n

Has anyone taken a look at HSBC’s board of directors?  The bank’s tag line “The World’s Local Bank”.  http://www.hsbc.com/1/2/about/board-of-directors

Collectively these people have no obligation to any single country to help it in a time of crisis—let alone to help middle class Americans restructure their loans to stay solvent. 

And the GOP wants less regulation on the banking and finance industry?  What could go wrong?

Thanks, acmod—-I’ll be watching that 60 minutes—-looks interesting!!!!!

Looks like hopefully all the fraud will start being exposed…

How to be a loan mod servicer:

1.  Tell homeowner in first letter that “we want to help you stay in your home!”  and:  “We can only help you when you are in default—-so stop paying your mortgage!”

2.  Request documents at least 5 or 6 or 8 times, then explaining that you never received any of them…ask to please send again…and again…and again…

3. At the same time, go forward with all procedures relating to foreclosure on the homeowner.

4. If homeowner sends a heartfelt letter explaining how the collapse of the economy has devastated their family, and they are doing everything they can to make money, just pretend to be sympathetic, and then act robotic.

5. Hopefully by now the homeowner will give up, after they have acquired various health problems related to the stress of it all, and will just let you foreclose and make the money that you so desperately want from the foreclosure.

6.  Be sure to emphasize at the end of all correspondence that you are a debt collector…nothing else.

7.  If the homeowner tries to sue you for some kind of fraud…well, we’re working on that one right now…to be continued…

Christopher King, J.D.

April 3, 2011, 6:17 a.m.

I’ll be watching 60 Minutes with rapt interest.

http://mortgagemovies.blogspot.com/2011/04/us-trustee-lawrence-sumski-hates.html

http://www.youtube.com/watch?v=y5mtCjSioKE

SATURDAY, APRIL 2, 2011

NH US Trustee Lawrence Sumski hates Mortgage Movies exposing Harmon Law Office potential B10 fraud.

I, too, am a Southern California homeowner with One West who was turned down for modification and we were told we we “not allowed” to know who is currently holding our papers. We qualify but we turned down. Now we are three months behind on our mortgage. Our family of four is looking at loosing our house this year. I worked my whole life to make a middle class home for my kids and create a secure future, but with lay offs and underemployment, there is little hope left for our family. Even if we sell this house we’d still be left with so much debt we’d never even be able to rent a home. Say good bye to the American way of life, thanks to the banks and corporate America.

acmodspecialists

April 3, 2011, 2:29 p.m.

Inside Job, Oscar-Winning Documentary, Now Online (Free)

openculture.com/2011/04/inside_job.html

acmodspecialists

April 3, 2011, 8:52 p.m.

For more on the 60 minutes special

cbsnews.com/8301-504803_162-20049744-10391709.html?tag=contentBody;listingLeadStories

This article is part of an ongoing investigation:
Foreclosure Crisis

Foreclosure Crisis: Banks and Government Fail Homeowners

Banks and the government have fallen short in helping homeowners in danger of foreclosure.

The Story So Far

Systemic failures at the country’s banks and mortgage servicers have exacerbated the most severe foreclosure crisis since the Great Depression, and government efforts to limit the damage have fallen short. ProPublica created an unrivaled database of homeowners who have faced foreclosure, opened a Facebook page to encourage homeowners to share their stories, wrote profiles of some of them, and incorporated their experiences into our reporting. We also provided a comprehensive rundown of the numbers behind the crisis.

More »

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