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Survey: Homeowners Working With Servicers Often Blindsided by Foreclosures

Many housing counselors in California are seeing clients lose their homes while pursuing mortgage modifications. That’s not supposed to happen, but there have been no penalties for the banks involved.

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Wells Fargo customers are helped by bank workers during a free workshop for customers who are facing mortgage payment challenges April 26, 2010 at the Oakland Convention Center in Oakland, California. (Justin Sullivan/Getty Images)

In May, we published a story about how disorganization at the big banks has led to mistaken foreclosures: homeowners were under review for a modification, but were suddenly foreclosed on because of a communication breakdown within the mortgage servicer.

A recent survey of California housing counselors demonstrates that’s a widespread problem, at least in the Golden State.

The California Reinvestment Coalition surveyed more than 50 foreclosure-avoidance counselors throughout the state last month. The counselors who responded to the survey work at organizations that serve more than 11,000 homeowners each month.

One of the questions, spurred in part by our story, asked whether any of the counselor’s clients had seen their house sold in recent months while working with the servicer to avoid foreclosure. The administration’s mortgage modification program forbids servicers from conducting a foreclosure sale if the homeowner is in the midst of the modification review process, but there have been no penalties for banks that have done so. Homeowners also have no clear remedy in the event of a sale.

According to preliminary findings that CRC shared with us (the full survey will be released later this month), nearly two-thirds of the counselors said that at least one of their clients had been foreclosed on at the same time that banks were supposedly working with the homeowners on their mortgages. Another 23 percent said they’d been able to intervene to stop a sale. Counselors said they’d had this problem with many different servicers (including the largest ones: Bank of America, Chase and Wells Fargo). Only 16 percent of the counselors surveyed said they’d never encountered that problem.

The results show that more needs to be done to ensure homeowners are fairly evaluated for a modification before being foreclosed on, said Kevin Stein, CRC’s associate director. “This is such a basic failing of the system, and if we can’t agree to fix it, what hope can we have for more significant policy solutions to the crisis that could bring more relief to neighborhoods?”

State Sen. Mark Leno, a Democrat from San Francisco, is pushing a bill in California that seeks to address the problem. It would require the servicer to meet certain requirements to ensure that a homeowner is reviewed for a modification before foreclosure and would provide for penalties if a servicer broke the law and sold the house anyway.

Since our story in May, we’ve heard from a number of homeowners who told us they had lost their homes this way. Many have been in California.

Treasury Department officials told us that homeowners being foreclosed on despite being currently considered for a modification should call the HOPE Hotline (888-995-HOPE) for help. But as we noted, consumer advocates have complained that the hotline is often not effective in addressing servicer errors.

The servicers, for their part, say they are struggling with the high volume of delinquencies and do their best to avoid any mistakes. Vicki Vidal, of the Mortgage Bankers Association, said foreclosure errors are rare, particularly if struggling homeowners are prompt in contacting their servicer.

We are dealing with a large number of servicers/investors who start the foreclosure process during the review for HAMP and other workout options.  Typically the sale date is postponed multiple times until the file is decisioned.  This leads to increasing fees and costs to the homeowner quicly creating a much deeper hole.  Often times the servicers “walk” the homeowner right up to the day before the scheduled sale before postponing.  This creates a tremendous amount of stress on the families involved.  If the servicer or investor decides to deny the request the tpically do it the afternoon before the scheduled sale date leaving the homeowner no chance to properly process the situation and implement their “plan B”.  Homeowner’s deserve an honest oppurtunity to state their hardship and be reviewed for possible remedies without the worries of losing their home during the process or 10 hours after denial.

This isn’t just a California problem. The big banks are going along unbridled and being allowed to make up the rules as they go. And why not? The taxpayers just keep bailing them out. If they lose on a mortgage, the federal government simply pays them somewhere between 80 and 95 percent of the loss, and the bank regains possession of the property. Then, when they sell it on a short sale for some absurdly low price, they end up making more than they would have if the original mortgage had been paid according to terms.

Apparently, Vicki doesn’t work for Chase Home Financial.  They are an absolute nightmare to even try to work with because their idea of “working with customers” is putting us on eternal hold, transferring us, disconnecting the call, etc, etc. etc.  They also don’t respond to anything in writing or to emails.  Unreal…I WILL win this battle, though.  Oh yes, I WILL win.  :)

I have a client who goes to sale tomorrow. Last Friday he was in review with Chase, today he was “approved for denial” and the property goes to sale tomorrow. I informed Chase they are in violation of several Treasury Supplemental Directives, but Chase does not care and refuses to stop the sale. I have sent many e-mails to Jamie Dimon CEO of Chase informing him of the error and his response is to have collections people call me and ask for reinstatement.I am a HUD approved housing counselor and an attorney of almost 30 years and I cannot understand the doubletalk Chase employees give me. I have never heard of anyone being “approved for denial”. Homeowners don’t stand a chance with Chase.

I notice the comments coming in talk a lot about Chase. That’s my lender too, and I can’t tell you the number of times I’ve hung up after trying to deal with those ninnies and thought, “Gee, what a sad, sad day it was when her father met her mother.”

I did finally get a loan modification where they dropped my payment about $450 a month “on a trial basis.” This was to be made permanent after 3 months, but when it dragged out past 6 months I said I wanted it all reduced to writing and be on a permanent basis. That’s when they looked at it and decided that based on my income, I couldn’t afford to make the reduced payment that I had been making, so they rescinded the temporary deal and raised the payment back to the original payment I could no longer afford: let’s see, they said I can’t afford to make the payment I was making, so to resolve the problem, they would raise the payment.

Hmmm! I call that Chase logic.

To add insult to injury, they told me that same day, that with late charges and added interest, I was now $8,800 in arrears, “and we’d like you to overnight that to us by Western Union.”

After attempting to work with these morons for 18 months, we are now resigned to losing the home we’ve lived in for more than 20 years. Rather than work with us, Chase will foreclose and sell this property on a short sale for maybe half the market value, then go with their fat little hands out to the taxpayers for reimbursement.

One last thing ... I’ve also been through the endless transfers that end up at recordings that say, “you’ve reached a non-working number at Chase. Please hang up and try your call again,” and other folly calls that lead to nowhere. I used to think the federal government had to be the most mismanaged organization in the world, but Chase is far worse..

I was foreclosed on my house my commercial property and my business not for lack of payment of my Mortgage but because the seller (Reverant Margaret Lembo) wanted to still the property back from me due to the increased value of the property. After investing over half millions dollars in improvement over the ten years period, 30 years of my Life all my saving and hard work.The conspiracy of that evil woman and her family interfering with my business and my life is a typical fraud how they made their money.In the process I was also the victim of a vicious assault and battery.

The servicers routinely lie and disregard the Supplemental Directives from Treasury, because they can.  The MHA program and the subsequent programs (HAMP, HAFA etc.) are smokescreens from an inept Administration that can do nothing to them except give them bailout money. 

There is zero accoutability.  They are flushing the American dream down the toilet, yet the Administration says they are “meeting the goals set forth in curing the problem.”  This is a charade the rich people act out to make the poor people believe they are doing something, when, in fact, they are doing the same thing that has occurred for years:  stacking the deck with cards that will make the wealthy class richer at the taxpayers’ expense.  And until the Silent Majority take action, the wealthy people will contine to march their rich candidates across the stage, lie to the voters, and then legislate laws that benefit Wall Street and the banks.

This is NOT disorganization. This is pre-planned systematic criminal fraud on a truly massive scale by Chase et al. They do it because they can. It does not have to include the “ninnies”. It is simply enough to hire them, then create a byzantine unworkable system for them. The rest is profit.

As I read what others have to say I can feel the hair on the back of my neck standing straight up.  My husband and I lost our home after 15 yrs.  I tried so hard to do what they asked but of course it was never enough.  Even after sending the completed paperwork several time through the mail and faxing it somehow it never got to them (so they say).  I was on the edge of dispair when I realized that I was never going to do anything right (according to them).  I was heart broken.  And because we had to move I had to give up my dog.  My boy…..I feel the tears coming on as I write this.  It was awful and I don’t know how long it will be before I really feel like my self again.  I have never really wished anyting bad on anyone (fear of karma) but I really, really would wish all of these so called buisness would rot in hell!

So, HOW does Chase continue to get away with this??  I’ve spoken to 2 people at HAMP who have told me I’ve “finally reached the right people” and THEY are dealing with Chase directly.  Also, thanks to Barbara C, I’ve sent a formal complaint against Chase to SIGTARP.  I think the more complaints they get from consumers, the better chance we all have of getting through this,  My income IS ridiculously documented (I’m a teacher), I’ve sent docs at least 5x now and they always seem to get “misplaced.” Dimon, Lowman, Cook NEVER respond to emails because I’ve been emailing daily for over a week.  I even Cc Paul Kiel at ProPublica. 

Something HAS TO work.

After reading through all of these responses, I haven’t found one that indicates Chase was on the up and up. Chase/J.P, Morgan should be disenfranchised and its officers made to repay its bonuses and then jailed. The MAKING HOMES AFFORDABLE is probably the greatest fraud perpetrated on America.

Banks are not the only ones blindsiding borrowers. Loan servicers are the biggest culprits of deceptive loan practices.  Aurora Loan Services is the worst. I’m qualified to say that because I’m a realtor who has been attempting to help clients save their homes (no charge) from these and other loan servicing sharks.  I fell victim to their deceptive web and had my home stolen out from under me.  These servicers instruct you to be 90 days late before they will discuss converting you from an adjustable to a fixed, or discussing a modification of any kind. On day 91 they file a Notice of Default and begin accruing erroneous and usurious fees.  You are then threatened with foreclosure for the next yr, sometimes two, giving you no option but to sign their forced forbearance agreements and all the while continuing to make your mortgage payments.  Aurora never does perform on these “workout” agreements, while the homeowner continues to consistently pay every mo.  Aurora runs up $40,000 to $100,000 worth of fees and penalties while they give the borrower the run around about a “fake” modification -  Fake because they never have any intention of modifying your loan. Behind the scenes they are recording substitutions of trustee and changing beneficiaries so they are ready to pounce and foreclose once their ducks are all in a row.  You never know when that will be.  You just come home and find a Trustee’s Sale Notice posted on your door - and this is while you’re making all the payments. The plug has been pulled.  You think filing a Congressional Complaint with the OTS will help.  Nope.  It may get you a 14 day postponement while a ridiculously false timeline is submitted (on day 14) by Aurora to the OTS. You then have an opportunity to write a rebuttal. But not really because the postponement is up and your home is sold on the courthouse steps the next day.The rebuttal is not read or heard. Oh, you could save your home if you pay an additional $40,000 in fees and penalties. But, I see a problem here. You aren’t given a breakdown of this usurious amount. And who do you think the new owner is?  Aurora of course.  Here’s an interesting fact - they have a fiduciary relationship with their investors to do diligence in collecting mortgage payments.  Then they establish a relationship with the borrower by forcing them into never-ending forbearance plan, all the while collecting fees from both investor and borrower.  It serves Aurora well to delay, delay, delay.  They are paid by both the investor (to collect mortg pymts) and the borrower (foreclosure fees, late fees, penalties).  The longer the borrower is on a never-ending forbearance plan and strung out, the more money Aurora earns. So wait.  What’s wrong with this picture?  Doesn’t that make Aurora a dual agent serving two masters (investor and borrower)? The investor’s goal is to collect on their investment; the borrowers goal is to hold onto their investment through a modification plan. Aurora’s goal is to make this a never ending gravy train and to receive payments from both.  Remember, Aurora is also paid by the government for each borrower who is put into a “trial” modification, EVEN IF Aurora never performs and approves the modification.  So the more fake modifications, the better.  Wake up America.  Is anybody angry about this?

joeonline@first-time-home-buyer-blog.com

July 9, 2010, 10:14 p.m.

What a great fraudulent marketing tactics! Using this tactics would let them earned more than they suppose to be.

Thank you Paul.  I always look forward to reading your blog and I appreciate it when I send you an email and you respond.  You have helped many people and I admire your work.

HAMP is a failure.  Unless legislation is passed that imposes severe penalties on the banksters, nothing will change.  I have no faith in any kind of law being passed that would punish a bank.  This country is ran by Wall Street and the banks own the government.

The rich will get richer; the poor will get poorer.

beingmiddleclass.org is a forum for exchanging information on how to survive and strengthen middle class Americans.  Please join us.

Just click on the link below and watch the video. Here’s the reason Chase or any of the other idiot banks have zero interest in modifying your mortgage.
By putting the homeowner into a foreclosure and eviction situation, they make a greater profit AND receive their money from the feds in months rather than years.
It’s obvious from this that the banks put on this sham only so they can wring their hands before the taxpayers and plead, “Gee, we did everything we could to keep this homeowner in hiis home,” knowing full well that they intentionally sabotaged the thing form the very beginning.

http://www.youtube.com/user/fiercefreeleancer

There are a lot of angry people.  Stories shared on shamethebanks.org and beingmiddleclass.org are just a few of the forums where homeowners are angry, revealing exactly what the banksters are doing.

It is a crime.  I agree with pastor that the banks need to be dismantled, they are too big to exist and the white collar crimes committed are evident and the perpetrators should be jailed.  This is no different than the Madoff ponzi scheme.  In fact, it is on a bigger scale yet we have not seen justice.

People are angry.  Since the middle class represents a majority, we have the power to change Wall Street controlling the government.

The banks are too big to exist and should be dismantled.  Bernie Madoff had nothing on the criminals perpetrating the fraud on millions of American homeowners.

Vote the career politicians out.  What will lobbyists do if they cannot buy the politicians.  If a politician serves one term, like our forefathers intended, there will be less chance of corruption.

Phyllis A. Ramirez

July 11, 2010, 5:37 p.m.

I think we have our servicer scared…we have never run from them, have tons of paper and scanned documentation and, we believe, can prove fraud in terms of the Tila, RESPA laws, consumer fraud without a doubt under the Consumer Protection Law. When all is said and done…we can create as much confusing, but true paperwork as they have, delays, directives, etc. to confuse them to the point where they simply will not know what to do. Even though they put all of our correct payments in suspense and they are not being applied to paying down our mortgage, I have used the original statement for every month for almost a year(just changed the dates) and not the current ones they send with wrong interest rate, payoff time, amount owned in late fees,and more. I have just used the original one, add the correct dates and send my check in the mail paying the month prior so the payment is never late with a delivery confirmation. We just sent the same letter to 4 different people at US Bank Home Mortgage with a delivery confirmation and a signature return request form with a tons of heavily, well worded questions, sort of like advance directives and, by law have twenty days to respond to say they received our letter and within 60 days must respond in written to all of our questions.

Now we are having fun messing with them. They told us verbally over the phone that we have done everything right & what we were supposed to do for the HAMP plan and we have never avoided dealing with them. However, they are still sending breach of contract notices, threats of foreclosure, etc. Well, we are prepared to give them a run for their and own money to the point that they will probably pay us to go away…they will owe us a lot of money according to all their violations we have undercovered to date. Guess we will see what happens next. Can’t wait. Sort of fun to know that we already have them worried, but now once they receive our 5 page letter of denial and questions re: all hm mortg info and request for copy of original note (most important thing you can do) and who or what entity denied our loan…then the real fun and party begins and we will walk them down the road they have walked us now for so long with all their trickery and lies. Wish us luck.

Odd.  I posted a few comments and they are not showing up.  there are a lot of folks at beingmiddleclass dot org and shamethebanks dot org who are trying to get this story in the media, front page, where it belongs.

We will help you fight the fight.  Lots of resources available at beingmiddleclass dot org and we are coming together to strengthen the middle class and fight the banksters.  We welcome you.

@Pastor Dave :

What a great video! thank you for sharing it.

Slowly but surely, as the word gets out, Chase and the other lenders are beginning to get nervous. Over the past month, I’ve noticed their strong arm tactics have either been softened or stopped altogether. Somebody his up is paying attention, and I can’t believe it isn’t the Congress, nervous about losing their jobs in November. The number of voters who are losing or have already lost their homes has grown to a sizable block—and they’re pissed. If I were a betting man, I’d gamble the farm I’m losing that the pressure will be off until after the elections.

Stephanie Beine

July 13, 2010, 7:25 a.m.

I work for a law firm that has a loan mod dept. and I personally have been doing this for years, even before HAMP. The accidental foreclosures have gotten out of control the past two months, I have had this happen to five clients recently and it is absurd and there is little recourse to fight it and in non-judicial states or states with no right of redemption, these borrowers are screwed! it’s sickening and the industry has made me ill!

It does no good to only complain.  We must fight this dragon on many fronts - the media, the courts and in the political arena.  I’ve met with legislators and I’ll continue to pursue that avenue.  I’ve also begun a class action suit and will vehemently puruse Aurora.  Our group of Aurora victims has begun attacking on many fronts - meeting with newspaper reporters, calling the media in order to have a news station pick up our story, and a letter writing blitz to all our politicians, the FBI, attorney generals, the Treasure Dept, the BBB, the Federal Trade Commission, the Office of Thrift Supervision and anyone else we can think of.  We are not going down silently.  We are not having our homes stolen by these crooks and then passively walk away.  I am also organizing another means which I don’t feel I can discuss here.  But believe me when I say the middle class will not be stomped on quietly.  The rich have enabled this fraud to be created in a “legal” way. I have nothing against those who have gained wealth by legal means.  But to become wealthy at the expense of fraudulent acts against the middle class?  For that I am angry.  And the middle class must begin to fight back.  Did you know legislation is being written to crack down on the banks - but guess what?  Who do you think is the enforecment police?  The banks will police themselves.  What a joke.  Starts writing your Senaotrs and Congressman and tell them to water down this legislation is NOT OK.  Educate yourselves.  Find out what is happening in Washington.  Yesterday PNC (once National City Mortgage) actually admitted to me that they rather foreclose on my client than cooperate with us with a full price offer that will pay both the 1st and 2nd loans IN FULL.  They will not postpone the foreclosure while we go through a 30 day close of escrow.  They were supposedly instructed by their investors to foreclose rather than be paid in full.  What?!  That’s proof in the pudding.  They are benefiting more from foreclosures than being paid in full.  And my client loses the 10k they will get from the sale, plus have a foreclosure on their record. This is insanity!  But we beat them at their own game.  We are closing in 3 weeks BEFORE the foreclosure.

One year ago, after six months of processing and Chase losing documents, etc. Chase granted us a trial modification.  After three payments on time, we called to see what their time frame was for converting it to perm.  They had our file in short sales.  They had the original purchase money contract in file, and assumed it was a short sale, even though the trial payments had been made on time.  .  Afer two - three months of losing more financial documentation, they had it back in collections, and sent a demand for the balance.  On the same day, they sent us a letter advising that we MAY be eligible for a mod.  Now we were six payments into the trial mod, all made as agreed and on time. 
On the seventh payment, Chase returned the payment, stating they wanted the full balance.  Again, after multiple attempts to straighten it out with Chase, they said to re-send the payment, and to make sure all of the payments were on time.  I asked them to PLEASE remove it from “Collections” status.  The next two trial payments we made were also returned, and we immedaitely sent them back, many calls to Chase.  Finally, we got someone who promised us that the payments would be accurately applied. 
Good thing we sent everything to Chase certified receipt, return requested.  Because they applied four more subsequent trial payments, all made on time, and then turned down our permanent mod, stating that the trial payments were not made as agreed. 
We made six payments AA until they started returning our payments, and have subsequently made six more payments, all on time with receipts.  Twelve total payments.  Now they say we have to appeal the “denial,” which we found out about through repeatedly trying to straighten it out.  They never sent a denial letter, yet continued to accept the partial payments.  Their basis for the denial was that we didn’t make the trial period payments.  When we got their account history, the payments they returned (and told us to make again) were never back dated to the date they were in fact received.  We have proof of the actual days they were received, but do you think Chase would have written in the account what happened?  No, they are putting the burden of proof on us to show the payments were all AA, which we can show, but how many more times will they lose them?  Will we have to make 24 trial payments?  Will they ever get the documentation right?  Homeowners at this point lose hope, and give up.  Not this one.
Lawsuits are being filed all over the country (http://mandelman.ml-implode.com/2010/06/hamp-it’s-a-real-class-action/)
Get involved!  The government will only protect the banks, not you.  The courts generally lean towards consumer-rights, so let’s sue the lenders!  Judges are less apt to bow to political pressure than our “lawmakers.”

As much as I loathe courtrooms, it would seem it is time for an aggressive law firm to start a class action suit against Chase and the other abusers. The have consistently lied to their borrowers, promised them the moon, then pulled the rug out from under them. Corporate officers should be fined, stripped of their wealth, and jailed for their dishonesty. They have promised help but have not delivered. And when they’re in trouble (because there’s not money to pay excessive bonuses,, they line up before a Congress that’s only too willing to fill their empty hands.

Lawsuits.  Class action.  There are 60,000 lawsuits around the country against banks and loan servicers.  Many of these lawsuits get pushed into FEDERAL Courts.  Hate to tell you but the Federal judges are NOT on the side of the American people.  They are on the side with the banks. I hate to tell you but this dragon is so big that I believe many Federal judges just don’t believe what is really happening to people or don’t understand that we are being bulldozed into foreclosure. If you do file a lawsuit and it’s sent to Federal court, it could drag out 6-7 yrs only to be dismissed over and over again.  Lawsuits alone won’t change things.  We NEED the media and our politicians.  We NEED laws changed.  We NEED someone to give a damn about middle America.  Keep speaking up - loudly. Meet with your legislators.  Let them know what is happening.  Write your Congressman and Senators over and over and over again until someone listens. Write the President weekly.  Use your anger as a positive force for reform.

I too would love to see some class actions all over the country.  In fact, we are starting to see just that.  A recent class action was filed in Texas.  There are lawsuits being filed, hopefully we will start seeing some precedence.

Unfortunately, most lawyers and judges do not understand the securitization process.  The holder of the note is most often times not the one who brings the suit.  When the homeowner attempts to explain this to the court via evidence demonstrating the MERS faulty assignments, the pooling of our loans and then sold on Wall Street, it gets so complicated the judges are just granting the banks the right to continue foreclosure.

The courts dockets are jam packed with foreclosure cases and rather than take the time to rule a case on the merits, judges are quick to go the easy route and give the banksters whatever they are asking for.

fight the fight.  Contact your state and local representatives.  Contact the President weekly.  there is power in numbers and we have a group trying to make a difference.  keep the middle class alive, please join beingmiddleclass.org and help us.

I am a Chase victim, too, and after 19 months of constantly fighting I got a permanent HAMP. Mind you this was after four denials, sending the documents over and over and over again, and complaining (with the data to back it up) to everyone I could think of. It has been like having a second full time job I still occasionally get a letter from chase telling me I may be eligible for a mod. WTF? Their left hand doesn’t know what their right hand is doing and for that matter the fingers on each hand are in their own universes.

Believe nothing these people say on the phone. Get it in writing and put it in writing. Send it certified mail, return receipt requested. Put that RR number on every page you send them (You can go to the post office and pick up the forms before you type your letter so you will have the number). Check out http://www.beingmiddleclass.org for contact numbers for your banks.

I too know people who were foreclosed on in the middle of mods - by Chase and others. One of my good friends just had a permanent mod yanked for bogus reasons. The banks are systematically attempting to destroy the middle class and the government - bless their pea pickin shallow hearts - is doing nothing to stop this. They worry about being elected. Well I for one want to ship them all of to an island with the Jamie Dimon’s of the world and let them have at it and Main Street can take over. No way could we do a worse job.

We need to keep fighting this. I have a mod, but have a second to deal with. But even when I make my final decision for myself I will be in this fight. There is too much at stake.

Sara Van Artsdalen

July 19, 2010, 7:11 p.m.

Suntrust Mortgage is right up with the others when it comes to being despicable and unresponsive. I called 2 or 3 times a week to check on the status of my loan mod and at one point a Suntrust employee told me “Suntrust really doesn’t want your property and especially in California”. I find that hard to believe since they still haven’t offered me a loan mod and I still have to call them 2-3 times a week for an update.

If your second mtg lender intends to charge off the loan, it means he’s declaring the debt as uncollectible. So, the lender will no longer collect payments from you. But this doesn’t mean that you don’t owe the money. The lender reports the debt as a loss when he files a Profit and Loss Statement (for his company) with the Internal Revenue Service. He sells off or assigns the debt to a collection agency that’ll collect the payments on his behalf. So, your debt hasn’t been canceled or forgiven.

When a second loan is charged off after a foreclosure/short sale on the property, the mortgage is considered as an unsecured debt since the collateral has been sold off already.
What happens after a second loan charge-off?

Regarding second mortgages: it is correct that a lien still exists on the property if the loan is charged-off. That is why it is worth trying to negotiate a settlement that includes the removal of the lien. If you have a second and it is not charged off, however, and they talk you into a modification, they can put you in a trial for four months, declare the loan to be a “performing” loan, sell it, and then still deny you the permanent mod. They have also tried to get me to combine my two loans. Not on your life guys. Then suddenly what was a non-recourse loan in CA becomes recourse!

Great information Barbara.  It is so important that homeowners arm themselves with knowledge.  The banks have.  We are learning from homeowners going through modifications, we are the middle class.  We represent 98% of the population in this Country and are fighting to return it where it belongs:  with the middle class.  Please join us.  beingmiddleclass.org

Paul, you are a true hero.  I cannot thank you enough for reporting this news and I look forward to your work.

Sara Van Artsdalen

July 20, 2010, 6:17 p.m.

Is a home equity loan considered the same thing as a second? I have my equity loan with the evil Citibank and I haven’t even started dealing with those idiots yet. It’s been a nightmare dealing with Suntrust the past year and I don’t look forward to starting the whole process with Citibank now.

Sara - a home equity loan is different. It’s not a purchase money loan (you didn’t use it to originally buy your property), so probaby recourse (they can come after you after foreclosure).If your house is worth less than your first, though, and if you are successful at modifying the first, Citi might settle or mod the HELOC. Anyhow there is alot to know and alot I don’t know. If you wish, pose your question on http://www.beingmiddleclass.org - maybe under the forum called “second mortgages” and you will probably get some more answers and maybe advice.

The home equity loan can become troubling depending on how you use the money. If it goes back into the property, they cant come after you. If it was used for other things like paying bills, that’s another proposition. Depending on your circumstances, you may want to consider bankruptcy. That’s a hard alternative, and it is certain to harm your lender, but after working with them for 18-24 months and determining they’ve never once made a good faith effort to work with you, it’s hard to feel sorry for them. The ones you need to feel sorry for are your creditors who’ll lose by your bankruptcy. Nobody, including our pretender administration, has figured out yet that we’re in a national financial crisis, and that the banks have made it happen.

Pastor Dave - loved your comment.  There are alternatives, to be sure, including bankruptcy, which we all consider. I feel sorry for alot of people in this mess, believe me. I feel the most sorry for the american main street and the nightmare that struggling homeowners have gone through in this mess. There is so much stress. So much stress and so little being done for us. It is disheartening, to be sure. It is our children and our childrens children who will really suffer, though, if those of us who can stand it do not keep on fighting.

June 2010 was the 16th month in a row where our nation had 300,000 or more victims lose their homes to foreclosure.  There will be many more, as the fallout of loan modifications continue. 
I see close up how the stress affects these homeowners.  I do volunteer work to help homeowners attempt to get loan modifications, and I see first hand how the banks make up their own rules, and ignore the HAMP guidelines.  It is criminal and yet, rather than prosecuting the millionaires who made money from the crisis, they continue to allow Chase and Wells to pay out huge bonuses to the CEOs who are riding the backs of the victims.  There is no accountability.
Yesterday, the President signed the bill which will alledgedly “reform” Wall Street, yet many of the provisions don’t take affect until years from now.  Extend and pretend, which has been the banks’ policy all along. 
For those of you who want to make a difference, write your congressional “leaders” now, and insist on Elizabeth Warren to head up the Consumer Protection Agency.  Do yourself a favor, and check out this interview she recently did with PBS.  It will give you hope. 
http://www.pbs.org/wnet/need-to-know/economy/the-next-foreclosure-crisis/2303/
Or maybe not.  The next crisis we face are all of the commercial mortgages coming due in the next 3-5 years.  Over half of them are under water.  The problem here is that most commercial mortgages are held by local and regional banks, not the big players like Chase and BofA.  As these mortgages become due, these small banks will implode, and will have to be merged with ..... you guessed it, the big boys.  Chase.  BA.  Wells.  How will they hide these bad commercial mortgages from their balance sheets, the way they are allowed to do now with their “toxic” residential mortgages? 
The governemt is allowing the banks to keep these toxic mortgages off of their balance shhets because, to accurately refelct their financial position would show just how insolvent the banks are. 

Listen to Elizabeth Warren.  She may be the only “real” person in Washington.  I’m going to write her in for President when we get rid of Obama.

Pastor Dave, I too like your comment.  We do have a pretender administration who seems to only care about corporate america.

It is not too difficult to know that if the housing market is stabilized, the rest of the economy will follow.

I hate that BK is an option, but it is.  A lot of people need to start working on a Plan B because the likelihood of the bank modifying your loan permanently is not very good.  I do not mean to discourage anyone from attempting a modification, just that my research has revealed that the numbers are dismal and it is always good to have that Plan B.

Love Elizabeth Warren! I have sent letters to Obama and my elected representatives and signed petitions,encouraging that they hire her. for the CFPB!

Lon, the latest concern is that commercial real estate is going to go the way of residential property. Unfortunately, most commercial real estate mortgages are held by smaller banks, and they could implode under the strain. If that happens, good old Chase, Wells Fargo, Bank of America, and 20 other mega banks will “pick up the pieces,” and just get bigger. You bet this pretender administration is responsible, and so is our pupped congress.

Pastor Dave - As a real estate investor for the last 16 years, a licensed realtor currently working in property management/leasing, I follow the market closely.  The commercial market slowly follows the resident market and it too will take a beating.  Soon. 

Most of the loans involved with commercial lending are conventional loans or are owned with no mortgage.  The value will most definitely decline, and it already has.  I posted something today from a website I have been following whose believes that BOA is selling of its servicing rights and will be insolvent in a short amount of time.

It is our administration of past who is responsible for the deregulation of the financial industry.  In my eyes, I don’t care which administration it is, it all leads back to the government, the same entity, if you will, who is responsible for preserving the stability of our economy and who have failed miserably.

I can only hope that middle class Americans are sick and tired of the way this country is being ran and will realize that we, middle class Americans, represent a majority interest, 98% of the US population and we will not allow the top 2% control any longer.

We could sure use your knowledge and compassion for this subject over at beingmiddleclass.org - I hope to see you there.

What’s happening with GMAC?-I keep hearing they are “better"t an the rest, but we have been trying to modify our loan—which was sold three times before GMAC took it over—for two and half years.

We have made payments based on verbal communication that were 27 cents over; checks were cashed, never told wrong amount, then told we were being foreclosed because we hadn’t technically made a payment, because the checks could not be applied since the amount was wrong.

We put $100,000.00 down and have made payments of at least $2,500.00 and usually more then $3,000. and at times $3,900 since we bought the house four years ago. Now, we are told that we owe more then a $100,000. more then original note or sell price! How can that be? They won;t send us details of our loan, despite repeated requests in writing.

We have worked with two different HOPE authorized groups, and in each case they made our situation worse and our loan payment went up, instead of down, even though our income had gone down . We keep being told that our income is too high for a mod-but not high enough just to refinance outright-even though with a 30 year fixed we would be paying the same amount as our original loan payment, but would have to stop going through this turmoil.

Can someone tell me why GMAC wants my house?

We send Certified letters, return receipt requested, but they will still claim to have not received or insist a document is missing or unsigned, even though I have copies, but how do you prove that? We just recently started recording all our phone conversations with the lenders—The first person I told I was recording said they could no longer speak to me-even though at times they say they may be recording my call-so now I don’t tell them, I just do it.
Every three months, without fail, the house goes back to foreclosure, then a new loan package arrives in the mail. I have to file a new mod app-I just do it myself, because the HOPE people are stupid and do little more then push paper and collect a fee and then go, “it’s out of my hands.”

People say to get an attorney, but I can’t afford it because all my money is going to my house payment, and stupid things like food and health insurance.

I wouldn’t know what attorney to trust anyway, since some of my co-workers her in the Los Angeles area gave attorneys thousands only to be left in the same situation.

It feels good to vent, but is anyone listening!

Eliza - there are more people than you know who are listening, and more people in this struggle than you could ever imagine. GMAC got TARP funds. They signed on to participate in the HAMP program. Although I cannot possibly say what for sure would work for you, I would start sending your letters to everyone you can think of. From your Senators and Congresspeople to the OCC, HUD, the media and SIGTARP. Here is the address for SIGTARP:
Office of the Special Inspector General for the Troubled Asset Relief Program
1500 Pennsylvania Avenue, NW Suite 1064
Washington, DC 20220

Here is proof that GMAC is a HAMP participant:
GMAC SIGNS ONTO HAMP
http://media.ally.com/index.php?s=43&item=316

If you want, come on over to http://www.beingmiddleclass.org. There is a thread with all sorts of contact numbers. I don’t think the GMAC contact numbers are there, but google it. Send your letter, if you haven’t already, to the president and VP et al of that company, and let them know you are also sending it to all of those people I mentioned and others.

Again, I dont’ know if this will get you your mod. But we have to scream incredibly loud and to lots of people and keep screaming because this assault on Main Street has got to stop!

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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