January 22nd, 2009
Attorney at Law Malik Ahmad [Malik Ahmad is a Nevada licnesed attorney and admitted to practice in Supreme Court of Nevada]
Today, we are going to address lots of myths associated with loan modification process. Most of this myth and mysteries are floated and propagated by scam loan artists, and inexperienced people. For instance, there is a lots of myth surrounding the whole lending process and services associated with lenders, new regulations, rate of interest, whether you would not have to pay back the HELOC loan, whether you really have to be delinquent. I had made a list of all of these and in this short article would address all those issues one by one. Again, like I said, most of these myths are fueled by uninformed and confused people who are here to make a quick buck. In my office, I got lots of calls from this loan modification expert who are plying their trade to get a legal umbrella. You know what, I politely deny it.
First Myth:
We have done a lot of loans modification.
If someone claims that, he is telling a blatant lies. If they had tonnes of loan modification, how come we are in this crisis? The banks had a liquidity crisis, the credit was not enhanced, banks were losing money left and right, and if these claims are accepted, we would not be in this crisis at this time. They are all blatant lies. Congress just passed Housing Assistance Bill, and loan modification just started, how come these artists had made hundreds of loan modification? This is simply not possible.
The purpose of this article and more on my webpage and in my blogs is just to educate people. Education is the key to the whole process. First, if you are educated, then you would start trusting and that is the cornerstone of any business.
Second Myth:
Does one have to be delinquent on his/her mortgage payments?
Not True: Probably, your economic hardship letter may draw more attention, but other than it is not a crucial all important fact. Sometime, lender would ask questions about delinquency and why they happened. Overall, it may have some weight age, but not a whole lot.
The whole loan modification process is long, cumbersome and tedious. It requires lots of patience. Just few phone calls are not enough. One has to do lots of works. When attorneys are associated, things start moving fast. Phone calls are returned, letters are answered.
Does your Modification Plan Needs Forensic Evidence?
I laugh when I get calls from this scam artist about forensic evidence. This is the so called audit these companies do under the guise of forensic evidence. Okay, if you had found a violation, then who is going to sue? Only an attorney can sue, and he needs to find his own independent reasons. Remembers attorney can be sued for malpractice, if they have not done a due diligence of their own work and sued someone without any reason. Please be cautious when dealing with these so called forensic audit companies. Most of them are just ripping off people and making their lives more miserable. Most of the lawsuits, for instance with Countrywide had already been settled and most of the small mortgage companies had disappeared or under the bankruptcy process. So, even if they had violations, where you going to sue and the money come from. Remember, it is very expensive to sue and you had to find the right attorney for that purpose. Okay, not that I berate some of the good companies. Of course there is a whole laundry list of violations both under the Truth in Lending Laws as well as Real Estate Pratice Laws (RESPA). Hopefully, in my next session, I would give more details on all these kinds of violations. I am just briefly touching these violations here:
1. Whether all disclosures were provided you?
2. Whether an adjustable rate was given to you while you qualified based on your high FICO score for better terms?
3. Any falsification done in preparation of your loan documents.
4.Was you an unsophisticated buyer?
5. Did you receive Good Faith Estimate within 3 days of loan officers contacting you with a promise of a loan?
6. Did you receive HUD statement.
7. If you married, did your wife received separately a HUD and TILA as well as Good Faith Estimate separately, and did she sighn on each of the disclosures separately.
(More violations later.)
Now, coming back to the myths again:
Myth:
Lenders and servicers are offering principle reductions on borrowers whose mortgage balances are in the red and owe more than the home is worth.
Fact: This is possible, but not done on a regular basis. Most of the HELOCK loans can be knocked off, but not in every case. Some can be of course through a wiser a very technical application of Chapter 13. However, a wider use of this by the banks would destroy the leftover market and most of the banks would close their shops.
Myth:
Banks are still resisting the whole thing. Deep down in their heart and minds, they are not happy with the whole situation. The whole thing was started by them, and their so called help is not very straight forward. However, there is a tremendous change in their mode of action. They are working, and hired more people, and return your phone calls swiftly. This need to be handled on a professional basis.
Myth:
Bank would contact you very soon.
Don't trust it a bit. They would not. They are the thieves in the first place. You expect WAMU contacting you? You expect Countrywide contacting you? Come on give me a break!. Of course they had hired more people, most of who are still untrained, or semi trained. They pay them $10-12 dollar an hour. They are not professionals, they are just paper collector which you contact them after staying on the phone for about 45 minutes. They are irate most of the time. Banks had taken bailout money, and would not share with you. They had other plans. They want to shore up their own portfolious and would give you only pittance. Even if they give you loan modification and especially Countrywide, it is still based on some ARMS formula. I had seen it innumerable times sending me the same proposal which in the first place started the whole finacncial meltdown.
More Myths Later.
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