The Law Office of Carol A. Molloy

Tennessee Foreclosure Defense

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Government Forclosure Programs

15 October, 2010 (21:08) | Uncategorized | By: Carol

The Myth of Loan Mod’s Exposed (Neil Garfield’s Living Lies) 12/19/2009
“Kudos to investigative journalist Kevin Hall with McClatchy Newspapers for inserting himself into the so called “loan modification” process and exposing the farce that is being perpetrated on the American public in the article below. Why is this happening? Pretty simple, two reasons, first the fact is that in almost all cases where you have a mortgage that has been securitized, you the homeowner or you the lawyer representing the homeowner are not dealing with a party that has authority to modify the loan and second they NEED a default. One of the many missions of this site is exposing the truth, hence the name “Livinglies.” The reality is that they, the “pretender lender,” know the debt is unenforceable, the real party in interest is unidentifiable in most cases, and the title to the property has a cloud on it.

President Obama’s HAMP Program

I have many clients call my office to explain that they are eligible for the Home Affordable Mortgage Program (HAMP). It definitely is not the program that was sold to America that would help thousands of Americans. What it was (and I believe was designed for) is a stop gap measure to help stop the panic over the short term.  I am looking for any success stories, as I have yet to hear of any. If you have received a successful FINAL modification under the HAMP plan, i’d like to hear your story. Please contact me.

National Consumer Law Center has released a report explaining how mortgage servicers are compensated:

Why Servicers Foreclose When They Should Modify and Other Puzzles of Servicer Behavior

The basic format of the HAMP plan, is that you must jump through hoops providing the lender with everything but a blood sample. The borrower is then put on a three month trial payment plan (that usually is less than their regular mortgage payment).

The borrower is then told that they must maintain these trial payments for these three months, in order to potentially qualify for the final modification. Reading the HAMP modification application documents carefully you will see that it is completely up to the mortgage servicer to approve the final modification (as the servicer is the Investor’s lap dog).

I have many clients currently in this process. When the three month trial period expires, they are told to continue making these payments for two more months, because the servicer is finalizing the details of the final modification with the investor.

Many clients complain to me that when they try to contact their mortgage servicer (whom they mistakenly believe is their lender), they either cannot ever speak to a live person on the phone, or in the alternative even if they can speak to a live person on a regular basis, the information about the process seems to change with every call. I can personally attest to the problems contacting and dealing with mortgage servicers, because many is the day that I spend 3 hours on hold, only to end up talking to someone that had the intelligence of a radish.

It is my theory that none of the HAMP modifications will be approved in any meaningful way for borrowers to be able to afford their mortgage payments.

Much of the reason for this is that Mortgage Servicers are the tail wagging the dog. Servicers receive huge fees for servicing mortgages in foreclosure, and they do not want to abandon this gravy train. The securitized trust place the servicer and the trustee out in the public to field inquiries and do the dirty work, somewhat akin to the great OZ hiding behind the green curtain in the great emerald city. Additionally, evidence seems to be pointing to the fact that many of these securitized trusts have mortgage guarantee insurance that pays the trust in the event of borrower defauls.. So even though the trust has been paid ,the servicer still forecloses ,and quite possibly is keeping any proceeds from the foreclosure auctions.