How to Negotiate a Modification

See how-to-negotiate-a-short-sale

See Michael Moore — Modifications

See Template-Lawsuit-STOP-foreclosure-TILA-Mortgage-Fraud-predatory-lending-Set-Aside-Illegal-Trustee-Sale-Civil-Rico-Etc Includes QUIET TITLE and MOST FEDERAL STATUTES — CALIFORNIA COMPLAINT

See how-to-buy-a-foreclosed-house-its-a-business-its-an-opportunity-its-a-risk

My statements here relate to general information and not legal advice. Generally we are of the opinion that the loan modification programs are a farce. First they end up in foreclosure in 6-7 months — more than 50-60% of the time. Then you have the problem that you signed new papers that will at least attempt to waive the rights and defenses you have now. A trial program is a trial program — it is not permanent. It is usually a smokescreen for the “lenders” (actually pretender lenders) to appear to comply with the federal mandate and thus collect the bonus from the Federal government for entering into a modification agreement. And let’s not forget that the entities with whom you would enter into this “new” agreement probably have no rights, ownership or authority over your mortgage — they are only pretending. Their game plan is that they have nothing to lose and everything to gain because they never advanced any money on the funding of your mortgage.

So the very first thing you want to do is ask for proof of real documents that can be reviewed by a forensic analyst which will demonstrate they have the power to change the terms, and assuming they can’t produce that, their agreement that any deal you enter into with them will be taken to court in a Quiet Title Action in which they will allow you to get a judgment that says you own the house free and clear except for whatever the new deal is with the new lender. The New Lender is necessary because the REAL Lender is quite gone and possibly unidentifiable.

Any failure to agree to such terms is a clear signal you are wasting your time and they are jockeying you into default, which is the only way they collect insurance on your mortgage through the credit default swaps purchased on the pool containing your mortgage. They actually make money if you default because they were allowed to buy insurance many times over on the same debt. So on your $300,000 mortgage they might actually receive (no joke) $9 million if you default. That means they have far more incentive to trick you into default than to REALLY modify your mortgage terms. and THAT means you need to be careful about what they are REALLY doing — a modification or deception. If it’s deception don’t fall into self deception and wish it weren’t so. Go after them with whatever you can. The law is on your side as to title, terms and predatory and fraudulent loan practices.

Your strategy is simple: (1) present a credible threat and (2) demonstrate that you have knowledgeable people (forensic analyst, expert witness, lawyer).

Your tactics are equally simple: (1) Present an expert declaration or affidavit that raises issues of fact regarding the representations of counsel or the pleadings of your opposition, (2) Pursue expedited discovery (ask for things that they should have had before they started the foreclosure process — a full accounting from the real creditor/lender, documentation showing chain of title/possession, documentation regarding the money that exchanged hands from the bond investor all the way down the securitization chain to the homeowner) and (3) ask for an evidentiary hearing on the factual issues.

It would probably be a good idea if you went through a local licensed attorney who really knows this stuff — like a graduate of Max Gardner’s seminars or a graduate of the Garfield Continuum. This attorney can create some credible threats like the fact that youa re claiming, under TILA, your right to undisclosed fees on your mortgage, including the SECOND yield spread premium paid in the securitization chain when the pool aggregator sold the “assets” to the SPV pool that sold bonds to investors — investors who were the the sole source of cash advanced to make this nightmare come true. Picking the right lawyer is critical. Anyone who has not studied securitization, anyone who has not been working hard in the area of foreclosure defense AND offense, should not be used because they simply don’t know enough to achieve a satisfactory result.

My rule of thumb is that I don’t like any modification unless it has the following attributes:

1. Forgiveness of all late fees, late payments etc. No tacking on fees, payments, interest or anything else to the end of the loan.
2. Removal of all negative comments from your credit rating.
3. Reduction of the principal due on your obligation in the form of a new note or an amendment executed by all relevant parties. The amount of the reduction should be no less than 30%, probably no more than 75% and should average across the board something like 40%-60%. So if your mortgage was $300,000 your reduction should be between $90,000 (leaving you with a $210,000 obligation) and $225,000 (leaving you with a $75,000 obligation).
a. How do you know what to ask for? First step is on the appraisal. Had you known that the appraisal used in your deal was unsustainable, you probably would have taken a different attitude toward the deal and would have insisted on other terms. Assuming you had a zero-down mortgage loan(s) [i.e., including 1st and 2nd mortgage] then you probably, on average have spent some $15,000-$20,000 in household improvements that cannot be recouped, but which were also spent based upon the apparent value of the house.
b. So you look at the current appraisal and let’s say in your community the actual sales prices of homes closest to you are down by 50% from what they were in 2007 or when you went to the “closing” on your loan.
(1) Write down the purchase price of your home or the original appraisal when you closed the “loan.”
(2) Deduct the Decline in Appraised Value, which in our example is a decline of 50%. If you had a zero down payment loan, this would translate as the original amount of the note minus the 50% $150,000-$160,000) reduction in value. This leaves $140,000-$150,000.
(3) Deduct the $15,000-$20,000 you spent on household improvements. This leaves $120,000 to $135,000.
(4) Deduct your attorney’s fees which will probably be around $15,000, hopefully on contingency at least in part. This leaves $105,000 to $120,000.
(5) Deduct any other related expenses such as the cost of a forensic audit (which INCLUDES TILA, RESPA, Securities, Title, Appraisal, Chain of Possession, and other factors like fabrication and forgery) that should cost around $2500, and any expense incurred retaining an expert to prepare and execute an expert declaration or expert affidavit that should cost around $1000-$1500. [Caution a declaration from someone who has no idea what is in the document, or who has very little exposure to discovery, depositions, court testimony etc. could be less than worthless. Your credibility will be diminished unless you pick the right forensic analyst and the right expert]. This leaves a balance of $101,000 to $116,000.
(6) If you did make a down payment or cash payments for “non-standard” options then you should deduct that too. So if you made a 20% down payment ($60,000, in our example) that would be a deduction too so you can recover that loss which resulted from the false appraisal and false presentation of the appraisal by the “lender” who was paid undisclosed fees to lie to you. In our example here I am going to assume you have a zero down payment. But if we used the example in this paragraph there would be an additional $60,000 deduction that could reduce your initial demand for modification to a principal reduction of $40,000.
(7) So your opening demand should be a note with a principal balance of $101,000 with a settlement probably no higher than $150,000. I would recommend a 15 year fixed rate mortgage because you will be done with it a lot sooner and convert you from debt to wealth. But a mortgage of up to 40 years is acceptable in order to keep your payments to a minimum if that is a critical issue.
4. Interest rate of 3%-4% FIXED.
5. Judge’s execution of final judgment ratifying the deal and quieting title against he world except for you as the owner of the property and the new lender who might have a new note and a new mortgage or who might just walk away completely when you present these terms. There are tens of thousands of homes in a grey area where they have not made a payment in years, the “lender” has not foreclosed, or the “lender” initiated foreclosure and then abandoned it. These people should be filing quiet title actions of their own and finish the job of getting the home free and clear from an encumbrance procured by fraud.

If you want to “up the stakes” then add the damages and rebates recoverable for TILA violations for predatory lending, undisclosed fees etc. That will ordinarily take you into negative territory where the “lender” owes you money and not vica versa. In that case your lawyer woudl write a demand letter for damages instead of an offer of modification. The other thing here is the typical demand for your current financial information. My position would be that this modification or settlement is not based upon NEED but rather, it is based upon LENDER LIABILITY. And if they are asking for proof of your financial condition on a SISA (stated income, stated asset) or NINJA (No Income, No Job, NO Assets) loan then the mere request for financial information is a request for modification. That triggers your unconditional right to ask “who are you and why are you the entity that is attempting to modify or settle this claim?”

By the way the “rule of thumb” came from the old common law doctrine that one could beat his wife and children with a stick no greater in diameter than the size of your thumb. In this case don’t let my use of the “rule of thumb” restrain you from using a bigger stick.

Neil F. Garfield, Esq.
ngarfield@msn.com

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49 Responses

  1. Although I have an attorney, he recommends I sign the loan modification agrmt (which carries a deadline that is ticking as I write), then we can sue them later. I do not see how I could get worse advise.

    This is my third attorney, he this one has prevailed in the past in NJ for homeowners however I have actually not spoken to him since the day I retained his services. I speak with a paralegal who, when I reported that the modification papers had arrived, said “have you signed them yet?” The attorney feels no need to read them but I sent them via email today anyway. Since last week’s email to them went unanswered, I’m feeling he may not answer this one either.

    The judge ordered us into mediation, and here I am.

    To protect myself I hired a forensic expert about a year ago to prepare a report. He is well-known and respected, charges a $1500 fee and I have no report. The day we met and spoke, he assured me “they have broken so many laws …” that he was certain they would settle the matter.

    The loan modification solidifies lender?’s hold on my property, where I remain. We had a conference scheduled with the Judge last month but pltf canceled, informing her honor that we had reached a settlement agreement. (They have been extremely shy of a conference throughout these proceedings, wriggling out when scheduled.) I have 2 days, maybe a bit more, but I am considering requesting a conference with the Judge..

    Thanks. I’ve come here since December 08, and this site has provided me with the information that let me anticipate their next moves on my house. In my opinion, this is a strong case. I have done my homework but live in a sea of disinterest.

    Anybody have a suggestion?

  2. Been in foreclosure since 1/2008. Was not in default at time, but pltf has refused to accept payment for the past 28 months. Although I have an attorney, he recommends I sign the loan modification agrmt (which carries a deadline that is ticking as I write), then we can sue them later. I do not see how I could get worse advise.

    This is my third attorney, he this one has prevailed in the past in NJ for homeowners however I have actually not spoken to him since the day I retained his services. I speak with a paralegal who, when I reported that the modification papers had arrived, said “have you signed them yet?” The attorney feels no need to read them but I sent them via email today anyway. Since last week’s email to them went unanswered, I’m feeling he may not answer this one either.

    Except for one Answer (pltf has filed and withdrawn complaints 5 times to create the “default”) I have done all of the work pro se. The judge ordered us into mediation, and here I am.

    To protect myself I hired a forensic expert about a year ago to prepare a report. He is well-known and respected, charges a $1500 fee and I have no report. The day we met and spoke, he assured me “they have broken so many laws …” that he was certain they would settle the matter.

    The loan modification solidifies lender?’s hold on my property, where I remain. We had a conference scheduled with the Judge last month but pltf canceled, informing her honor that we had reached a settlement agreement. (They have been extremely shy of a conference throughout these proceedings, wriggling out when scheduled.) I have 2 days, maybe a bit more, but I am considering requesting the conference with the Judge.

    Thanks. I’ve come here since December 08, and this site has provided me with the information that let me anticipate their next moves on my house. In my opinion, this is a strong case. I have done my homework but live in a sea of disinterest.

    Anybody have a suggestion?

  3. Mortgage Wars by Iris Martin is available at Barnes and Noble for 15.95 I got mine months ago in 48 hrs from time of ordering. I read this book prior to finding this site. I found her book to be helpful in making the general consumer get and idea of what is happening. Of course Livinglies is the best source right now and most up to date on this fight. Mortgage Wars was written earlier this year and things are changing so quickly in this fight some may not find as hepful as they had hoped.
    She does have a killer QWR in the book.!

  4. OK, guys, I need to apologize. I went down to the record room today with my attorney’s paralegal and we both looked at the records. Well, I read the chronology wrong. When we refinanced, we did so with a company that recorded their mortgage BEFORE the previous company recorded their discharge.

    I feel like a total turd so feel free to stone me. On the other hand, we ‘re not giving up the fight, so leave something for the dogs.

  5. You’re kidding, right …

    Here is what will happen (if you are in a non-judicial state: You will receive a Notice of Default. This will be followed by a Substitution of Trustee a couple of weeks later. About 6 weeks or so after the Notice of Default an assignment will be recorded.

    If you are in a judicial state, I believe that they would file a lawsuit first and at some point after this they would record an assignment.

    At any point from here on they could determine that the mortgage was not recorded and record it. Once any of this is done you will lose out on the significant advantage you have over nearly everyone else on this site.

    In addition, you want to talk to a knowledgeable attorney to determine if there is any other course of action you can take to get something recorded. For instance, you may be able to create a living trust and move the property into the trust. I have no idea if that would mean anything, which is why you really should talk to an attorney today. Another idea: you may be able to sell it to a business or corporation (your own? your spouse? your children? your parents?) – again I have no idea what this would do (if anything) but if title changes, this could be very problematic.

    What if you sold it to an investor and rented it back (or did a lease with an option to buy)?

    None of this means you don’t owe the money, it just means that if you are in a “first to record state” (or whatever it is called), any alleged lender would (opinion) lose the security interest and only be left with the (alleged) note.

    Find out about title litigation insurance – or perhaps purchase new title insurance (especially if you sell or transfer the property).

    Disclaimer: I am not an attorney and this is not legal advice. This is for educational and informational purposes only. Always consult with an attorney.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  6. Can’t sell, market’s in the tank. Would like to negotiate *something* cause I wanna pay my bills, but don’t wanna get trapped.

  7. Mario,
    RE: Iris Martin
    from Huffpo:

    Well I am very happy that the book has done great progress, I have not heard nothing for quite some time, well I am not a sports fan so, this could be why I did not hear.

    Many of my friends read the book and said it was very well done and offered a lot of muscle to fight the bankster, surely all the homeowners need major help, and as much as they can get, nothing beats the written word done by someone who has done it before. I wish everyone good luck.

    We are all in this fight together, and after all this time I find myself alone in the mess I am in. So cheers what, else can I say.

  8. Mario,
    RE: Iris Martin
    from Huffpo:
    Homeowners across the nation have locked and loaded and are launching their mortgage wars. Sales of my new book, Mortgage Wars: How to Fight Fraud and Reverse Foreclosure are thriving among homeowners and attorneys alike. We have even taken over the airways, advertising the book on Monday night football! The book was requested for sale at the annual conference of the California Bar Association.

    X_http://www.huffingtonpost.com/iris-martin/homeowners-the-war-games_b_282889.html

  9. angry & NOT TAKING IT!,
    I just read your post again, last time I was in a hurry and didn’t get what you were saying fully.

    You said:

    “neil
    its worth noting here..
    if the servicer’s motivation of recouping funds advanced – the loan payments [not made by borrower] advanced [paid] by the servicer, default fees.attorney fees,inspection fees,bpo fees, foreclosure fees that are averaging -$40k, are not paid back to servicer until the property is liquidated !
    i dont know how this is handled if a loan mod [trial or final ] is completed.
    food for thought on a SERVICERS motivation of why or why not modify the loan.
    what smokescreen ?!”

    I hadn’t thought about these issues from a loan modification perspective. But I will say that this appears to be why they ALWAYS want a forebearance done FIRST – it pays them back for probably most of their expenses. Remember also that according to the pooling and servicing agreement, these guys get to ALWAYS pass on these fees to the trust (and of course this means they are passed on to the investors). So, when they advance the funds, I am sure they are deducting these fees as they occur. I guess it is possible that they hold out and take them out later, but I doubt they do that. I would assume that if a trial modification is done (and no forbearance), the terms would be similar to a forbearance. The servicers are playing games with their ability to stand between the borrower and the “lender”.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  10. Mortgage Auditor,
    What note? Where is it, who owns it, and how did they get it? I disagree. Using the arguments on this site, if the house was sold, they could not pull all of the judicial or non-judicial garbage they normally pull. It does not stop them from sueing, but there would be NO SECURITY. They would have to prove in court ALL of the issues raised on this site. With a title report and the home sold (WITH title insurance), any pretender lender through securitization would be hard pressed to prove this in court. You have a lot of defenses also – rescission, fraud, bailouts, advances, etc., etc. I would probably have an audit done while I sent a QWR, followed by a rescission letter followed by a SALE. But before even all of that I would probably hire a very good real estate attorney from this list to handle the case so it is done properly.

    I am not an attorney and this is not legal advice. This is what I would do if this were my situation.

    And you heard from Neil first – “sell the house”

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  11. mortgage auditor,

    are you good at what you do?

    I never had a loan audit done on my loan yet. are you here looking for some business?

    did anyone check you out yet?

    the bar does not take lightly to operators working for borrowers, they closed down Iris Martin, did you know this? …yep they did, she was so spooked.

    but I hate the bar anyways. I like to fight them too. I fight everybody in this, the borrowers world of home ownership .

    Iris Martin, she wrote a book , I believe she shelved it, in the end, as a result of the bar, not sure.

  12. Mortgage Auditor,

    what note? Kyle. yancy there is no mortgage on the public record.

    Kyle. yancy could be mistaken, but I have seen almost everything, this will be no surprise, but if so there is no money owed, and the house that is empty in the same area is worth less than half of the subject house.

    BOA bought Countrywide, and countrywide was known to have things like this happen all the time.

    I recall countrywide foreclosing on the wrong house once, while the owner was on vacation and not in default.

    But houses are not selling.

    Gosh i wish there was no mtge on my public record, but then I would have no fight to enjoy. LOL

  13. “Why would you negotiate when you don’t have a loan?”

    There is a difference between not having a recorded mortgage and not having a loan. He has a loan as evidenced by the note he signed.

  14. LOL Dan

  15. Why would you negotiate when you don’t have a loan?

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  16. OK, BUT, I’m currently trying to work a loan mod with BofA. How will that screw things up?

  17. Get a title report from a title company TODAY to confirm.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  18. You’re joking, right?

    You have NO mortgage recorded on your property? I am not an attorney but I believe if you sell your house (right NOW and FAST) you will put the lender in a WORLD OF HURT. Recordings are usually (but not always) a “first to record” right. I don’t remember what it is called exactly, I made that up from memory.

    I am not a lawyer and this is not legal advice.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  19. Wow LoL no mtge, sweet

  20. kyle.yancy: sell the house

  21. Mortgage Auditor,

    Sorry my choice of adjectives could have been better.
    Lawyer never said anything like “deep fry”, that was
    my creative writing attempt.

    I’ll consider Neil’s adjectives for future posts, like the
    “roach” metaphor.

  22. HOLY CRAPNITZ!!!

    I just found out that the mortgage I refinanced in 2006 has YET to be recorded at the County Clerk’s Office!

    What do I do now?

  23. Hoard cash and stay tight. Accumulate reserves and retire your traditional moral values. What used to be right is no longer, and what was wrong will soon become the norm.

  24. First Dubai has to unravel, Goldman has to split up, and downsize, the squatters will occupy and plunder the empty homes, en mass. The whole situation will implode, then the judges will begin to understand, what they have to do. The banks will become powerless, the government will have to feed millions of people. This will be the worst depression ever seen in our lifetime, and its gonna last a long time. so take it slow.

  25. Do any of you really feel that you are going any where fast? the fasted operators here are the banksters they so far have won most of the battles.

    Its a slow race to the finish and the race can go in any direction. The economy is just about to totally crash. Just chill out.

  26. Personally, I am always leery of people who claim to DEEP FRY their opponent, because that rarely happens regardless of what side you are on. And when an attorney makes such a claim it needs to be viewed as self promotion more than anything else.

  27. Mortgage Auditor,

    I agree it will be a difficult time using 2923.6. But I hope that times are changing. I still would like to know if any one knows of any other judges of ANY jurisdiction in California ruling on this statute.

    I do know of a SF attorney who claims to be using it to gain access to evidentiary hearings and then he DEEP FRYS the “Pretenders”.

  28. Deontos,

    I was already aware of the case you cite to, and my only comment is that until a high court rules on this issue, servicers will interpret the code to suit their own interests and you will have a difficult time predicating a case on this theory.

    This, of course, is just my opinion based on my review of recent opinions and judicial comments addressing the topic.

  29. Mortgage Auditor,

    In response to my LOAN MODIFICATION post regarding, “…. California Civil Code 2923.6, a servicer is mandated to accept a loan modification……”

    X_http://livinglies.wordpress.com/2009/12/02/how-to-negotiate-a-modification/#comment-31103

    In your post:
    X_http://livinglies.wordpress.com/2009/12/02/how-to-negotiate-a-modification/#comment-31518
    You state:
    “This statute(2923.6) has no teeth as evidenced by a recent ruling in
    ORTIZ v. ACCREDITED HOME LENDERS.”

    It appears this judge doesn’t see it that way. Admittedly this decision is on appeal. BUT THIS JUDGE SEES TEETH.

    Are there perhaps other cases of record in local jurisdictions of a similar conclusion that need to be brought to light of day?

    Comments?

    ==================================================

    X_ http://www.doanlaw.com/blog/wp-content/uploads/2009/04/40609nicoletti.pdf

    SUPERIOR COURT OF THE STATE OF CALIFORNIA
    FOR THE COUNTY OF VENTURA
    COURTROOM 41
    HON. FRED BYSSHE

    GEORGE NICOLETTI, )
    )
    Plaintiff, )
    )
    vs. ) No. 56-2008-00333790
    ) CU-OR-VTA
    METROCITIES MORTGAGE, )
    )
    Defendant. )
    )
    REPORTER’S TRANSCRIPT OF PROCEEDINGS

    THE COURT: Well, at this juncture in this
    12 case the Court holds that section 2923.6 was the
    13 legislature’s attempt to deal with a collapsing
    14 mortgage industry, and also to stabilize the market.
    15 And the Court’s ruling is to overrule the
    16 demurrer. Require the defendant to file an answer on
    17 or before April 27, 2009. And at this juncture with
    18 regard to the defendant’s request to set aside the
    19 Lis Pendens, that request is denied without
    20 prejudice.

  30. How many of you have seen modification agreements executed and signed by an authorized officer of the lender and thereafter returned to the borrower?

  31. Re: http://livinglies.wordpress.com/2009/12/02/how-to-negotiate-a-modification/#comment-31103
    ______________________________________________
    Deontos:

    You say:

    Under California Civil Code 2923.6, a servicer is mandated to accept a loan modification offer if the net present value of the new terms are more than it would recover by foreclosure!

    Unfortunately you are mistaken in your interpretation of the code. It was recently held that the servicer merely has to make an attempt to negotiate with a borrower.

    Furthermore, it has not been determined if a borrower has a private right of action against the servicer.

    This statute has no teeth as evidenced by a recent ruling in
    ORTIZ v. ACCREDITED HOME LENDERS.

    The UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA held:

    “Cal. Civ. Code § 2923.5 requires a mortgagee, beneficiary or authorized agent to contact the borrower in person or by telephone in order to assess the bor-rower’s financial situation and explore options for the borrower to avoid foreclosure. For a lender which has recorded a notice of default prior to the effective date of the statute, § 2923.5(c) imposes a duty to attempt to negotiate with a borrower before recording a notice of sale. Those provisions cover loans initiated between January 1, 2003 and December 31, 2007.”

    “Cal. Civ. Code § 2923.5 does not require a lender to actually modify a defaulting borrower’s loan but rather requires only contacts or attempted contacts in a good faith effort to prevent foreclosure. Cal. Civ. Code § 2923.5(a)(2).”

    “While the United States Court of Appeals for the Ninth Circuit has yet to address the issue of whether Cal. Civ. Code § 2923.5 provides for a private right of action, the United States District Court for the Southern District of California has found no decision from the circuit where a § 2923.5 claim had been dismissed on that basis.”

  32. [...] You start negotiating with the “bank” or the REO with a demand for proof of title. See how-to-negotiate-a-modification [...]

  33. got a negative amortization ARM,
    Nothing new under the sun. They will walk all over you. Do what they want or buck the system and try to use the courts to achieve your goals. They will only cave when pushed against the wall.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  34. [...] see how-to-negotiate-a-modification [...]

  35. Deontos / Kara,
    I will probably be bringing it up but I doubt it will work. They have an escape clause – it has to be viable contractually for them. They will probably fight this. But, generally, I see the issue as a big one – especially with the decision in NY where the judge “gave” them the house. We need to argue “Unclean Hands” (among other things). Not necessarily to get the house free and clear, but to force them into a decent loan modification.

    Here is what happened in my case:
    I stopped my first sale by declaring bankruptcy (13), then they set another date (after the 13 was dismissed) and I declared bankruptcy again (7). But the day AFTER I filed bankruptcy, they actually sold my house. They didn’t go through with it because of the bankruptcy, but my lawyer found it on priorityposting’s web site. My initial loan was $500,000 and I currently owe $485,000 (approx) plus something like $78,000 past due. In bankruptcy I listed the property at $250,000, which is close to what I think it is worth. When I found my loan level files and the certificateholder statements it showed that in July of 2009 they did a BPO (Brokers Price Opinion) – probably from a drive by. The BPO value was $230,000. Surprise surprise, my house sold for $230,000 on August 7, 2009 at the invalidated foreclosure sale. What I find extremely interesting is that I sent in LOTS of letters – QWRs, debt dispute letters and an objection to Notice of Default, etc – to EVERYONE and on all letters I had Notice to (whoever) is Notice to (whoever) so that EVERYONE in the world received notices of my letters. In every single one I offered a loan mod of $275,000 with a 7.2% fixed 30 year loan. If you figure it will cost them $50,000 to do the foreclosure and the sales price was $230,000, my offer was $95,000 HIGHER from what they would gain in foreclosure. WHAT IN THE WORLD ARE THESE GUYS THINKING ABOUT? They do NOT want to do a loan modification unless they are absolutely forced into it.

    As far as servicer advances, I know that in foreclosure it makes NO DIFFERENCE to the servicers and trustees. They get paid FIRST from the proceeds of the foreclosure sale – before giving whatever is left to the trust (and investors). In a loan mod I don’t know how it works but I do know that they offered me a forbearance (way back when I was first behind). 3 normal pmts and 1 pmt of $29,000. They wanted ALL of their advances covered BEFORE they would even consider a loan modification.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  36. Kara,

    I was really hoping some of the stellar minds here
    would find this an interesting avenue to discuss.
    Or, alternatively would say “been there, done that”
    and it don’t work.

    I might re-post it. This could be a way to escape the
    “jurisdiction” quandary and take the fight to the
    “Pretenders”.

  37. Here’s my dilemma: I want to take an aggressive stance like this but my lender (IndyMac/OneWest) loan mod rep claims the following.

    Q: What should I do? I appreciate any constructive feedback! :)

    “There isn’t a person to speak with. Everything is done systemically according to your income. It will be explained in the information once you complete the trial plan.

    1. The final mod is prepared in our loss mitigation group, I am a member of that department.
    2. It is done through an automated process and is not done through manual calculation.
    3. There is no negotiation to this process a modification, if offered, is what we offer.”

  38. Deontos,

    Let me know if anyone answers you on that as that is how I see it too, however they would be making more to foreclose wouldn’t they- in the scheme of things? But then they will be exposed as to how. Thoughts?

  39. California Dreaming? Can I hear thoughts from California litigants on this: (This may be my only chance if I can somehow get them to court.)

    Under California Civil Code 2923.6, a servicer is mandated to accept a loan modification offer if the net present value of the new terms are more than it would recover by foreclosure! ** (See subsection 2, below)

    Here’s the statute:

    The Legislature finds and declares that any duty servicers may have to maximize net present value under their pooling and servicing agreements is owed to all parties in a loan pool, not to any particular parties, and that a servicer acts in the best interests of all parties if it agrees to or implements a loan modification or workout plan for which both of the following apply:
    (1) The loan is in payment default, or payment default is reasonably foreseeable.
    (2) Anticipated recovery under the loan modification or workout plan exceeds the anticipated recovery through foreclosure on a net present value basis.
    (b) It is the intent of the Legislature that the mortgagee, beneficiary, or authorized agent offer the borrower a loan modification or workout plan if such a modification or plan is consistent with its contractual or other authority…

    What it means: if your finances don’t add up, YOU HAVE A RIGHT TO NEGOTIATE A MODIFICATION WITH YOUR BANK UNDER WHICH THE BANK NETS MORE THAN IT WOULD BY FORECLOSURE. PERIOD. IF THE BANK DOES NOT COMPLY WITH ITS LEGALLY BOUND DUTY, WE CAN BLOCK THEM FROM ATTEMPTING TO FORECLOSE BY FILING A NOTICE OF NON-COMPLIANCE WITH THE COUNTY RECORDER AND FORCING A JUDICIAL PROCEEDING. WE TURN THE NON-JUDICIAL FORECLOSURE INTO A COURT-OVERSEEN LEGAL PROCEEDING, in which the bank must prove all of the necessary facts to establish their right to collect. Often, the banks do not have the evidence because it was lost in the Wall Street madness surrounding these loans.

  40. Wow, this is fantastic info, thank you so much for sharing. It seems the banks are resisting loan modifications and I was wondering why they would prefer to foreclose. But your comment about the insurance now seems to make things clearer. Thanks!

  41. [...] to Negotiate a Short-Sale Posted on December 2, 2009 by livinglies see how-to-negotiate-a-modification My statements here relate to general information and not legal advice. Generally we the vast [...]

  42. Has anyone heard of Forida courts now madating mediation? It appears that these mandatory” mediations benefit the lender and their ability to hinder discovery of who the rel owner is. The mediation sems to focus more on the Borrower submittng financial documents etc… Any recommendations on this? If the borrower does not cooperate it could be damaging.

  43. Neil has a way of saying exactly what I feel and I am so happy you are here, believe me I am your hero, even if you do not know it, or believe it. I am kicking butt here baby.

    The banksters do not even wish to speak to me at the moment. I am going after the lawyers in my auto repo case and boy its such fun.

  44. Hey Libra 99, I know how you feel.

    It sucks having taken the red pill.

  45. Another classic

  46. neil
    its worth noting here..
    if the servicer’s motivation of recouping funds advanced – the loan payments [not made by borrower] advanced [paid] by the servicer, default fees.attorney fees,inspection fees,bpo fees, foreclosure fees that are averaging -$40k, are not paid back to servicer until the property is liquidated !
    i dont know how this is handled if a loan mod [trial or final ] is completed.
    food for thought on a SERVICERS motivation of why or why not modify the loan.
    what smokescreen ?!

  47. Sometimes I almost wish I’d never known the real dirty truth behind what really goes on with the banks and foreclosures. I’ve seen so many people, myself included, go through the living hell of losing their homes and pretty much everything they have, and basically having their lives destroyed. Knowing the real truth behind why that happened is at times unbearable. Add to that the fact that our future as a nation is very bleak at best, knowing full well we’ve all been sold down the river by the powers that be.

  48. Hi Neil,

    Is there a lien attached to the money from the savings and loan bailouts? Do we need a lien release from the FDIC? Who can provide that lien release if it’s not the FDIC. If the REAL documents can not be produced, then why hasn’t someone filled a quiet title action?

    Thanks,
    Heather

  49. Thank you Mr. Garfield. This information came “just-in-time” for me

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