Mirror of Justice

Reply To: Doing Bad Business

July 17th, 2009 at 02:53pm Under Business Law

Much of the dissatisfaction directed toward loan modifications and the companies that operate in that space comes from people that have been turned down for one. There are many factors that can derail the loan modification process:

1)      No hardship – The biggest requirement in determining eligibility for a loan modification is verifiable financial hardship. This hardship can come in many forms including upward mortgage rate adjustments, the loss of a job, being upside down in the house, etc. Where no hardship can be determined the loan modification will stop in its tracks. The one positive, for both client and company, is that the lack of hardship can usually be determined early on in the process, thus saving time money and effort.

2)      No income – This is part of walking the fine line between hardship and too much hardship. Lenders in general have tightened up on income levels considerably since the first half of 2008. The lenders’ wake-up call came in later in 2008 when a study showed that half of loans modified were back in default only six months later.

3)      Equity in the home – Lenders will typically back away from modifying a loan if there is equity in the house for a couple of reasons. The first one being that it’s much easier for the bank if the homeowner can get out whole by selling the house. The second reason is that should the bank need to foreclose the equity cushion could turn the foreclosure in to a profit for the bank once they resell the house.

4)      Pending bankruptcy – A deal killer for obvious reasons.

5)      Initiating the loan modification too late in the foreclosure process – There are rare examples where foreclosures are avoided at the 11th hour but don’t count on it. If the sheriff is scheduled to be knocking at the door at any moment a loan mod is extremely unlikely to happen.

6)       Being current on the mortgage – This is a controversial point with valid arguments from both sides. Some banks won’t look at a loan modification unless payments aren’t current, some will. This varies from lender to lender so if missing a payment does not sit well with you, getting that information ahead of time will take care of any surprises down the line.

7)      Lies, omissions, and inaccuracies – These factors are the ones that fall right in the lap of the applicant and will typically result in forfeiture of some, if not all of the loan mod fees. To compound the problem, these deal killers are usually found long after the initiation of the process costing valuable effort, time and money. Applicants sometimes forget that the loan mod is going to be done with their current lender who, in all likelihood, still has the original doc’s from the mortgage to be modified. Pleading hardship while forgetting to include the $2 million brokerage account from the original application generally makes people angry and will crush the loan mod immediately. For more information call 1-800-470-0865 or visit Feldman Law Center.

The information contained herein is provided for general information and advertising purposes only and is not intended to convey a legal option nor legal advice for any particular case or situation. Nothing in this article shall create an attorney-client relationship. Nothing sent to this law office via e-mail shall constitute an attorney-client relationship. Nothing contained in this article shall be construed to be a guarantee or prediction of result. Prior results are provided for general information purposes only and do not guarantee, warranty or predict a similar outcome with respect to any future matter.   Results achieved depend on individual circumstances and not everyone will qualify or be successful in restructuring their mortgage loan.

Feldman Law Center – The Four Road Blocks That are Slowing Loan Modifications

July 17th, 2009 at 04:38am Under Estates Law

Hope and optimism emanating from the announcement of the Obama Administration’s “Making Home Affordable” plan have been replaced by the cold reality that the program has gotten off to start deemed by industry watchers as “anemic”. After almost four months since President Obama first announced the $75 billion mortgage rescue effort, the administration continues to tweak the program in an attempt to reach its originally stated objective of saving up to 5 million homeowners from foreclosure. Standing between the anemic start and lofty goals of the program are four roadblocks:

1) Overloaded loan modification processors – While the specifics of the plan were released in the first week of March, lenders couldn’t start handling applications until systems were re-programmed and processors were brought up to speed, which took an additional four to six weeks. Processors were immediately buried with stacks of applications that had been accumulating during the conversion to the new guidelines. Participants in the process report that servicers are still digging out from the initial rush as applications continue to flood their desks. Troubled borrowers, many backed up against the possibility of foreclosure, have become increasingly frustrated to the point where they have abandoned the process to retain their own legal assistance.  JP Morgan Chase spokesman Tom Kelly recently said of the ramp-up, “It’s an enormous task. We’re moving quickly, although not as quickly as an individual might wish.”

2) Investors – The massive sums of money that supported the real estate/mortgage boom came from investors on Wall Street, pensions, and other institutions. Servicers say those investors are now balking at some of the terms being presented when a loan needs to be modified. The net present value test, a little known aspect of the plan, allows for a calculation to determine whether the greater return for investors will be achieved via modification or foreclosure. In the modification versus foreclosure decision, investors have been threatening lawsuits against servicers when the servicers are deemed to not be acting in the best interests of their investors. The threatened legal action adds another layer to the home loan modification process and can draw out the approval process even more. The “safe harbor” bill recently passed by Congress was intended to alleviate that logjam by protecting servicers from investor lawsuits but it’s likely that lawsuits will arrive on the servicers doorsteps anyway, safe harbor or not.

3) Lenders – Lenders are caught in a three sided bind between the above mentioned borrowers/investors and their own capital structure. No longer required to mark their loans to market, they can carry the value of the loans in their own portfolios at values they can rationalize, whether factual or not. Loan modifications could generate reviews of portfolio values, and nobody wants to go there in the current environment.

4) Unemployment – According to John Taylor, head of the National Community Reinvestment Coalition, “Unemployment is becoming a bigger factor than almost anything.” When sub-prime mortgages started blowing up it was attributed to the risks inherent in lending to lower quality borrowers. Increasing unemployment, in addition to taking down the lower quality borrowers, is now hitting prime mortgages. In fact, primes are now going into default at a much faster rate than sub-primes as previously solid borrowers are now being affected by the contracting economy.

Of the four roadblocks, the toughest barrier is unemployment due to the fact that, regardless of credit scores, if a homeowner doesn’t have a job a loan modification isn’t going to help. Short sales, cash for keys, or foreclosure become the next options. At that point every side of the three sided bind ends up on the losing end.

Feldman Law Center – Loan Modification – The Truth, The Whole Truth, And Nothing But The Truth!

July 15th, 2009 at 04:38pm Under Estates Law

 

Loan modification and stop foreclosure services should be provided by a reputable attorney and NOT a loan modification company that boasts “in house attorneys” or “attorney based”. Most so called Loan modification experts are misleading, giving home owners false promises and misrepresenting their services. We have seen many of these loan modification companies send home owners loan modification examples similar to the way they sold mortgages. Making statements and emailing examples with guaranteed or proposed principal reductions and charging up front fees as well as trying to collect monies at the close if they obtain a loan modification agreement. Honestly, these types of loan modification companies should be reported to the DRE and the Attorney General’s Office.

 

We have reviewed several loan modification agreements from loss mitigation companies offering to help stop foreclosure and found they all highly recommend you have “your attorney” review ALL documents including their contract before signing. Why would a borrower hire an attorney just to review a loan modification company’s agreement before signing? In addition, why would they then again hire an attorney to review the final loan modification agreement? The simple truth is, this is advised so you fully understand what you are signing. You must read the fine print and know how to interpret the agreement.

 

Why not just hire an attorney in the first place to negotiate with your lender and review ALL the documents as well as counsel you with a plan of action. Attorneys providing loan modification services and real estate negotiations are not as easy to find. The Feldman Law Center offers a flat fee for loan modification services that is much less than most loan modification companies. We have reviewed several loan modification service agreements from companies that charge up front fees and found them poor at best. DO NOT PAY UP FRONT FEES TO A LOAN MODIFICATION OR LOSS MITIGATION COMPANY THAT OFFERS STOP FORECLOSURE OR LOAN MODIFICATION SERVICES. THESE COMPANIES SEND THEIR FILES TO OUTSIDE LOAN PROCESSING COMPANIES PRAYING FOR A RESULT. OUR LOAN MODIFICATIONS TAKE 3 TO 6 WEEKS, NOT 3 TO 6 MONTHS!

 

Loan modification services should be provided from a Law Office that has experience negotiating with mortgage loan servicing companies for a multitude of reasons. The Feldman Law Center in California has long standing relationships and a sophisticated approach with all the major lenders and mortgage servicing companies and proven results. To see for yourself or for more information about loan modifications call us today or visit www.feldmanlawcenter.com .

Feldman Law Center – Feldman Law Center Acquires Former Lending Tree V.P. To Head Up Expansion

July 15th, 2009 at 02:52pm Under Business Law

The Feldman Law Center, a Law Firm that provides nationwide loan modification and debt relief services announced the recent acquisition of former Lending Tree Vice President Mr. Jerry Koller to head up their expansion. Mr. Koller brings us a wealth of knowledge, says Mr. Steven C.Feldman as Koller has worked for Mr. Anthony Hsieh Former ETRADE Financial CEO who then founded HomeLoanCenter.com and sold it to Lending Tree in 2004 for an undisclosed sum. With over 20 years in the finance and mortgage industry Feldman feels the long awaited acquisition could not have come at a better time.

Feldman Law Center was one of the original loan modification attorneys providing loan modification services throughout the country and has grown at a record pace over the past year. Back in the day, homeowners facing foreclosure or immanent hardship due to interest rate adjustments didn’t know what a loan modification was and with the recent development of our Internal Management System Software and the acquisition of Mr. Koller we can structure our growth accordingly as to not adversely effect our day to day operation. The newly developed IMS system will improve the way we do business and allow us to process and negotiate over 5,000 loan modifications per month. Currently the Feldman Law Center manages a large case load and negotiates pools of loan modifications with the major loan servicers like Country Wide Home Loans, Chase and CITI Mortgage. The original staff of five has grown to over 65 in a year that most new nothing of loan modifications being used to stop foreclosure. The Law Offices occupies over 10,000 sq.’ in Mission Viejo, Ca. and is currently negotiating the lease of another 35,000 sq.’ in Irvine, Ca. Coincidently within a mile of the former Lending Tree campus Mr. Koller frequented. Feldman sees the rapid growth as the next “refi boom” and it should be smooth sailing with Koller aboard. “We couldn’t do it without a man of his caliber” says Feldman.

Mr. Koller went to every Loan Modification Company and Law Office that provides loan modification services in town before settling on the Feldman Law Center. When asked why Koller says, “He has the reputation and I want to work for the best”. When asked why loan modifications, Koller says “I like helping people and I miss the fast paced operations”.

Feldman Law Center – Foreclosures Overwhelming California Homeowners

July 11th, 2009 at 08:53pm Under Banking Law

Feldman Law Center – News by Feldman Law Center — Unfortunately, California homeowners are being overwhelmed by foreclosures, and many people feel there is no end in sight to the situation.  Legislation from California and the federal government has helped some people, but it is not enough.  Loan modification attorneys are working with people everyday who either do not have access to the right information, or who feel left to deal with lenders all by themselves.  While the legislation can be helpful, President Obama and the California legislature are not there to help make phone calls and negotiate loan modifications.Foreclosure sales in California rose about 32 percent in the month of May of 2009, and 35 percent in April of 2009.  Just the California foreclosures from the month of May represent more than $8 billion in total loan value.  That means $8 billion worth of homes were foreclosed upon.  However, the good news is that lenders continue to voluntarily postpone the majority of foreclosure sales.    Lenders, such as banks and mortgage companies, are doing everything possible to delay foreclosures, and that includes working with California loan modification attorneys and homeowners on loan modifications.In fact, of the foreclosures scheduled, lenders postponed 40 percent at their own request and another 33 percent at the mutual request of the lender and the borrower.  This means that lenders are absolutely willing to renegotiate the terms of mortgages, and homeowners who are in danger of (or are in the midst of) foreclosure proceedings still have hope.  Foreclosures often seem like the end of the world, and even with the new legislation, they can be overwhelming.  However, as evidenced by these statistics, lenders are not interested in taking over your home.  The Feldman Law Center has seen lenders take unique steps to negotiate with borrowers and homeowners in an attempt to keep the homeowner in their home, making affordable payments.Things are particularly tough for homeowners in southern California.  Researchers from Columbia Business School said that over 30 percent of borrowers in San Diego and San Bernardino counties owe more than the refinancing limit with Sallie Mae and Freddie Mac.  In Los Angeles county, there are 29 percent of borrowers who do not qualify for refinancing because of the less-than-5-percent restriction from those two major mortgage lenders.However, loan modification attorneys can help homeowners and borrowers overcome these restrictions.  Foreclosures seem to run up on people quicker than they think, in part because they are focusing on their immediate crisis (such as paying a car loan) and not the looming one of foreclosure.  However, it is never too late to contact a California loan modification attorney to help you keep your home and avoid foreclosure.  A qualified California loan modification attorney will know the laws, know the lenders, know the mortgage companies and be able to offer quality advice on a variety of subjects.  Trying to fight a foreclosure without a qualified loan modification attorney is a bad idea.Visit us at www.feldmanlawcenter.com or call 800-588-0425.

Feldman Law Center – Congress Modifies HOPE for Homeowners; CA Senate passes SB 94

July 11th, 2009 at 08:53am Under Banking Law

Feldman Law Center – News by Feldman Law Center — The U.S. Senate, as well as the California State Senate, are both at work to help homeowners avoid bankruptcy and foreclosure. The U.S. Senate and the California State Senate are also both at work to make lenders happy, balance budgets, and do any number of things that may or may not serve your best interests as a homeowner.What do you need to know? Why should you care? The Federal bill HOPE for Homeowners was passed in the summer of 2008 to help prevent foreclosures on the more than 400,000 homes that were facing it. In the first seven months that the law was enacted, the law helped exactly one family stay in their home. That’s right, one. Recently (May, 2009), Congress passed a bill that augments the original HOPE for Homeowners legislation to make it more effective. In April 2009, in California, State Bill 94 cleared the Senate Judiciary Committee and awaits approval by the Senate Appropriations Committee. State Bill 94 was proposed by Senator Calderon (D-Montebello) and was designed to crackdown on some of the dishonest, disreputable, and predatory firms that are popping up hoping to profit from the misfortune of others. The main focus of the bill is to prevent loan modification firms from requiring payment up front for their services.While it is possible to negotiate with the lender yourself or to hire a non-profit agencies, when it comes to staying in your home you should look for the most effective and efficient means possible. Hiring a loan modification attorney to help negotiate new terms on your loan can mean the difference between avoiding bankruptcy, foreclosure and a short sale and…not avoiding them. The important thing is that you are able to get out of your financial mess and stay in your home.Truth is, thousands of loan modifications are successfully negotiated by private sector firms in California and throughout the country. This is important to remember when considering your options. It would be foolish to trust someone who promises something they can’t deliver. It would also be foolish to ignore help from someone who is willing and able to assist. If you are drowning, and someone that has been standing on the bank pulling people out offers you a hand, shouldn’t you take it?We will continue to hear grumbling about the economy, and what “got us into this mess.” We will continue to hear proposed legislation to regulate, modify and change rules and regulations in the various industries directly linked to this financial crisis. And we will continue to hear pleas from senators, congressmen, banks, loan modification “experts,” and any number of people whose direct interests are involved. Think about what is best for you. Are you prepared to negotiate a loan modification directly with your lender? The Feldman Law Center is trustworthy, reputable, and ready to help you stay in your home. We specialize in loan modifications and have attorneys on staff who know the business. Call the Feldman Law Center today.Visit us at http://www.feldmanlawcenter.com or call 800-588-0425.

Resources:

Feldman Law Center: Profile – Business Exchange

Feldman Law Center – Loan Modification Video

Feldman Law Center – What Do Banks and Lenders Think of Loan Modifications?

July 11th, 2009 at 02:53am Under Banking Law

Feldman Law Center – News by Feldman Law CenterThe whole reason a loan modification becomes necessary is because the borrower needs the loan to be more manageable, so that he or she can continue to pay for it. The purpose of a loan modification is for the borrower, or someone on the borrower’s behalf, to negotiate a more feasible mortgage with the lender. At first glance, this deal seems like a good one for the borrower. And oftentimes it is. But what about the lender?

Because of the current financial crisis, many people are seeing loan modifications as a good deal. The negotiations are usually initiated by the borrowers, and allow them to keep their property, postpone payments, reduce or stabilize interest rates, and sometimes even get a better deal on the house they already live in. Their credit scores are not harmed like they would be by a foreclosure or bankruptcy. Most of all, they do not have to move from their houses, forcing upheaval on their families, during a time of financial hardship and stress.

Society seems to take the side of families and the personal stories broadcast on the nightly news shows. Stories about 50-year old, recently-laid off, single moms who can’t afford their mortgages tend to pull on people’s heartstrings, winning the allegiance of many members of the public. And since so many people are being affected by the mortgage crisis, public outcry seems to be against banks and lenders, who are being blamed for offering such ludicrous loans in the first place.

The government, and specifically groups such as the FDIC, are also increasingly supportive of loan modification programs. The FDIC has even built a “Mod in a Box” loan modification program guide, in order to encourage more and more lenders to offer loan modifications. Obama has plans that involve modifying home loans to keep families in their homes, and countless nonprofits and support groups seem to be cropping up to help people with distressed finances.

So, borrowers, the government, and society at large are supporting the numerous loan modification programs available. One still has to wonder what banks think about home loan modifications.

Although much less loudly proclaimed, many lenders are in support of home loan modifications too. Lenders’ motivations for modifying a loan can vary. If a home is sold in a short sale, the bank agrees to write off the amount the borrower still owes, sells the property, and takes a loss. Foreclosures are much the same. When a bank forecloses on a home, they often make less profit on the property than they would have made through a mortgage, even a mortgage modified through a loan modification. Simply put, banks have a business motivation to modify your loan: they stand to make more profit if you stay in your house. Not to mention the fact that loan modifications make them look better in the eyes of the community and the government, and could potentially help the world’s economy in the long run.

If you need a home loan modification, contact the attorneys of the Feldman Law Center. Consultations are free, and they can help you benefit from staying in your home.

Loan Modification Companies – Information For Consumers

July 10th, 2009 at 08:56pm Under Consumer Law

It’s like the “perfect storm” for ex- mortgage brokers and ex-cons alike. All of a sudden we have thousands of “loan modification experts” hitting the internet. The truth is these guys have absolutely no clue and no leverage with your lender. The best most of them can hope for is an unaffordable forbearance agreement or a loan mod under a government or FDIC backed program that you can probably do yourself. The truth is most of these struggling homeowners end up losing their home to foreclosure because they fell for some gimmicky website, a smooth talking ex- loan officer promising a super low interest rate, and a promise of principal reduction and no payments for 6 months or your money back ( minus a small processing fee of course). At the end of the day they have divulged all of your financial information to the lender, only to get turned down and unfortunately lose their home. The truth is most of these guys who boast “attorneys” and whatever else they can throw at you, are nothing more than beat up loan originators running around town trying to find someone… anyone cheap…,,(usually an ex-loan processor)  to send your file to the bank and see what they’ll do. Common sense should tell you to pick up the phone and call your lender or mortgage loan servicing company and if you don’t like what you hear, then hire an attorney! Yes, when you are in trouble hiring an attorney to fight for you is what one does for the best possible results.

Do NOT buy a “do it yourself book” and do not trust a loan modification company or send them any money to negotiate with your lender. There are about 10 mortgage shops in all of California (most loan mod shops are in California) that have advance fee agreements, see http://www.dre.ca.gov/mlb_adv_fees.html for details. The California Department of Real Estate does not endorse these companies; they only try to regulate them. The rep from these companies must be licensed as well.  Also, you should take note that these companies have been doing loan modifications for less than 6 months, but of course, they are all experts. Yes, I believe some mean well, but the truth is even if they have an attorney on staff, he is not your attorney… and he does NOT represent you at all. Look, you can put a Ferrari emblem on a Ford and it’s still a Ford with a Ferrari emblem. There are just way too many loan mod companies using words like legal and law in their name or boasting they have “in house attorneys”.

You can expect to pay somewhere in the neighborhood of $3,000 to $5,000 with these companies which is general the same amount you will pay to an attorney. If you are in default or foreclosure, only an attorney may collect upfront fees to help stop a foreclosure and save your home. If you don’t have all the money the lender wants to reinstate your loan, an attorney can usually negotiate with the lender to modify the loan, waive the arrearages, and even modify the principal balance to make the loan affordable. There are several laws in place that make it difficult for a mortgage loan servicing company to foreclose on you and have the investor take a huge loss through foreclosure. A good attorney understands how to work with the lender to stop a foreclosure and the lenders… recognizing when someone ‘knows their stuff’… will generally respond to reasonable offers made by a law office for their client. I am confident in saying that as a law firm, we have secured modifications for our clients that neither a loan mod company or homeowner dealing direct, would have been able to secure   For more information on loan modifications go to www.feldmanlawcenter.com or call Mr. Steven C. Feldman at (800) 527-8497.

Saving Thousands with a Loan Modification – Debt Settlement Combination – Felmdan Law Center

July 10th, 2009 at 02:57pm Under Consumer Law

A grinding recession has put already struggling homeowners in a position where household debt loads are quickly becoming unmanageable. Loan modification has become a well known remedy for those experiencing hardships including toxic mortgages, job losses, being underwater on the house, divorce, etc. It has been widely reported that fully half of these modifications end up back in default within six months. Recently Fitch Ratings published estimates that the re-default rates on mortgages would rise to 70% by yearend 2009 due to inadequate terms on the loan modifications and additional household debt that isn’t included in calculating a what a homeowner can actually afford to pay on the monthly mortgage payments.

Once a homeowner has engaged a firm to negotiate a loan modification on his behalf, entering a debt settlement process can double or triple the decrease in monthly payments gained from a loan modification by itself. The debt settlement aspect of this combination has several advantages in terms of the loan modification and the benefits that would accrue outside of it:

1) Monthly consumer debt/credit card payments are typically cut by 50% within one month of starting the process.

2) The documented decrease in consumer debt payments makes the overall financial picture of the homeowner look much better. As lenders broaden their scope to account for consumer debt and ability to pay after a loan modification, the decreased payment as a result of the debt settlement could be the difference between getting a loan modification and being denied.

3) Engaging in a debt settlement will hurt the credit score of the consumer/homeowner but credit scores aren’t a major factor in determining whether a loan modification will be accepted or not. Acceptance for the loan modification is mostly contingent on ability to pay meaning that a debt settlement, even accompanied by a declining credit score, can help make the case for a modification.

4) The timing for completion of debt settlements varies from eighteen to forty-eight months during which time the credit score of the borrower will decline. Over time, as each account is paid off in the settlement the borrower’s credit score will begin to increase. Concurrently, initial interest rates on a new loan modification are typically set for three to five years before payment increases start to go into effect. An attorney negotiating the terms of a loan modification to coincide with completion of a debt settlement can put his client in a position where the homeowner could apply for a refinance at a time when his credit scores are on the upswing.

5) Even if a refinance is not available to the homeowner, timing the conclusion of the debt settlement process to precede the first interest rate bump on the modified loan proves to be advantageous as the homeowner/consumer would have additional cash flow as he finishes his payments to the debt settlement.

For consumer/homeowners with burdensome mortgage and consumer debt payments, combining the two processes can make a significant difference in cash flowing out of the household, the difficulty in managing the debt, and dealing with the possibility of foreclosure. Have attorney assess your total financial picture so that the two processes can be synchronized for optimal results.              

Feldman Law Center – The New York Times gets it About Half Right

July 10th, 2009 at 05:38am Under Administrative Law

Feldman Law Center – A recent New York Times editorial indicates that the Obama honeymoon may be coming to end as the faltering economy continues to eliminate jobs and a tidal wave of foreclosures grows by the month. Through May foreclosure filings reached the one million mark with estimates for the whole of 2009 coming in at 2.4 million. The foreclosure issue, as large as it is presently, could easily exceed the current yearend estimates if job losses stay at their current pace of over 600,000 per month. As it stands, 15.4 homes are currently underwater with mortgage balances that exceed home values. Additionally, 5.4 million homes are currently delinquent or at some stage of the foreclosure process.

The New York Times concludes that “The Obama administration needs to step up its efforts to aid the middle class — or the financial crisis will have no end in sight.” The Times proposes a two part solution to the foreclosure crisis; the first being economic stimulus to stem job losses, an argument that holds obvious merit. Their second proposal concludes that “Loan modification programs that reduce monthly payments may not be effective, because the bigger problem is negative equity.” They fault the administration for building a plan that centers on lower monthly mortgage payments while only recommending principle reductions instead of somehow making them mandatory. The Times also criticizes the administration’s anti-foreclosure plan which was recently gutted by the large banks and mortgage lenders.

The cure-all proposed by The New York Times appears to be focused on principle reductions across the board which would be steep enough to restore some equity to borrowers, giving them additional motivation to stay in their homes and allow them to borrow against their new-found equity should a hardship such as the loss of a job or illness occur.    

By the end of the editorial, the Times is calling for home equity to be restored to homeowners, jobs to be added to the economy, and steady paychecks for all. How banks remain solvent, who pays for job stimulus, and how regular pay checks are covered in this grand plan is left for someone else to answer. The Times does get it half right in that it’s fixing the economy that will finally curb the foreclosure crisis. The big questions again are how and how much will it take?