This last week I saw a new wrinkle in the nationwide mortgage lender’s stalling routine when it comes to the mortgage modification mess. While I haven’t seen any press on this new tactic, I’m convinced we’ll see more going forward. While a new stalling technique won’t in and of itself change the overall mess by itself, I do believe that it will alter how distressed homeowners – especially the mortgage modification-qualified homeowners – will deal with the technique.
One of my client’s has received – through his mortgage modification-qualified attorney that I recommended – notice that his lender admits they have a complete and qualified mortgage modification application and file. Essentially this means that the lender has no excuse to tell this property owner that they haven’t submitted the necessary documentation. Now they say, they take all files in the order they were submitted. This means that the complete, attorney submitted files are lumped with the supposedly incomplete, lost, misplaced, incorrectly completed applications. (We don’t know that. We only have the lender’s word.) This in turn means that they can spend as much time evaluating and rejecting any file at any time. They now can spend as much time as they wish evaluating those incomplete files. (My client has been told to expect a three month delay. Presumably this would be previous to the three month or so ‘trial modification’ period inexplicably tacked on by the lender.)
If the U. S. Dept of Treasury woke up tomorrow and decided to get serious about enforcing their authority to make lenders evaluate mortgage modification applications in a timely manner, (something above the 13% rate promised through the end of 2009); it would take another ten months to get to the bottom of this tactic. (March, 2009 to January, 2010)
I believe this will impact the advice and counsel given by any mortgage modification-qualified attorney. I think every distressed homeowner should take a page out of the debt settlement industry.
Please understand, the minute you contract with a national mortgage modification attorney, all foreclosure proceedings will stop. It’s part of our Mode of Operation, because we’ve been well aware of the lender’s propensity to dilly-dally with mortgage modification negotiations, both in and out of the ‘trail modification’ period, and pursue foreclosure proceedings simultaneously.
Here goes: the minute one of my (or any other) national attorney firms accepts your case, (pre-paid or not, depending on your state), open a separate savings account at a safe and secure lender (read: any other than your current lender). Deposit exactly one third of your current net monthly income into that account every month without fail (preferably on the due date of your old mortgage payment agreement). When your attorney tires of the runaround by your lender and decides to file an incompetence suit, and it goes to the judge, the distressed homeowner can show huge good faith intent to all concerned about their intention to abide by anticipated mortgage modification terms.
I would encourage any and all distressed homeowners with a distressed mortgage to do this immediately. Just because we haven’t seen any press about this tactic today doesn’t mean we won’t in a few months. Believe me, we will.
Legislators are currently being bombarded by the lending lobby that mortgage modification applicants (read: lazy) are mostly just stalling foreclosure proceedings distressed homeowners to avoid losing their home.
So just imagine showing up to court with good faith bank deposit statements and your attorney dragging out the proof of stalling by your lemder.
Now, imagine if every approved mortgage modification file had that same money trail by say, February or March of 2010.
But you, the individual homeowner, will earn interest on those deposits.
Now, I’m going to sit back and wait for this suggestion to catch on.
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