This problem will assuredly make it’s way around the U. S. Colorado has found it’s own sneaky remedy for this made-up problem. More on that later. Notice that the lenders are behind this movement. The Not-for-profit agencies are admittedly 10% effective at mortgage modification efforts. The new MARS Rule from the Federal Trade Commission, or FTC, makes this problem moot now. Attorneys can’t do anything you can’t do for yourself anyway. For 2011, it is a Do it Yourself Mortgage Modification world.

Backers of a new California law that bars mortgage modification services from charging up-front fees say the rules will put scam artists out of business.

But mortgage lawyers like Paul Molinaro wonder whether the new regulations will really just drive honest attorneys out of the practice.

Gov. Arnold Schwarzenegger this month signed Senate Bill 94, a response to complaints from desperate homeowners who have paid thousands of dollars in fees to mortgage modification services, only to learn later that the business did little or nothing to save their homes from foreclosure.

The new law, which took effect immediately after Schwarzenegger signed the bill, bars anyone from charging fees for trying to modify a residential loan until that work is completed. It also requires those service providers to tell clients, in writing, that nonprofit groups offer free help for troubled mortgage-holders.

Consumer groups, community organizations and the State Bar endorsed the legislation. Even though many lawyers complained that the ban on up-front fees would make loan modification work impractical, Bar leaders said new rules were justified by shady practices that have led consumers to file hundreds of complaints with the Bar.

In some cases, foreclosure relief consultants, who are not allowed to take advance fees, teamed with lawyers who could collect up-front payments. Attorney General Jerry Brown has sued a handful of attorneys for allegedly working with these consultants but never performing any substantive work to lower consumers’ mortgage payments. The Bar also took the unusual step last month of naming 16 attorneys under investigation for misconduct related to loan modifications.

Bar spokeswoman Diane Curtis said Bar attorneys are working on a document that will answer members’ questions about the new law. The law calls for violators to face Bar discipline.

SB 94 author Sen. Ronald Calderon, D-Montebello, said his legislation shouldn’t drive any legitimate attorney out of business.

Calderon is chairman of the powerful Senate Banking, Finance and Insurance Committee. Banks, credit unions and lending industry groups have contributed more than $18,000 in contributions to his 2010 re-election campaign.

Critics say Calderon is being unrealistic. Lenders fight many loan modification efforts, they say, and they employ high-priced lawyers of their own. Nonprofit agencies are overwhelmed by homeowners seeking help, and by the time a client approaches a lawyer they’ve probably already tried that option and left disappointed, they add.

What’s more, tough cases can last months — even a year or more, real estate attorneys say.

Molinaro said his firm now provides what he calls mortgage counseling. Clients pay a flat fee up front, which he holds in trust. For that, they get advice on their options, including bankruptcy, tax implications and short sales, and help with applications for a loan modification. If they want more help, say, talking to a lender on the phone, they can come into the office and pay his hourly fee for service.

Molinaro and other attorneys would rather see the Legislature, the Bar and the attorney general go after bad apples with laws already on the books.

Click to read more about your Do-it-Yourself Mortgage Modification REST Report

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tags: do it yourself mortgage loan modification, calculate hamp net present value,rest report, mortgage loan modification colorado, mortgage loan modification nevada, mortgage loan modification arizona, mortgage loan modification new mexico, federal trade commission, mars rule, stop foreclosure, foreclosure alternatives, prevent foreclosure, avoid foreclosure

Originally posted 2009-10-19 00:13:47. Republished by Blog Post Promoter

Increasing pressure on the Federal Government to control mortgage modification firms has encouraged the Federal Trade Commission to recommend not allowing up-front fees for professional mortgage modification negotiations. Because of the highly publicized failure of many companies to perform promised mortgage modifications, this would seem to be a great idea. As ususal, hasty and knee-jerk reactions to those few ill-prepared companies, or just plain crooks, will further hamper what is an overall well-intentioned industry.

The newly adopted MARS Rule wound up forbidding upfront fees for mortgage modification companies that were not driven by attorneys. Attorneys were allowed to charge up front fees as they were incurred; but they may not collect all the fees unless the client is satisfied with the end result. This last little part of the rule is driving proficient attorneys out of the mortgage modification business because of the unpredictability of final results. In no other legal pursuit is an attorney held hostage by this kind of restriction. No professional attorney will ever promise a given outcome of a legal process. They cannot be held accountable for other humans (the protagonist in any legal dispute, and the arbitrator) to not use good sense. 

The banks will use their illegal ‘trial modification’ stalling techniques to ensure that mortgage modification is not a profitable endeavor. We already know that the non-profit counselors are essentially inneffective in obtaining beneficial, affordable mortgage modifications. The banks and un-informed public will then rise up and blame the President, US Dept. of Treasury, and federal government in general for the failure of the Home Affordable Mortgage Plan, or HAMP.

A little perspective might help. Imagine going to Wal-Mart and promising to pay for an item three months from now, after you were sure it would perform as promised. The similar much-publicized law passed last summer in California in June has done little to stem any crooks or other ill-prepared mortgage modification firms. Why? Because almost all the billable negotiations are performed within a week of modification application anyway. The reason a permanent mortgage modification takes so long is directly the responsibility of the banks doing everything they can to avoid negotiating. Why should a professional organization be held hostage by a ne’er-do-well mortgage servicer?

The upshot of all this is the spectacular results of the REST Report. We are operating at 100% efficiency – no complaints that we know of. The REST Report uses the bank’s own software to calculate a mortgage modification or short sale. Those are the only two options because those are the only two beneficial solutions for mortgage investor and distressed homeowner.

For those readers that prefer YouTube videos, try this: How to Get A Beneficial Mortgage Modification Now

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tags: do it yourself loan modification, do-it-yourself short sale, mortgage modification, mortgage lender fraud, mass joinder lawsuit, loan modification colorado, loan modification nevada, loan modification arizona,loan modification new mexico, loan modification california, loan modification georgia,federal trade commission, mars rule,up front loan modification fees,

Originally posted 2010-02-05 09:33:47. Republished by Blog Post Promoter

President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act today. It seems to be better known simply as the Financial Reform Bill, and HR 4173 seems a key also. We missed the first two chances. Insist on Elizabeth Warren to have a snowball’s chance this time.

Just knowing that the House version passed instead of the Senate version is great news. The House version allows attorneys to do business as they always have since the invention of jurisprudence. That is that they can, and must, charge an ‘up-front fee’ for their service for mortgage modification services. We as a country owe Martin Andelman, and Dodd and Frank, a huge appreciation and ‘thank you’ for this allowance. Indeed, we owe the entire legislative branch of our government a huge slice of gratitude for resisting the onslaught of banking cartel lobbyists that gave their level best to resist this legislation.

We know that there were/are three banking lobbyists for every US legislator in Washington. These lobbyists sign up for every single appointment available for every legislator every single day, effectively filibustering for their one-sided agenda and against this bill or whatever they deem of priority and ignoring consumer accountability. This is what TARP paid for.

Currently, the nation’s banks are being allowed to avoid negotiating in good faith with distressed homeowners for a mortgage modification or a short sale. Mortgage modification files are routinely being ignored and lost with impunity. There is no accountability for these banks.

Every one of the mortgage modification firms I represent have been shunned by every bank in their professional attempts to negotiate beneficial mortgage modifications on behalf of their clients. Currently there is effectively no such thing as a trial, or even a permanent, mortgage modification.

No attorney can afford to do business when at the mercy of an adversary that refuses to answer the phone.

One more time, how often did you get away with losing your homework or assignment in school? Or ever?

Alternately they may fall prey to the Home Affordable Foreclosure Assistance Act, or HAFA, that was written by the banks and fences that same distressed homeowner into a short sale on the terms that benefit the banks instead of the distressed mortgage owner.

Elizabeth Warren was in on the ground floor of this bill since it’s inception. Major television news reports that she is out as temporary head of the Consumer Financial Protection Agency that was established by the Dodd-Frank Act. But them, apparently so is Tim Geithner as Treasury Secretary. Sounds like a push to me.

Here’s the problem. US Treasury Secretary Geithner does not support Elizabeth Warren. AG Holder does not support her. Larry Sommers does not support her. Wthout a groundswell of support from the electorate, (that’d be you) she will assuredly be swept away by the biggies.

We know that Geithner was kidding about the Home Affordable Mortgage Plan,or HAMP. We all watched the week President Obama stood up and barked that he was going to make the banks behave, and then got told to sit down by those same banks. Elizabeth Warren was our next best hope.

We all know what happens when you enact a well-intentioned legialation with no enforcement. With Bush it was called TARP. With Obama it’s called HAMP: and when you let the fox guard the hen house, it’s called HAFA. It’s up to you, (that’d be the government) to make sure the Consumer Protection whatever doesn’t fall victim. (I already called my legislators.)

Make the call for your own benefit.

This YouTube video says it all. Go here: How to Get A Beneficial Mortgage Modification Now Please ‘Like’ the video, will you?

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tags: do it yourself mortgage loan modification, do-it-yourself short sale, mortgage loan modification,sue mortgage lender, mass joinder lawsuit, mortgage loan modification colorado, mortgage loan modification nevada, mortgage loan modification arizona, mortgage loan modification new mexico, mortgage loan modification california, wall street reform act, financial reform act, dodd-frank reform act, HR 4173

Originally posted 2010-07-21 15:29:31. Republished by Blog Post Promoter

Any reader that does more than a cursory serch for unbiased information on mortgage modifications discovers the Mandelman blog. A little more digging reveals that it is written by Martin Andelman. The guy knows more about the mortgage modification industry than anyone. Unlike me, he has no financial interest in mortgage modification. He simply researches and writes about it. I look to his blog daily to often find ideas to write about on this blog.

Martin Andelman, aka Mandelman, recently spoke at a conference held by the American Bar Association Consumer Financial Services Committee held in Park City, Utah.  This year’s conference was focused on the foreclosure crisis and loan modifications. He was invited to be a speaker participating on a panel that included other attorneys with various areas of expertise. That highlight alone should indicate his level of legal regard, reputation, and knowledge. 

Tom Pahl of the Federal Trade Commission (FTC) was there and caught Mandelman’s attention speaking about his involvement in enforcement actions against loan modification scams, among other things.

Mandelman gave a predictable positive account of the goodly number of national attorneys that are sincerely involved in beneficial and affordable mortgage modifications. Tom Pahl then got back up to speak about how hard it was for the Federal Trade Commission (FTC) to spot the ‘good guys.’ They only hear about the ‘bad guys.’ Mandelman, who researches and writes about the good guys acknowledged as much. When pushed for a number, Mandelman stated that he knew as many as 70 attorney firms that were successful and ethical in negotiating those beneficial and affordable mortgage modifications.

It was pointed out that The Dept. of Housing and Urban Development (HUD) simply did not have the bandwidth to handle the millions of homeowners that would need help in the years ahead. What should have been added is that these same counselors do not actually do any negotiating with the ubiquitous treacherous lender; they just instruct the process. They do not have any of the real phone numbers or access to the decision-makers at the lenders. They can do little to help avoid the labyrinth the lenders put out there to obfuscate and confuse the hapless distressed mortgage holder. In the most recent congressional accounting report it showed that HUD has helped roughly 880 homeowners this past year. Considering there were something north of 3 million foreclosures last year, this is a drop in the bucket.

Since this meeting it is obvious that attorneys can’t do anything the private homeowner or HUD counselor can do. The only solution is the REST Report. Beat the lender over their head with their own software.

I haven’t been able to put my arms around Mandleman’s conclusion yet, but the main point is:

“If any private sector attorney thinks that he or she can practice autonomously, hidden away in a little box, pretending to exist under some sort of imaginary radar… and that somehow federal or state regulators are supposed to know that they’re practicing law in a legitimate and ethical fashion, delivering a great deal of value to their clients… well, that’s just terribly naïve, period.”

Congress had decided to turn the topic of loan modifications over to the FTC to make federal rules. Those rules culminated in the MARS Rule, adopted at the end of January, 2011. There are two legislative proposals in congressional committee that pretty much mirror the two bills that California debated this past year, SB 94 and AB 764.

Mortgage banking compliance attorney Julie Greenfield was also on the panel, and she delivered a compelling talk on why forensic loan audits are often not delivering any value to the homeowners who purchase them.  Julie also voiced her displeasure at how the new law, created by California’s SB 94 bill, restricts attorneys representing homeowners at risk of foreclosure by disallowing them from accepting client funds into a trust account in advance of work being completed.  Julie’s an expert in areas like Truth in Lending and RESPA, and has worked as in-house counsel for institutions ranging from Lehman Bros. to Option One.

In fact, statistics show there is an 85 percent chance of serious RESPA violations in any mortgage contract written since 2000. It’s a good investment anyway. More importantly, it really doesn’t matter. A forensic loan audit is just a tool to get the treacherous lenders to negotiate a beneficial mortgage modification in good faith.

Mandelman goes on to make a striking and vivid argument for legal  representation in a mortgage modification, short sale or even a foreclosure. Since then, it is obvious to us that the huge majority of distressed mortgages don’t need legal representation to resolve. They just need the REST Report. Once the REST Report is run, finding an attorney for any other mortgage issues will be easy. All the work will have been done for them.

This YouTube video says it all. Go here: How to Get A Beneficial Mortgage Modification Now

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tags: do it yourself mortgage loan modification, avoid foreclosure,foreclosure alternatives,stop foreclosure, prevent foreclosure,mortgage loan modification colorado, mortgage loan modification nevada, mortgage loan modification arizona, mortgage loan modification new mexico, mortgage loan modification california, mortgage loan modification georgia, rest report, federal trade commission,

Originally posted 2010-01-26 22:13:09. Republished by Blog Post Promoter

As I daily cruise the internet, reading the stories of people losing their homes to foreclosure; many of those stories focus on trying, and failing, to get mortgage modifications. The stories always have one of two different points: trusting homeowners having been taken advantage of by crooks; or of getting an unsatisfactory response from their lender.

PBS aired a new Frontline episode titled, “Close to Home.” One more story of several poor souls who assumed their lender cared about their plight. Fo those of us in the mortgage modification business, it was yet another poignant story.

I guess they attempted modifications on their own because of the story. Currently, no attorney can get any more accomplished on a mortgage modification negotiation than you can. But the REST Report can. That has changed since the airing of this episode. The bank’s can sandbag anyone with impunity.

The overwhelming final realization is that the bank will not help them. Somehow, the individual homeowner got the belief that their lender empathized with them and cared about their plight. They also got the feeling that the HAMP program (Obama’s plan) would help them. Without legal enforcement, that does not happen. The U. S. Treasury is content that 13% of the eligible mortgages are modified. They said so. In the US, you don’t get prosecuted for stupidity. The trick is to catch the mortgage servicer breaking the law. When the servicer files foreclosure without good faith negotiations, that’s breaking the law.

How long will it take the typical distressed homeowner in the U. S. to get it? Your lender does not care about you. Mortgage servicers actually make more money be foreclosing than by modification or short sale. The distressed, trusting, and unarmed homeowner doesn’t stand a chance. The U. S. Treasury Dept. is satisfied with a 13% mortgage modification rate as it pertains to the recovery of the U.S. economy as a whole. This after all their huffing and puffing last July.

If you value your home, and have hung on to gainful employment, it is up to you to make that last inquiry into saving your mortgage.

Click to read more about your Do-it-Yourself Mortgage Modification REST Report

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tags: do it yourself mortgage loan modification, calculate hamp net present value,rest report, mortgage loan modification colorado, mortgage loan modification nevada, mortgage loan modification arizona, mortgage loan modification new mexico, federal trade commission, mars rule, stop foreclosure, foreclosure alternatives, prevent foreclosure, avoid foreclosure

Originally posted 2009-10-30 00:01:58. Republished by Blog Post Promoter

When I called one hundred distressed mortgage owners, one had obtained a mortgage modification without any legal assistance. That is about the national average. The reality is that making the lender pay attention to your mortgage modification or short sale and not lose your paperwork is the biggest challenge. Now though, it is possible for that distressed mortgage owner to self assess their eligibility for a mortgage modification.

Mandleman has now written about the REST Report twice. He freely admits this second post is more reasoned and rational. The REST Report is a report generated by the REST software platform, which is a loan disposition analysis system that, in various forms, is used by major banks and mortgage servicers.  Financial institutions use systems like REST to analyze the various options available when a loan may not be repaid as agreed by a borrower. It enables a borrower to enter into negotiations for a mortgage modification with the information necessary. Mortgage modification or short sale is always the best solution for the mortgage investor. Always.

When homeowners arrange to run a REST Report, the system produces an 11-page document based on the specifics of their property and their financial situation that shows, from the bank’s perspective, the various financial outcomes that would result from modifying their mortgage compared with the costs of foreclosure.  A homeowner can then use the report by submitting it to his or her lender or servicer, along with the required supporting documents, when seeking to obtain a loan modification, or approval for a short sale. The only aspect missing is a human being being able to talk sense to an underwriter. These are people that will never take a call from the borrower. For that, you need to be prepared to support your case in foreclosure court. The REST Report does that too.

The three outstanding attorney firms I used to represent had software that duplicated those calculations. The problem was that their software could not and did not stand up in court. The REST Report does. Again, it uses the bank’s software to run calculations. In court, you’re submitting their own calculations. There’s nowhere to run.

I know that my instructions for the required hardship letter are better than anything I’ve seen on the internet. I’ve seen it prove itself for two years.

Loan modifications and short sales are like snowflakes… no two are alike. Yet, they all require the same documentation.

The news is replete with stories of trial modifications lasting several more than the typical three months. In the U. S. the mortgage companies don’t get prosecuted for being stupid. As long as they don’t foreclose, you get a free house. But when the mortgage servicer does prosecute, your foreclosure judge raps them on the knuckles with the REST Report.

The REST Report qualifies the distressed mortgage owner both inside and outside HAMP guidelines. Many banks have mortgage modification plans that are better for the homeowner than HAMP anyway.

It’s not that we believe that a servicer would accept the analysis shown in the REST Report at face value, they most certainly would not.  But we do know that when they verify the report’s conclusions using their own internal systems, they will find the REST Report’s financial analysis to be accurate. Net Present Value calculations are standard in the mortgage industry. Foreclosure judges know this.

If you do need legal representation, there’s plenty of time for that later, after your lender makes a fool of themselves.

A distressed borrower should insist on a do-it-yourself mortgage modification or short sale because the Federal Trade Commission has decreed with their new MARS Rule that that will be so.

Click to read more about your Do-it-Yourself Mortgage Modification REST Report

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tags: do it yourself mortgage loan modification, calculate hamp net present value,rest report, mortgage loan modification colorado, mortgage loan modification nevada, mortgage loan modification arizona, mortgage loan modification new mexico, federal trade commission, mars rule, stop foreclosure, foreclosure alternatives, prevent foreclosure, avoid foreclosure

Originally posted 2010-05-30 11:30:09. Republished by Blog Post Promoter

The news has been awash with reports of scammers promising distressed homeowners a mortgage modification, taking payments, and then not performing. Everyone should notice that no facts and figures about scammers vs. successful negotiators are ever forthcoming. Why? Because it is in the banks’ best interest to scuttle the Home Affordable Mortgage Plan (HAMP) and turn public opinion against it. The FTC is playing into the hands of the bankers. They are doing exactly what the bankers want.

The FTC is abdicating their lawful responsibility to investigate the bad guys – taking the easy way out. They are ‘mailing it in.’

Some background:
 
Last June the California legislature tried to solve the ‘up-front payment’ problem with a law prohibiting those same up-front fees. One week later, after talking to successful attorney firms who were negotiating successful mortgage modifications, it was discovered that nine out of ten billable items needed to negotiate a mortgage modification with these treacherous lenders were completed and billable after the first week of accepting a file anyway. They could have saved themselves an ill-advised piece of legislation if they’d done their due diligence beforehand.

Now the Federal Trade Commission (FTC) has gotten it into their head to try the same trick. They’ll get the same results. Or, more likely, all of the successful mortgage modification firms will cease to do business. Why? Because no attorney can afford to pursue legal redress and wait three (or more) months while the erstwhile defendant decides they have nothing better to do but open another file that will cost them money. The banks refuse to acknowledge any responsibility for the current mortgage crisis. They exist solely to turn a profit for their investors. That doesn’t include losing money on investments that have and will show a loss.

It is impossible to blame the one percent permanent mortgage modification rate of HAMP on scammers. That is statistically impossible. The fault lies with the banks; and the FTC should know it.

The FTC needs to pursue the neglectful lenders for not negotiating in good faith with the successful modification firms that exist. As an enforcer of US law, it is their job to prosecute the bad guys, not prevent the good guys from making the intent of HAMP succeed. By eliminating those ‘up-front fees’ the FTC hopes to absolve themselves of any duty to identify the bad guys.

Getting a mortgage modification requires legal assistance. That is a fact. This has been proven since the inception of HAMP last March. The free HUD counselor are at best only ten percent successful in assisting distressed homeowners in negotiating a mortgage modification. They do not act as legal assistance. It is up to the actual homeowner to do all the work themselves.

The reader or any FTC employee should go ask any other attorney to work for free for three or more months for free. See how far you get.

There is no reason for any trial modification.
The banks use the tactic to stall, and refuse permanent mortgage modifications.

FTC is listening to the wrong whiners. Is this just a PR stunt?

Banks have had almost eleven months to get it right. Go get them to live up to HAMP requirements – not the few firms that may easily have tried to modify and didn’t get it right. Do your homework FTC.

The supporting documents to justify a mortgage modification are exactly the same as the ones required for a new purchase mortgage, or even a mortgage refinance. Banks don’t lose those documents. Why do they lose mortgage modification supporting documents?

We all know that there is no reason to require re-submission of paystubs, etc. for transferring from a trial modification to a permanent modification, but banks continue to try to require them.

When we all were in school and lost our homework, we were held responsible for our irresponsibility. But banks continue to get a pass for losing or misplacing the documents submitted for mortgage modification consideration.

In order for HAMP to succeed, FTC needs to hold lenders accountable, not throwing-out-the-baby-with-the-bath-water by punishing well-meaning and honest mortgage modification attorneys.

Every other attorney requires a retainer, why not mortgage modification attorneys? If they don’t perform, refer to state’s Attorney General or the US Attorney General. Or are they abdicating their duty also?

How about the chairman or any other FTC personnel work for 3 months to a year without pay, waiting for the bank to do their job? How about ‘No Up-front Fees’ for the federal government, including the FTC?

Readers of this blog will remember that I look to Mandelman for accurate information and commentary about this mortgage modification mess. Mandelman readers will know that his inflammatory rhetoric is common on this subject. Today I notice he has commented on this same ill-conceived proposal by the FTC. But this time, I hope the reader notices that my comments are even more inflamatory. The FTC needs to be slapped hard on the forehead. As pathetic as the Home Affordable Mortgage Plan success has been, this FTC proposal is incredibly worse.

I represent several really outstanding mortgage modification firms. This proposal is incredibly unfair and unprofessional to these well-meaning and successful firms.

Read Mandelman here

I have submitted the above article to the FTC on their public comment web link on this subject. I hope any reader does the same.

Comment to the FTC here

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