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
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, mars rule
