The Mod

The Mortgage Lender’s Scam

When I was young I often dreamt

Of owning a home one day
A great investment it would be

No money down, thirty years to pay

So my wife and I bought a house

And together we made it a home

A wonderful place to raise our kids

With lots of land for them to roam.

For years we lived there happily

In love, watching our children grow

Then one day my health went south

Couldn’t work, had to take life slow

My wife was forced to get a job

She worked hard but the pay was low

Unemployment? It wasn’t enough

To make ends meet, our debts did grow

Missed some payments, what will our lender do?

No worry, we understand, we can bend,

They say, we really want to help you

If you modify we’ll tack it to the end

Okay, sounds good, what do we do now?

Fill out this form, Send us this and that

No payments due until you’re approved

We’ll get this mod done in nothing flat

We do all they ask, they say, just relax,

Then a letter comes—your payment’s late!

We wilt in disbelief. You said don’t pay

But now it’s ‘pay up’ or we’ll accelerate?

We call them, distraught, confused, upset

We don’t understand this chilling event?

After passing us around, a supervisor says

Ignore the letter, it shouldn’t have been sent.

But weeks go by, yet not approved,

More letters come that make us squirm,

We call, complain, get passed around.

Don’t worry. All is well, they confirm

Weeks stretch to months, still no word

Then a letter arrives by certified mail

I call, upset. Oh, don’t be concerned

But, what in the hell is a trustee’s sale?

They say it’s all a computer glitch

Just hang in there, your mod’s a go

But from a law firm? I’m not convinced

They say, they know, just breath slow

I call again to check what’s going on

Can’t find my application anywhere?

I sigh in disbelief, such incompetence,

Beyond belief, I’ll kill them all, I swear.

Now the constable’s knocking at my door.

You said you ‘d wait, you wouldn’t dare,

Sell my house at a foreclosure sale? I call,

Mad as hell, but noone there seems to care

It’s too late now. Tried to help you out,

We did our best. Sorry, what can we say?

But don’t despair,'Cash for Keys' is still a go

Move out now, no fuss, and have a nice day!

Delay in Foreclosing Causing Much Grief and Financial Loss to Consumers

One of the most perplexing problems for consumers who have surrendered their home in bankruptcy, is that it often take months or even years for the lenders to get around to foreclosing. On the surface this might not seem like a big deal since the property becomes the mortgage servicer's problem once it is surrendered, but that's not the case at all.

Once a discharge has been granted the consumer no longer is liable for any deficiency the lender may suffer, but he still remains liable for taxes and homeowner's dues. We frequently find ourselves having to respond to lawsuits from homeowner associations for unpaid dues or threats from municipal authorities theatening to impose fines for properties that are falling apart or becoming overgrown with vegetation. Clients are frustrated by this and cannot understand why this property that has long since been surrendered in bankruptcy is still a problem for them.

What is even worse for the consumer, however, is the propensity for servicers to continue to send monthly statements, insurance notices, escrow statements, default notices and a myriad of other paperwork to the consumer who no longer has the account with the lender or servicer since the debt has been discharged. This continued communication with the debtor is in clear violation of the discharge injunction yet it seems to be unstoppable. 

We have filed suit on numerous occasions against mortgage services for these types of violations, settled the cases, only to have the notices continue again before the ink is even dry on the settlement. Sometimes it's immediate but often it is a year or two later when the notices start coming again. A lot of times this happens because a new servicer is assigned to the account and, for some unknown reason, the account pops up again as an active account. It gets even worse if the new servicer starts reporting the debt on the consumer's credit reports which is a common occurance.

I guess the ultimate question is why does it take mortgage lenders so long to foreclose? I know of people who have lived rent free in their homes for three or four years after they stopped making payments. What's up with that? I know sometimes there are chain of title issues due to the mortgages being transferred so often between securitized trusts and the government has put a lot of heat on them to try to do modifications. But from what I have seen of the modification process, the mortgage servicers aren't really serious about modifying loans and are only going through the motions--stringing customers along with the false hope that they will get a second chance with their mortgage when they have no intention of giving it to them.

The bottom line is consumers who have surrendered their homes in bankruptcy often suffer extreme mental anguish and financial loss due to the mortage servicer's delay in foreclosing on property that has been surrendered to them. Fortunately, there are remedies under both state and federal laws.  For more information about remedies available visit our website at http://mancheelawfirm.com/.

In my spare time I write novels and the next one coming out this fall is about a family that is victimized by a predatory mortgage lender. So if you'd like to see a practical example of what is happening in the marketplace today visit my website at http://williammanchee.com/ and check out Unconscionable, a Rich Coleman Novel Vol. 3. While you are waiting for Unconscionable to come out read Plastic Gods, A Rich Coleman Novel Vol 2. It's a timely financial thriller about a predatory bank and how one attorney lost everything when he became a threat to its lucrative business.