The Foreclosure Game is Changing and So Are We
If you’ve been reading my previous posts, you’ve probably picked up that the foreclosure game has changed, at least for us. The court decisions and all the new information I’ve learned in the past few weeks has convinced me that the market has spoken and we’re changing some things to better help you fight foreclosure on your own.
To my frustration, I’ve had a tough time finding lawyers who would even listen to me. I never thought it would be as difficult as it has been. I know one great lawyer in LA who gets it, but beyond that, I haven’t heard from any lawyers out there who understand enough to help homeowners without charging a lot of money. Money that a lot of you just don’t have right now.
So, I’ve heard you! And because it’s obvious to me that there are very few resources out there to help you, we’re changing some things here too.
First of all, we will make BIG announcement on Monday about a new resource we’re launching. This will be the culmination of several things Josh and I have been talking about behind the scenes, so please check back on Monday for that news and a special offer.
Second, Desert Edge Legal Services (my company) is moving away from the loan audit process as we’ve been doing it. We have enough information from the court decisions to know that homeowners aren’t winning based on TILA, RESPA, HOEPA, UCC, RICO, etc.
Thus, it seems to me that the analysis of TILA and RESPA aren’t even needed anymore, so we’re not going to focus on TILA/RESPA at all unless you are working with an attorney who tells you he or she wants one, or you’re going to DIY and you’re current on your house payments. Judges seem to take people more seriously if they aren’t behind on their payments or are represented by an attorney.
I’m actually pretty happy about this development, because audits take a lot of time to complete. In addition, because we have had a lot of trouble finding lawyers who understood how to help homeowners, the loan audit as a tool hasn’t been as useful as I would have liked.
It was the best tool we had in our arsenal and better than nothing, but it’s clear to me that the overwhelming majority of you are facing foreclosure on your own and there are few good resources out there to help you.
So, we’ve decided to expand our services – we are now offering a customized review of your documents and an analysis of the chain of assignment to determine what’s going on in your particular case and how you can fight on your own. If you don’t speak up about what’s happening with the fraudulent MERS assignments and the problems with securitization of your home loans, the courts will let a pretender lender take your house without proving they have authority to do so.
So, if you have a pending Notice of Trustee’s sale and are under the gun to do something sooner rather than later, a loan audit isn’t going to help you – but understanding what is happening with the chain of assignment WILL help you go into a courtroom and stall a foreclosure if the fact pattern is there.
Third, we are going to bring on an attorney in some capacity in the spring that can help some of you with representation or find someone in your area who can help you. It’s been my experience that a lot of attorneys have their egos involved and will not talk to me because I’m a paralegal and not an attorney. However, I will be involved with the training of this attorney and the plan is to help more of you for a reasonable fee. I might be wrong on this, but I still think you have a better shot at winning if you have an attorney who gets it.
Fourth, you’ll start seeing more information from Josh. He’s was behind the scenes mostly in 2009, but demand is picking up, so if you ask us for help, you might get a call back from Josh.
Finally, I’ve been kicking around the idea of going to law school part time here in Phoenix in 2010. I won’t be done in time to help our readers with this crisis, but it’s been bothering me that I haven’t taken that final step – on some level, I feel like I’ve missed the boat on the foreclosure crisis. On the other hand, I also think things happen for a reason, so it will all work out the way it’s supposed to.
If you need our help, as always, send me an e-mail: Christine@DesertEdgeLegal.com. I will spend fifteen or so minutes on the phone with you to see if I can help you and we’ll go from there.
Stay tuned for Monday’s announcement!
New Year’s Resolution: Move Your Money
Today I read an article at Huffington Post that suggests Americans should move their money from the big banks into smaller community banks.
I actually did this several months ago — I closed my bank accounts with the big banks and moved all of my accounts to a local credit union. I reasoned that I might have a better chance of getting a loan from them in the future, and if not, at least my money was being loaned locally. (Unfortunately, the fees at community banks aren’t any cheaper than the big banks.)
Anyway, if you’re mad about the massive profits that were made by the banks during the government bailout, you can do something about it by moving your accounts to a local community bank or a credit union.
If enough of us do this, we don’t need to worry about too big to fail — the banks would be downsized by the market!
The Huffington Post said it best:
The big banks on Wall Street, propped up by taxpayer money and government guarantees, have had a record year, making record profits while returning to the highly leveraged activities that brought our economy to the brink of disaster. In a slap in the face to taxpayers, they have also cut back on the money they are lending, even though the need to get credit flowing again was one of the main points used in selling the public the bank bailout. But since April, the Big Four banks — JP Morgan/Chase, Citibank, Bank of America, and Wells Fargo — all of which took billions in taxpayer money, have cut lending to businesses by $100 billion.
Meanwhile, America’s Main Street community banks — the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of — are struggling. Many of them have closed down (or been taken over by the FDIC) over the last 12 months. The government policy of protecting the Too Big and Politically Connected to Fail is badly hurting the small banks, which are having a much harder time competing in the financial marketplace. As a result, a system which was already dangerously concentrated at the top has only become more so.
We talked about the outrage of big, bailed-out banks turning around and spending millions of dollars on lobbying to gut or kill financial reform — including “too big to fail” legislation and regulation of the derivatives that played such a huge part in the meltdown. And as we contrasted that with the efforts of local banks to show that you can both be profitable and have a positive impact on the community, an idea took hold: why don’t we take our money out of these big banks and put them into community banks? And what, we asked ourselves, would happen if lots of people around America decided to do the same thing? Our money has been used to make the system worse — what if we used it to make the system better?
Christine here: what do you think? Please leave us comments below.
Happy Holidays! Here’s a Gift for You!
By now you all know that I think a loan audit is the first step to determine how to proceed with your loan, whether you decide to short sell, modify, file a lawsuit, etc.
So, to say thank you, we’re offering a discount on loan audits until December 31, 2009. The discounted price is $500 (regularly $600 and going up to $750 in January!).
There is one catch: you have to be a member of our e-mail list. You can opt in here.
The cost of the audit includes a complete review of your mortgage documents received at closing (you either ship them to me or scan them and e-mail them) and a substantial report that outlines the inaccuracies, violations and chain of assignment issues.
Got questions? Send me an e-mail at Christine@DesertEdgeLegal.com.
Happy Holidays and thanks for reading the blog!
Christine
“Trial Period” Loan Modifications are Just Another Scam
I’ve been hearing rumblings lately about how many people are easily getting into “trial period” loan modifications and the occasional articles about it. My contact at a California law firm tells me that it’s easy to get qualified for a trial loan modification under the HAMP program. This is a good thing initially, but what happens when your trial period is up?
Apparently nothing.
I’ve never thought loan modifications were a good idea. They are a band aid on a much bigger problem: the massive scam that has been perpetrated on Americans through securitization and all the lies the banking industry had to tell in order to make the entire scheme work in their favor.
For awhile, loan modifications were the only option a lot of homeowners had because there was not a lot of information available to them about how to fight foreclosure, or lawyers who could intelligently represent them. Our elected officials still lag behind the rest of us in understanding what’s going on, but that’s not surprising. And I know that a lot of you just wanted a modification with a house payment you can afford, and I understand that too.
The problem is that loan modifications aren’t working. As I’ve mentioned before, HAMP doesn’t have any legal teeth, and since the government didn’t attach strings to the bailout money they received, the banks don’t have a legal duty to modify anything unless it’s a federally backed mortgage.
And now, people are in trial period modifications, making payments as required, yet the lenders aren’t permanently modifying their loans.
Trial period loan modifications are just another scam on us by our government and the lending industry to get as much money out of us now that they can’t make any more loans. They have to figure out a way to keep those massive profits coming.
Don’t be fooled, America: this is just another invention by the banks to scam you.
That’s why it’s so easy to qualify! They don’t do any underwriting before allowing you to get into the program. Isn’t bad underwriting part of the reason we got into this mess in the first place?
They know you’ll keep paying to save your home, and so far, it’s working. They’ll keep you in the trial period as long as they can to keep taking your money. When you get tired of paying into a trial loan mod and stop paying on your house, they’ll foreclose on you and you’ll kick yourself for not keeping your money in your pocket for something they were just going to foreclose on anyway.
I just can’t see how this mess isn’t going to turn into one massive pile of litigation. If our lawmakers are going to tie the hands of homeowners to keep them from getting legal representation for loan modifications or create laws that don’t force the banks to modify loans or respond to a short sale offer, what else can they do besides file a lawsuit?
Do You Want to Sue Your Mortgage Lender?
I’m excited to announce that I’ve established a relationship with a law firm that is ready to help homeowners fight their lenders in court with meaningful court action. This is the “big stick” I’ve been talking about for homeowners – a loan audit and an attorney who isn’t afraid to stand up to the bank.
If this is you, I’d like to hear from you to figure out your goals with the property and what your desired outcome is. At a minimum, you will need to have a loan audit done first and the ability to pay a reasonable amount for legal fees. The law firm will use the loan audit report for the basis of the lawsuit around your specific fact pattern.
By the way, when I say reasonable attorneys’ fees, the cost is around $5,000 to get the suit filed and around $1,500 per month for the life of the litigation, which would represent a monthly flat fee to cover your litigation costs. A lawsuit could also buy you a lot of time to remain in your home.
I know that a lot of you think this is a lot of money, especially if you’re in foreclosure, and I recognize that it is a significant amount of money to the average person. However, I can tell you from my experience working in law firms that this is really a reasonable amount to spend on legal representation.
Attorneys never make guarantees, but from a strategic standpoint, filing a lawsuit might save you money or buy you some time. One of my clients had an $8,000 house payment, and the monthly cost of his litigation was less than half of his house payment. He’s putting a lot of money into the bank every month because he’s not making a house payment because the balance is disputed.
Got questions? Contact me by e-mail at Christine@DesertEdgeLegal.com and please include your phone number so my assistant can call you back.
How to Sue Your Lender for Predatory Lending Practices
Ok, so here’s my disclaimer: I’m not an attorney and not qualified to give you legal advice. I’m writing this post because I work with homeowners and attorneys all the time to help people fight foreclosure, and I know how it works, or at least how it’s supposed to work. However, please consult an attorney for legal advice specific to your situation.
First, check out this article that appeared in last week’s New York Times from Gretchen Morgenson. The judge in the case wiped away the entire loan debt!
This article brings me to my next point: the entire discussion around the mortgage mess, including loan modifications, has matured quite a bit over the last six or so months. We all know how loan mods work and hear the statistics every day about how the lenders and our government aren’t doing enough to help homeowners.
I’ve been saying this all along, but you need a big stick to get the lender to pay attention to you. And that big stick is a lawyer with lawsuit papers with the lender’s name on them.
This is where things are headed because there are more and more court cases talking about how a homeowner sued a lender and wound up owning their home free and clear because the lender didn’t do things correctly when the loan closed, or couldn’t produce the note, or any other number of things.
And, the other day I received the following comment from a reader, and I’m sure there are lots of you out there wondering the same thing, so I thought I’d write this post.
The comment reads as follows:
“Hi Christine:
I see if they can’t produce the note, or have other missing clauses in my loan, that I can fight it? This is amazing!!! I need more information however. I paid $100 to speak to an attorney here in Vegas, but he won’t file anything for under $3500, which I don’t have, and until I’ve been served with foreclosure paperwork.
If I have not been served with foreclosure paperwork yet, should I file a Produce the note request in court? If not, when should I? Have you heard of any Litton Loan customers who this strategy has worked for? Do I have grounds to file for a quiet title if they cannot produce the note, or are found after a loan audit, to have fraudulent paperwork? And lastly, how do I find out if MERS is the entity trying to foreclose.
Thanks Christine! You are an angel!!!!” (His words, not mine!)
It occurred to me after I read this comment that I’ve never done a post that explained exactly the steps for beating the lender to the punch when it comes to saving your home from foreclosure. So here’s everything I currently know about how to go about suing your lender for predatory lending.
The first step is to figure out what you want to do with the property. If you think you want to keep the property, get a loan audit. Get this piece done as early as you can so that you can be in a strong position long before the lender files for foreclosure or sends you a notice of trustee’s sale.
I’ve been doing loan audits for nearly a year now and find problems in 98% of the mortgage audits I perform. Some common things the lenders consistently screw up are miscalculated APR’s, undisclosed finance charges and missing disclosures required under TILA and RESPA.
Breaking News: ABA Files Suit Challenging the Validity of the Repeal of AZ SB 1271
Well, we all knew it was just a matter of time before we heard from the Arizona Bankers Association over the repeal of SB 1271. They didn’t spend all that money to get the bill passed, only to see it repealed when everyone found out about it.
The greedy bankers are at it again! I wish I could say that I’m surprised.
The Associated Press reports that the Arizona Supreme Court is being asked to overturn budget legislation that repeals a controversial new state law on legal protections for homeowners after foreclosures.
The suit was apparently filed on Tuesday by the Arizona Bankers Association, who says the repealed legislation is unconstitutional on several grounds, namely because the issue wasn’t included in Gov. Jan Brewer’s special session call for action on budget and tax matters.
I don’t have much more information to report on this at the moment, but stay tuned. I’m sure it will get interesting.
California SB 94 Expected to Become Law Today – No More Upfront Fees on Loan Modifications
Today, California Governor Schwarzenegger is expected to sign SB 94 into law.
To summarize, the bill prohibits persons from charging advance fees to borrowers in connection with the modification of the terms of the borrower’s loan, require those who wish to charge a fee for loan modification services (after performing them) to provide a specified notice to borrowers regarding other options available to the borrower, prohibit servicers from imposing any interest or charge for performing services for borrowers in connection with loan modifications or other forms of loan forbearance of forgiveness; and close a loophole in the California Finance Lenders Law.
As we’ve discussed on this blog before, this bill will probably end the loan modification industry in California as we know it.
If you listen to the steady stream of propaganda coming from the California Attorney General’s office, you’d think everyone who performed loan modifications is a scam artist.
The California Attorney General’s advice to do your own loan modification is highly irresponsible. He assumes that the banks have borrowers’ best interests at heart, which we all know is not true. If you’re worried about scammers, let’s take a look at the banking industry, which is the biggest scam artist of them all.
According to a legal assistant contact in one of our attorney’s offices, loan modification companies and law firms alike are literally closing their doors because of this law. The industry is changing overnight.
The good news for homeowners who want to hire an attorney’s office to obtain a loan audit is that it will allow them to break up the cost of the loan modification over time. Because of the rule against charging upfront fees, the costs of the loan modification will be billed over time as the work is completed.
The downside is that the cost of a loan modification from a legitimate provider will go up because of increased administrative and collection costs.
