(Effective October 11, 2009 The Law Office of J. Arthur Roberts complies with SB 94)
For those who are reading this, it is likely that you are not facing your first attempt at having your loan modified. Likely, you have already taken a swing at the process and discovered the harsh reality – that despite all of the hype surrounding it, it is not the magic “cure all” for your foreclosure problems. Even after the HAMP program was introduced, less than ten percent of the 9 million applications were even considered, let alone approved. No matter what you’ve been told, the simple truth is that lenders and loan servicers have one goal and one goal alone – to make money.
Regardless of the strides made throughout the years, the simple truth is that loan servicers have not improved much. In many cases, you will find that they are severely understaffed, negligent, prone to errors and arrogant; you will often discover that they are simply indifferent to your struggles. Have you ever wondered why it seems like the bank doesn’t care about you? The truth is that the investor is the one who loses money when a foreclosure happens, but loan servicers make more. They therefore have incentive to make the process as long as possible and despite their portrayal by the government, they are not there to make a loan modification process a simple one or quick.
Looking into Whether a Lender Has Done Something Wrong
If you have already attempting a loan modification, it is highly recommended that you contact an experienced attorney as soon as possible. Not only can this increase your chances, but it can also help in determining whether or not a lender has committed an error of any kind. By hiring a lawyer from the Law Offices of J. Arthur Roberts, you will get the chance to have an audit performed on all related documents – everything from the appraisal itself to the relationship between the companies and individuals you are dealing with (ex: appraiser, broker, lender, etc.).
On a similar note, our firm strongly believes that the chances of success with any given loan modification will increase fourfold if there is the threat of litigation of bankruptcy on the horizon. We therefore encourage you to hire an attorney who can help you with your situation. We know that a loan modification is more likely to be successful if the lender is found to have committed an error and broken the law – and we are prepared to do everything possible into researching this possibility to give you the leverage you deserve.
All About Front Door Loan Modifications
Even if a violation does not exist, it is possible that you will be able to secure a loan modification. It is important to note that a recent law was passed in California – SB94. This law effectively outlaws any sort of services involving advance fee loan modifications, even when involving attorneys. At our firm, we operate in full compliance of this law. It, however, is important to keep in consideration. If you are thinking about hiring a firm who claims to help obtain a loan modification as opposed to pursuing a violation of the law, there are new laws which apply. Your lawyer must let you know that you can do the loan modification on your own.
At our firm, we want you to know that yes, you can pursue a loan modification on your own – in the same way that the law permits you to represent yourself in the court of law. Even if you hire an attorney, at the end of the day, you are at the whims of the loan servicer. There are no laws which guarantee that you will receive a loan modification and you are afforded little to no protection. So even if the servicer loses paperwork, makes a mistake, neglects to handle your case or otherwise denies your case, you have no options to pursue legal recourse. You have no legal grounds to sue.
Even under the new HAMP program provided by the government, you are not permitted to sue. This is because you are not legally guaranteed to have a loan modification; when you apply, you are essentially asking for a favor. There is nothing on your side to provide leverage and unless the servicer sees a benefit for them to accept, there is nothing you can do to force it to happen. Even in cases where you clearly qualify, there is nothing that states that the lender has to accept. If they can make more money by denying your loan modification, they are well within their rights to do so.
So why work with a California loan modification lawyer?
While the above might make you think that there is no point in hiring an attorney, this could not be further from the truth. By getting a lawyer on your side, you have yet another person who is adding attention to the case. At our firm, we have an eye for details and can often help you find a “sweet spot” to help in the process of getting accepted for a loan modification. We can also help to increase the communication between your loan servicer and yourself – we can even help dissuade unlawful or incompetent actions on their part.
At our firm, we operate on the belief that somewhere along the line, the lender will mess up. We anticipate that paperwork will be lost, responses will fail to come and information will be inconsistent. We consider it our responsibility to help respond to these frustrating actions and help intervene on your behalf. We also recognize that many lenders like to play a game of chicken with borrowers – dragging the process out until the very last minute before giving their response. Should they do this and then deny your claim, we make sure that we always are prepared with a backup plan – no matter whether it’s bankruptcy, short sale or even a lawsuit. We consider this to be one of our many strengths; we always do our best to make sure we have an effective contingency plan in place.
How a California Loan Modification Lawyer is Qualified to Help
If you find that you are facing this type of scenario, it is crucial that you contact an experienced California loan modification attorney as quickly as possible. It may be tempting to talk to either a foreclosure relief company or a real estate agent, but the truth is that this could be an extreme error. These professionals are simply unqualified to handle scenarios such as this; you need a legal professional who can walk you through the process and guide you through all of the different legal options that are available to you. At the Law Office of J. Arthur Roberts, we know how much is on the line and we are prepared to do everything possible to helping our clients find the light at the end of the tunnel. We are located in Newport Beach, but gladly provide our debt relief services to residents throughout the entire state of California.
At our firm, we know that there are countless different voluntary loan modification programs – almost no two are completely alike. It is important to know that in almost all scenarios, loans will be owned in a pool by a trust and will not be handled by the agent who you are personally dealing with. Instead, there will be an agreement between your agents and the truth, known as a PSA. This is used to limit the amount of loans which are permitted to be modified at any given time – usually, the amount of capped at a mere 5 percent. It, however, is important to note that if you are facing a bankruptcy or a lawsuit of any kind, it is not unlikely that an exception will be made and the 5 percent restriction will be temporarily lifted.
In most scenarios, servicing agents who you are dealing with are understaffed. They are overworked and simply do not care in your personal scenario. It is their job to make money – this is usually done in ways that you would expect; for example, off of late fees, as well as any costs or penalties that will be incurred if you end up in default. Should your property end up in foreclosure, it isn’t the responsibility of the service agent – it is the problem of the trust that they’re working with. Therefore, it is not unheard of for mistakes to be made in the loan modification application process. Things can fall through the cracks, get forgotten about or errors in general can happen – all while foreclosure looms closer and closer. Homeowners are often left to simply wring their hands & wait, which can leave them with no time to act if the modification is denied. Having a Plan B is therefore crucial while you are waiting for the modification to be approved.
All too often, a loan modification process can become severely complicated – especially if more than one company is involved. For example, just because a first mortgage company agrees to modify your loan, it does not necessarily mean that the second will fall in line. This is especially true if there is not the added pressure of a looming lawsuit or bankruptcy filing. In most cases, the modification will not affect the amount of the principle balance and they will almost never adjust it below the actual value of the property. More likely, they will adjust the interest rate and the recapitalization of the back payments. In an ideal situation, you will be lucky to have a fixed rate amortized over a 30 year payment with a reasonable rate. Even if you are lucky and have the lender cancel your debts, it doesn’t mean that you no longer have to worry about them; the IRS may still classify it as taxable income, regardless of the new Mortgage Forgiveness Debt Relief Act of 2007.
Why You Should Hire a Debt Relief Attorney in California
As you can see, the loan modification process is anything but simple, and it is crucial that you have an experienced legal professional on your side who is looking out for your best interests. At our firm, we are well aware that there are lenders and servicing agents who could easily take advantage of you and your best interests. We are therefore dedicated to defending you and fighting for an optimum outcome on your behalf. If you have questions or if you would like to discuss your situation with an attorney, we encourage you to contact us immediately. We hope to hear from you soon.
Disclosure to Borrower required by CA Civil Code 2944.6
It is not necessary to pay a third party to arrange for a loan modification or other form of forbearance from your mortgage lender or servicer. You may call your lender directly to ask for a change in your loan terms. Nonprofit housing counseling agencies also offer these and other forms of borrower assistance free of charge. A list of nonprofit housing counseling agencies approved by the United States Department of Housing and Urban Development (HUD) is available from your local HUD office or by visiting www.hud.gov.