California Loan Modification Attorney\Broker
(Effective October 11, 2009 The Law Office of J. Arthur Roberts complies with SB 94)
Loan Modification is NOT A LEGAL RIGHT as a result of the U.S. Senate’s decision to continue to exclude primary home loans from Bankruptcy Modification at the urging of big BANKS. The game is RIGGED; therefore, you need the knowledge and experience of the Law Office of J. Arthur Roberts to overcome your financial distress.
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 HOME AFFORDABLE MORTGAGE PROGRAM (“HAMP”) was introduced, less than ten percent of the 9 million applications were even considered, let alone approved. After 4 years and increased government scrutiny, the numbers have improved somewhat but only after thousands of borrowers have been abused.
Looking into Whether a BANK Has Done Something Wrong
The HOMEOWNER BILL OF RIGHTS (“HOBR”), enacted January, 1 2013, actually has some legal teeth. If you have already attempted 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 a violation of any kind. A HOBR violation allows you to seek an injunction from a judge to STOP your foreclosure sale and overturn a Notice of Default or Notice of Trustee Sale. The HOBR even allows for minimum damages of $50,000.00 is your home was wrongfully sold. By hiring the Law Offices of J. Arthur Roberts, you will get the chance to audit the loan modification process pursuant to the new HOMEOWNER BILL OF RIGHTS (“HOBR”). Side note: Despite the hype, auditing the original loan documents themselves is usually a waste of time. Statute of limitations problems and borrower and broker joint liability for misrepresenting income or assets is often a reason not to waste money on this approach.
Our firm strongly believes that the chances of success with any given loan modification will increase substantially if you understand that Loan Modification is a math problem: Once your LOAN SERVICER gets around to reviewing your loan mod application, it’s important to understand how they think. To get a loan modification, you must convince the LOAN SERVICER that re-investing in you, for up to 40 years, is a better investment than foreclosing on the property and re-investing the cash back into the market for 40 years. In essence, you are competing against the long term value of foreclosure investment option. The loan mod you can afford must be a better deal for the BANK than foreclosure. This requires the bank to make 34 assumptions in order to determine the NET PRESENT VALUE (“NPV”) of the two re-investment options. Property value, your income and your credit risk are key factors that go into the decision. Contact our firm for an honest review and assessment of your loan modification.
If there is the threat of litigation of bankruptcy, your chances for fair consideration substantially improve. We therefore encourage you to hire an attorney who can help you understand and solve your financial situation. We know that fair loan modification consideration 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. Don’t give up just because you’ve been denied. You can re-apply and improve your chances by consulting with the Firm.
Why is the Loan Modification process so difficult?
You need access to this Firm because the system is seriously flawed and designed to benefit the BANKS, not you. The truth is that an INVESTOR, not the LOAN SERVICER loses money when a foreclosure happens. As LOAN SERVICERS, CHASE, BANK OF AMERICA, GMAC, CITIBANK and WELLS FARGO make TRIPLE the normal servicing fees each month you are in default. These LOAN SERVICERS have an incentive to make the process as long as possible and maximize their fees before modifying or foreclosing. The LOAN SERVICER handles the collection of the future mortgage payments and passes the money back to the INVESTOR while charging a fee of .25-.50%. But all the risk of loan default and foreclosure loss is shifted to the INVESTOR. When a borrower defaults, the LOAN SERVICER fees sky rocket and your loan balance grows.
There is an inherent conflict of interest between the LOAN SERVICER (the Bank that you THINK owns your loan) and the INVESTOR. From 2000 to 2007, 95% of new loans were sold of “securitized” into mortgage pools of 3,000 to 5,000 loans, typically worth $300Million up to $1.2Billion. The Bank or Lender who gave you the loan was paid off within 90 days of your signing but stayed on board as the collector or LOAN SERVICER. The INVESTOR, often a group of pension plans, insurance companies, hedge funds or government fund the purchase of the loan pool (a Mortgage Backed Security Trust, typically ‘owns” the pool).
The LOAN SERVICER gets paid no matter what and before the INVESTOR realizes the huge losses. This system of faulty securitization allowed BANKS to write risky loans, and then pass the risk on to unsuspecting INVESTORS. Like borrowers, INVESTORS get screwed too: they relied on bogus Investment Ratings by MOODYS and STANDARD and POOR which were paid for by the BANKS. No one told them that the Mortgage Pool was filled with bad and risky loans. Since the mass loan defaults began in 2008, the big Banks, as LOAN SERVICERS, have further exploited the system to make massive profits from slow loan modification processing and foreclosure. No matter what you’ve been told, the simple truth is that these BANKS have one goal and one goal alone – to make money. Welcome to casino-style capitalism: an unfair system where BANKS make money no matter what.
Notwithstanding the government’s weak attempt to mitigate the problem through the HOME AFFORDABLE MORTGAGE PROGRAM (“HAMP”) beginning in 2009, the simple truth is that LOAN SERVICERS processing practices have only marginally improved. LOAN SERVICERS are severely understaffed, negligent, prone to errors and arrogant and simply indifferent to your struggles for a reason: They make more money the longer you remain behind on your mortgage payments. Because under HAMP, the LOAN SERVICER decides who qualifies for modification and who does not, SERVICERS act in their own financial interest.
All about Front Door Loan Modifications…to start
Once you understand the income sweet spot for loan modification, you have to try and try again. You don’t want to waste money on pointless litigation or sue prematurely until you’ve exhausted the less expensive options. Even if a violation does not exist, it is possible that you will be able to secure a loan modification without suing. 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. If we mutually agree to negotiate or arrange your loan modification, we will not charge you an advance fee. 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. 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 guidelines of the Loan Mod versus the Foreclosure re-investment analysis. Loan Modification law relates to fair consideration only; there are no laws which guarantee that you will receive a Loan Modification. You need the right income and typically no equity to get a Loan Modification. 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 think you clearly qualify; there is no law that states that the Loan Servicer has to accept. If they can make more money over 40 years by denying your Loan Modification, they are well within their rights to do so.
At our firm, we operate on the belief that somewhere along the line; the lender will mess up and violate HOBR. 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. Then deny your application and so as to maximize their fees. We make sure that they comply with HOBR. We consider this to be one of our strength; we always do our best to make sure we have an effective contingency plan in place.
The key is pre-planning your strategy and reacting to LOAN SERVICER’s decisions. You must be prepared for Plan B if you are denied a Loan Mod. Do you need to buy time to get your income to the “sweet spot”? When should you re-apply? Should you file a bankruptcy…or two? Are you liable for debt or income taxes if you get foreclosed upon? Should you sue the LOAN SERVICER or the TRUSTEE? Should you temporarily pursue a Short Sale? When should you file a Lawsuit? What are the credit reporting effects? Is the cost for each option within your budget?
So why work with the Law Office of J. Arthur Roberts?
By getting such an Attorney\Broker on your side, you won’t get burned again once you’re back on top. We are the ultimate one-stop shop for all things Law, Loan and Real Estate even after we get you through your Financial Distress. While the challenges described above might make you think that there is no point in hiring an expert, this could not be further from the truth. Banks and Brokers will continue to try to take advantage of people. To that end, we are much more than a Law Firm: Attorney Roberts holds an MBA, is a Real Estate Broker and a Mortgage Loan Originator. As such, the Firm understands all aspects of Law, Loan and the Real Estate Business. The Firm will help you through this crisis and then continue help you with all of your Real Estate and Loan needs in the future. By getting such an Attorney\Broker on your side, you won’t get burned again once you’re back on top.
The Debt Relief Attorney\Broker Most Qualified to Help
If you find that you are facing this type of scenario, it is crucial that you contact an experienced Attorney\Broker 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. Even just a run of the mill bankruptcy or litigation Lawyer is not enough. 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.
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 low fixed interest 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. As you can see, the loan modification process is anything but simple, and it is crucial that you have an experienced legal\real estate 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.
Understanding the CAUSE of the MORTGAGE MELTDOWN
and why it will happen AGAIN
As citizens, our relationship with the Banks and our Government is damaged. The Mortgage meltdown is the direct result of the failure of our Government to regulate the “too Big to Jail” Banks, credit rating agencies and mortgage brokers in our best interests, rather than theirs. Our Governments’ failure to play this vital role in ensuring a fair system of capitalism…is ultimately OUR failure. We have now lived through the consequences of ignoring our civic responsibility to participate in democracy and strive to understand complex financial issues that have profound effect on our daily lives. Much thanks to Professor Campbell for his efforts in promoting financial literacy.
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.
