Tips, Hints & Suggestions
1. Who is this "Investor" they're talking about?
When I'd get told why there were certain requirements or try to get information about timelines or criteria, whomever I was speaking to would invariable invoke "THE INVESTOR," which always sounded like they were referring to in all-caps awe. Took months before I figured out they were talking about the entity that actually owned my mortgage loan, the company to which Wells Fargo sold the loan and for which Wells Fargo is servicing the loan. (That was news to me - Wells Fargo originated my mortgage and I had no idea it had been sold.)
In my case, "THE INVESTOR" is Freddie Mac. Knowing that was relevant because it determined which division of Wells Fargo's Loss Mitigation Dept. I was assigned to and it gave me another place to research for information about criteria and timelines for the mortgage mod review process. For example, find Freddie Mac's servicer guidelines linked in the center column as AllRegs.
Not sure who owns your mortgage loan? Apparently that information is something of a secret for some reason. But there are a couple of resources you can use to find out. You can check Fannie Mae's loan lookup and Freddie Mac's loan lookup.
If your loan is owned or guaranteed by Fannie Mae or Freddie Mac, stop right now and read page 2 of this document before you go on. This testimony of two foreclosure lawyers details how the government is helping Fannie Mae and Freddie Mac steal your house. Like I say below, the decks are stacked against you. Bigtime!
If you do decide to go on with a mortgage foreclosure attempt, you'll likely be told over and over again that the servicer unfortunately just can't do any more to secure your modification because THE INVESTOR's guidelines don't allow them to. Turns out that might be just another big, fat lie.
When Denying Loan Mods, Loan Servicers Often Wrongly Blame Investors
BofA Blames Investors for Lack of Loan Modifications, But Evidence Points Elsewhere
Loan Modification Restrictions in Subprime Securitization Pooling and Servicing Agreements from 2006
Resources for Investigating Investor Restrictions on Mortgage Modifications
Or, the stories above might be just spin and the lies and obfuscation might just flow down from the investor to the servicer. I have found that to be the case with the owner of my loan, Freddie Mac.
What can you do? Find out what the servicing agreement between your "investor" and the servicer says so you at least know what the servicer is supposed to be doing and what the lender should be requiring. (Search for it online.)
2. The Deck is Stacked Against Borrowers and For Lenders
We know this, right? Big business exists to serve itself and more and more it seems the government, federal and state, exists to serve big business. The common folk get the shaft while the politicians play power games and the corporate executives build up their offshore bank accounts. (This CNN story is over a year old, but describes exactly what's still going on!)
Well just because the economy is in a shambles (thanks to whom?!) and our fearless leaders lend lip service to helping people retain their homes, do not make the mistake of thinking anyone is on your side as you seek to wrest a
mortgage modification from your lender. You're on your own. Tilting at windmills.
Here's an interesting article describing how a Treasury Dept. guideline that appears to benefit homeowners seeking to fend off foreclosure is actually being used by banks to cheat on the system and charge borrowers with outrageous legal fees while booting them out of their homes. How is that right? It's not. Does anyone in power care. Apparently not! Even the FDIC, which we've all come to think of as looking out for our interests providing insurance on the money we have deposited in banks, is in on the fix to help lenders steal our houses and make big bucks on them. This video is absolutely incredible. Doesn't make you wonder what other backroom deals there are that benefit the banks and screw you and me? And why does it seem the government agencies and financial services industry are colluding? Well, where do you think the government gets its officials for Treasury, HUD, FHA and others? From among the top executives at the financial services industries! They're all cronies. They look out for each other. Oh, and don't expect to get your day in court, either. The judicial system has been at least partially co-opted, as well.
"Mortgage relief" program enriches big banks
According to recent startling admissions from top Treasury officials, the mortgage plan was actually not really about helping borrowers at all. Instead, it was simply one element of a broader effort to pump money into big banks and shield them from losses on bad loans.
HOMEOWNERS = LOSERS and LENDERS = WINNERS
Remember that lenders have no care for the homeowner. They may tell you they are loving and kind in their brochures and the employees working in the lobby may have a heart for the homeowner, but these are not the people making the final decisions. The final decisions are made by wealthy investors who have achieved power simply because of the amount of money
3. Trial Modification - not the panacea you think it is
Yeah! You've finally waded through the morass of the initial review and been notified you were approved a trial modification. Your troubles are over, right? Wrong. The lenders have managed to subvert this part of the proces, too. Under HAMP, the procedure seems simple enough. Your bank assigns you that lower mortgage amount you have been hoping for and just requires that you pay the amount on time for three months. It's touted as the bank's way of ensuring you can afford your modified mortgage.
What it really is, is another way for them to jerk you around. Here's the common story - you make your reduced payment on time for three months, but at the end of that period your bank decides, without telling you why, to extend the trial modification beyond the three months specified in HAMP. You make those payments - two or three more - on time, too.
Then your bank notifies you that you haven't qualified for a permanent modification, even though you have met all the stated conditions. (That's called, I believe, breach of contract and is the subject of a whole bunch of class-action lawsuits, including this one against Wells Fargo.)
If they give you a reason, it's probably that old chestnut, "you failed to provide the required documentation on time." Never mind that they didn't ask for any documents or set a timeline for any to be submitted. You're kicked out of the program. And, oh, by the way, you have 10 days to pay your back mortgage payments - the amount you originally owed minus your "modified" amount along with late fees for all those months (even though you were paying the amount the lender told you to pay.) And you have to come up with it in one lump sum or, you guessed it, you'll be foreclosed on in 21 days (thanks to modification-concurrent foreclosure processes.) Yep, one more piece of the scam. Then, you find out that all the while you've been dutifully paying the reduced mortgage amount set by the bank, that very same bank has been reporting to credit agencies that you are delinquent on your mortgage. Nice touch, huh?
Parallel Foreclosures blog
Mortgage rescue: Credit score killer
Gov’t Loan Mod Program Leaves Some Homeowners Worse Off
Why Making Trial Mortgage Modifications Permanent Is So Difficult
Ruling may ease loan modification runaround for homeowners facing foreclosure
4. Do your homework
You'll need to really start to understand the modification process, both the "intended" process spelled out in Treasury directives and your investor's servicer guidelines
and your own servicer's particular perversion of these rules. The directives and guidelines are written as if to actually create a situation in which borrowers receive loan modifications and keep their homes. The servicers are doing everything they can to prevent that very thing from happening. Therefore, as stated before, they will withhold information you should have or outright lie to you. To even ask useful questions, and to guage the veracity of the answers, you need to have some knowledge of the answer before you ask it.
For example, instead of waiting for the servicer to spend months piddling around to tell you what you modified mortgage might be (or more likely to tell you they've decided that you can't afford any modified amount), you might try telling them from the outset what you feel you can handle. You'll need to learn how mortgages are amortized and use one of the many useful online amortization tools to help you.
How to calculate mortgage payments for a home
Because declaring bankruptcy might be part of the picture here, I have been collecting bits and pieces of information about how foreclosure, mortgage modification and bankruptcy interconnect.
5 Bankruptcy Myths Debunked
Bankruptcy Comes With Social Stigma
Can HAMP Help in Bankruptcy?
1. Stop Foreclosure
A little fact that most people don't know is that if you file an emergency bankruptcy petition, you receive an automatic fifteen-day stay on your foreclosure. It's a borrower's Hail Mary. For fifteen days, the bank cannot foreclose your house, and you have those two weeks to either withdraw your application or complete your bankruptcy. But timing is key. If your foreclosure is scheduled for 9 a.m. and you file the petition at 9:05, you are officially out of luck. If you file at 8:59, then you are saved.