Schwarzenegger-Banks Must offer Loan Modifications

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homebroker@sbcgl

2135 Posts

Posted - 07/10/2008 : 09:08:12 AM

Mortgage lenders must contact California home borrowers to discuss loan modifications by phone or in person before entering foreclosure proceedings under a new law Gov. Arnold Schwarzenegger signed Tuesday.

Senate Bill 1137, which takes effect immediately, prohibits lenders from filing a default notice until 30 days after contacting a borrower or making legitimate attempts to do so. The law by Senate President Pro Tem Don Perata, D-Oakland, also requires that tenants receive 60 days' written notice to vacate a property once it is foreclosed.

"Losing a home to foreclosure is a financial and also an emotional crash that takes sometimes years to overcome," Schwarzenegger said. "Foreclosure not only devastates families, but it hurts neighborhoods and it depresses our economy and our budget, and we lose a lot of jobs, of course."

http://www.sacbee.com/111/story/1069360.html

darkstar

16014 Posts

Posted - 07/10/2008 : 09:14:44 AM

I'll go with this one, although you would think lenders would do this just to reduce losses...I'm sorry, that's good business practice, let's see how it plays out...

mortgagemessiah

7911 Posts

Posted - 07/10/2008 : 09:15:28 AM

That's actually a great idea. LOgically, you would think the banks would want to do it voluntarily. I could never figure out why they don't want to.

Captain Mortgage

1429 Posts

Posted - 07/10/2008 : 11:01:08 AM

quote:
Originally posted by mortgagemessiah

That's actually a great idea. LOgically, you would think the banks would want to do it voluntarily. I could never figure out why they don't want to.

You are exactly right!! In the majority of cases they do want to do it. The problem is that their contact ratio for people behind on their mortgage is about 7-9%. That is one of the reasons so many loss mitigation companies are doing so well.

neversaynever

1022 Posts

Posted - 07/10/2008 : 11:02:36 AM

I'LL BE BACK......FOR YOUR HOUSE!

808

1976 Posts

Posted - 07/10/2008 : 11:05:05 AM

Modify the loans or it's ASTA LA VISTA to your cushy bank job baby.

mojojojo_1

674 Posts

Posted - 07/10/2008 : 12:53:56 PM

What about the mortgage servicing companies? did they try, i heard they sux

mganovsky

1739 Posts

Posted - 07/10/2008 : 12:55:38 PM

That does not mean a thing. Country Wide who is headquarted in Cal did this to a person recently ( I posted a thread on it a couple of days ago, and now have all details).

She was on a 2/28 Arm; the ARM reset last Jul. New Int Rate was 3 points higher, so she called C/W to try and get Modified into a lower rate and Fixed term.

She was told that she was speaking to there loss mitagation Dept. The Rep told her "no Problem" but you have to be behind in your mortgage in default before we can help you; so stop making the payments.

Unfortunetly she stopped making her payments.

Then she checked in with them on a regular basis, and was told that the process will take months and to just hold on.

In Nov 07, she contacted them again, and was told that every thing looks good.

Then 2 days after that she received a letter saying she was declined.

So she called C/W again, and was told that they would relook at it and get back with her.

She was then refered to the Country Wide Home Retention Team.

She checked in with them weekly, each time talking with some one different; with a different accent each time.

The she received a foreclosure notice with a sale date of 3 Mar 08, she immediatly called C/W again and was told don't worry about it we are processing your modification request.

The day before the sale she contacted C/W who told her that she could get it out of foreclosure if she paid $3000 that day to postpone the sale so that C/W could process her modification request. So she did.

Last week she recieved the modified loan docs from Country Wide and was shocked.

The Int Rate was 10.63% on another ARM,which is more than what she was paying after the reset and C/W also wanted her to send in another $1000 with the loan docs to cover the cost of the loan modification.

She should have contacted me or some one prior to home going in to foreclosure. I wanted to go FHA but can not because of the 1 year requirement for the redeamed foreclosure.

And this happenned in his home State. So do you really think the lenders are going to try and help folks.

Many of them can not, they are just servicing the loans for the investors so it is not there choice on whether to modify the loan or not.

ritabradley01

2323 Posts

Posted - 07/10/2008 : 1:03:27 PM

I'm sure not all lenders are as bad as countrywide. Let's hope not-geez.

808

1976 Posts

Posted - 07/10/2008 : 1:29:44 PM

quote:
Originally posted by ritabradley01

I'm sure not all lenders are as bad as countrywide. Let's hope not-geez.

your right TBW, Flagstar and Wells Fargo (save Home Equity division) were much more conservatively run w their focus being more on common sense UW than mkt share and Option Arms. That's probably why their still in business and the First Magnus's, ABConduits and Indy Macs aren't

Captain Mortgage

1429 Posts

Posted - 07/10/2008 : 1:35:38 PM

quote:
Originally posted by mganovsky

She was told that she was speaking to there loss mitagation Dept. The Rep told her "no Problem" but you have to be behind in your mortgage in default before we can help you; so stop making the payments.

Unfortunetly she stopped making her payments.

mganovsky

1739 Posts

Posted - 07/10/2008 : 1:41:40 PM

Maybe so Joel just passing on what she told me.

But this was the time when the FHA Secure came about, and you have to be in defualt for the FHA Secure; so maybe C/W was thinking about refinancing her using the FHA Secure.

Also if you try to call C/W all you get is some Rep from a foreign country, that you can not understand.

Either way they strung her along for almost a year then modified her loan into an ARM not a fixed rate and at a much higher rate than she was paying.

mojojojo_1

674 Posts

Posted - 07/10/2008 : 1:48:58 PM

Captain Mortgage

1429 Posts

Posted - 07/10/2008 : 1:56:28 PM

quote:
Originally posted by mojojojo_1

I call Bull **** on this. Under no circumstances would any department of a bank ever tell someone to stop making their payments. I believe they told her that they are only helping people who are behind or in default. After that she thought she would be slick and stop making her payments

i call true, but you would think she would make a payment after just missing one. god knows a whole year or so of non payments should not have happened

Or how about putting the money from the missed payments into a bank account instead of spending it.

k10602

19 Posts

Posted - 07/10/2008 : 2:06:18 PM

I call Bull **** on this. Under no circumstances would any department of a bank ever tell someone to stop making their payments. I believe they told her that they are only helping people who are behind or in default. After that she thought she would be slick and stop making her payments.

If they did actually tell her that, I would think she has a good lawsuit to work on.

I BEG to differ here - I was working with a couple that also had an ARM and we were trying to refi them and I told them to contact WELLS FARGO and discuss their situation and ask for a delay in the adjustment or see if Wells could help them and the gal there told them "it takes 7 months to foreclose - just dont make your payments and work on your other credit issues and then buy something new...." I was beyond shocked when they told me about it........we did finally get them re-fi'd.

darkstar

16014 Posts

Posted - 07/10/2008 : 2:09:38 PM

quote:
Originally posted by Captain Mortgage

quote:
Originally posted by mganovsky

She was told that she was speaking to there loss mitagation Dept. The Rep told her "no Problem" but you have to be behind in your mortgage in default before we can help you; so stop making the payments.

Unfortunetly she stopped making her payments.

I call Bull **** on this. Under no circumstances would any department of a bank ever tell someone to stop making their payments. I believe they told her that they are only helping people who are behind or in default. After that she thought she would be slick and stop making her payments.

If they did actually tell her that, I would think she has a good lawsuit to work on.

I had a lady quote those exact words 2 days ago, I believe it...

Captain Mortgage

1429 Posts

Posted - 07/10/2008 : 2:17:16 PM

What Bank? What department was the person in? and Was it told to you or a client?

darkstar

16014 Posts

Posted - 07/10/2008 : 2:21:41 PM

quote:
Originally posted by Captain Mortgage

What Bank? What department was the person in? and Was it told to you or a client?

Can't remember, loss mitigation and to client...I have been told this from clients more than once over the last few months, it's being said...

Captain Mortgage

1429 Posts

Posted - 07/10/2008 : 2:51:04 PM

This is unbelievable. This is what happens when you're REO/Loss Mit department is full of $8-10 per hour people

ritabradley01

2323 Posts

Posted - 07/10/2008 : 6:01:18 PM

I've heard of a similar scenario like the one the OP posted. I never asked who the lender was. Perhaps this is not official bank advice..maybe the $8/hr people are just trying to "help".

goodguy1

1572 Posts

Posted - 07/10/2008 : 6:03:55 PM

personally I like the idea. It potentially takes some business away from us, but ultimately is good for the business and people in general.
my .02

homebroker@sbcgl

2135 Posts

Posted - 07/10/2008 : 9:00:07 PM

They don't give a squat, while prices plummet it takes three month to get a BPO and a sign off on a short sale, in the mean time the buyer already closed on a REO down the street the this current listing is down another $50,000. Save on the hourly wage and lose millions on the back end.

quote:
Originally posted by Captain Mortgage

This is unbelievable. This is what happens when you're REO/Loss Mit department is full of $8-10 per hour people

hlawler

110 Posts

Posted - 07/10/2008 : 9:22:22 PM

quote:
Originally posted by Captain Mortgage

quote:
Originally posted by mganovsky

She was told that she was speaking to there loss mitagation Dept. The Rep told her "no Problem" but you have to be behind in your mortgage in default before we can help you; so stop making the payments.

Unfortunetly she stopped making her payments.

I call Bull **** on this. Under no circumstances would any department of a bank ever tell someone to stop making their payments. I believe they told her that they are only helping people who are behind or in default. After that she thought she would be slick and stop making her payments.

If they did actually tell her that, I would think she has a good lawsuit to work on.

I have also had the same response recently from Countrywide(last week). They now require you call their HOPE department. They are not helping clients unless they are behind on their payments and they tell them that. All these clients have demonstrated true financial hardships.

homebroker@sbcgl

2135 Posts

Posted - 07/10/2008 : 9:25:38 PM

Hope Dept, Is Obama involved?

quote:
Originally posted by hlawler

[quote]Originally posted by Captain Mortgage

[quote]Originally posted by mganovsky

I have also had the same response recently from Countrywide(last week). They now require you call their HOPE department. They are not helping clients unless they are behind on their payments and they tell them that. All these clients have demonstrated true financial hardships.

mdiclemente

1002 Posts

Posted - 07/10/2008 : 9:25:56 PM

I would believe this. I heard this "implied" from a bank representative first-hand. He didn't actually say it, but he definately implied it.

ritabradley01

2323 Posts

Posted - 07/10/2008 : 9:54:23 PM

So true, I don't get it. From what I understand taxpayers will have to eat the costs for this stupidity too.

quote:
Originally posted by homebroker@sbcglobal.net

They don't give a squat, while prices plummet it takes three month to get a BPO and a sign off on a short sale, in the mean time the buyer already closed on a REO down the street the this current listing is down another $50,000. Save on the hourly wage and lose millions on the back end.

quote:
Originally posted by Captain Mortgage

This is unbelievable. This is what happens when you're REO/Loss Mit department is full of $8-10 per hour people

Hustler12

1103 Posts

Posted - 07/10/2008 : 10:17:05 PM

quote:
Originally posted by darkstar

quote:
Originally posted by Captain Mortgage

quote:
Originally posted by mganovsky

She was told that she was speaking to there loss mitagation Dept. The Rep told her "no Problem" but you have to be behind in your mortgage in default before we can help you; so stop making the payments.

Unfortunetly she stopped making her payments.

I just talked to someone today who was told that they couldn't mod because they were current, so they skipped a payment and called back to be told that they didn't qualify for a loan mod anymore. Gotta love it.

Oh - I have a friend who is 5 months down with Countrywide...doesn't even get phone calls for collection on it. Love it. Someone else I know was 12 months down before he heard a word.

I call Bull **** on this. Under no circumstances would any department of a bank ever tell someone to stop making their payments. I believe they told her that they are only helping people who are behind or in default. After that she thought she would be slick and stop making her payments.

If they did actually tell her that, I would think she has a good lawsuit to work on.

I had a lady quote those exact words 2 days ago, I believe it...

Hustler12

1103 Posts

Posted - 07/10/2008 : 10:18:51 PM

Nice reply I just left. I meant to say I heard the same thing as well.

Also, I doubt the lenders are going to offer the best solutions on their own. It will still take some pressure to get them to give bwrs a sqaure deal

Loan Pro

420 Posts

Posted - 07/10/2008 : 11:47:07 PM

Stephen,

You would be surprised at what some of these Loss mit reps are saying over the phone.

I have been told that they will not help the client unless the are delinquent and fall behind on their mortgage payments

I have also been told that RESPA and TILA violation don't apply to the customers loans after the loan has been originated.

I have also been asked by the negotiators what RESPA and TILA means.

I can go on and on with this. But the reality is that alot people working as a Loss Mit negotiator should be required to have some basic knowledge of the mortgage industry and the laws that protect the consumers rights.

quote]Originally posted by darkstar

quote:
Originally posted by Captain Mortgage

quote:
Originally posted by mganovsky

She was told that she was speaking to there loss mitagation Dept. The Rep told her "no Problem" but you have to be behind in your mortgage in default before we can help you; so stop making the payments.

Unfortunetly she stopped making her payments.

I call Bull **** on this. Under no circumstances would any department of a bank ever tell someone to stop making their payments. I believe they told her that they are only helping people who are behind or in default. After that she thought she would be slick and stop making her payments.

If they did actually tell her that, I would think she has a good lawsuit to work on.

I had a lady quote those exact words 2 days ago, I believe it...
[/quote]

hherrm

1340 Posts

Posted - 07/11/2008 : 04:52:14 AM

I also have one that had been told by several people from wamu that they could not help unless he stopped making payments.

I also had another one that called customer service at another lender and on the recording was a message to ask about the 5 year freeze on the interest rate if they had an ARM ready to adjust.

Coronasteve

1434 Posts

Posted - 07/11/2008 : 05:07:19 AM

As another poster commented, I believe it is the borrowers who are inferring something that is not really being said.

The loss mit rep at the lender tells the borrower that "we can't do anything for you until you are late; or until you are 60 days late. Then the borrower infers that they need to go down 30 or 60 and then call back and reapply.

The servicer we talk with are absolutely buried with requests and reviews. They need help.

ppulatie

2209 Posts

Posted - 07/11/2008 : 06:28:56 AM

Beg to differ Steve, but the lenders are telling borrowers exactly that. Wells Fargo is especially bad at that. CW also.

I actually did listen on the line with one client while WF told her that.

quote:
Originally posted by Coronasteve

As another poster commented, I believe it is the borrowers who are inferring something that is not really being said.

The loss mit rep at the lender tells the borrower that "we can do anything for you until you are late; or until you are 60 days late. Then the borrower infers that they need to go down 30 or 60 and then call back and reapply.

The servicer we talk with are absolutely buried with requests and reviews. They need help.

Coronasteve

1434 Posts

Posted - 07/11/2008 : 06:53:10 AM

Pat, the lenders are INTENTIONALLY telling borrowers to go late?

Wouldn't that contribute to make the investors a bit nervous about having the serviced intentionally telling the debtors not to pay?

quote:
Originally posted by ppulatie

Beg to differ Steve, but the lenders are telling borrowers exactly that. Wells Fargo is especially bad at that. CW also.

I actually did listen on the line with one client while WF told her that.

quote:
Originally posted by Coronasteve

As another poster commented, I believe it is the borrowers who are inferring something that is not really being said.

The loss mit rep at the lender tells the borrower that "we can do anything for you until you are late; or until you are 60 days late. Then the borrower infers that they need to go down 30 or 60 and then call back and reapply.

The servicer we talk with are absolutely buried with requests and reviews. They need help.

ppulatie

2209 Posts

Posted - 07/11/2008 : 07:01:59 AM

Probably so. But it is happening. What is worse is that some of these same loss mit people will then tell the borrowers that before they can help them, they must get caught up on the loan, after telling them to get late.

There are no consistent policies within the loss mit departments. It is the Wild West. Anyone can say anything and no one cares. That is because there is no true incentive for the lenders to do mods. Remember, large numbers of these loans are covered by insurance. And the lenders are also expecting the Fed to come and bail them out.

So why should they care?

quote:
Originally posted by Coronasteve

Pat, the lenders are INTENTIONALLY telling borrowers to go late?

Wouldn't that contribute to make the investors a bit nervous about having the serviced intentionally telling the debtors not to pay?

quote:
Originally posted by ppulatie

Beg to differ Steve, but the lenders are telling borrowers exactly that. Wells Fargo is especially bad at that. CW also.

I actually did listen on the line with one client while WF told her that.

quote:
Originally posted by Coronasteve

As another poster commented, I believe it is the borrowers who are inferring something that is not really being said.

The loss mit rep at the lender tells the borrower that "we can do anything for you until you are late; or until you are 60 days late. Then the borrower infers that they need to go down 30 or 60 and then call back and reapply.

The servicer we talk with are absolutely buried with requests and reviews. They need help.

Coronasteve

1434 Posts

Posted - 07/11/2008 : 07:16:41 AM

True, it is like the Wild West. There is no consistency at all between what lenders do on a mod or how fast they resolve it.

That is just ONE MORE thing that contributes to the "Which Mod" company to use, which has had all kinds of variables tagged on it..

quote:
Originally posted by ppulatie

Probably so. But it is happening. What is worse is that some of these same loss mit people will then tell the borrowers that before they can help them, they must get caught up on the loan, after telling them to get late.

There are no consistent policies within the loss mit departments. It is the Wild West. Anyone can say anything and no one cares. That is because there is no true incentive for the lenders to do mods. Remember, large numbers of these loans are covered by insurance. And the lenders are also expecting the Fed to come and bail them out.

So why should they care?

quote:
Originally posted by Coronasteve

Pat, the lenders are INTENTIONALLY telling borrowers to go late?

Wouldn't that contribute to make the investors a bit nervous about having the serviced intentionally telling the debtors not to pay?

quote:
Originally posted by ppulatie

Beg to differ Steve, but the lenders are telling borrowers exactly that. Wells Fargo is especially bad at that. CW also.

I actually did listen on the line with one client while WF told her that.

quote:
Originally posted by Coronasteve

As another poster commented, I believe it is the borrowers who are inferring something that is not really being said.

The loss mit rep at the lender tells the borrower that "we can do anything for you until you are late; or until you are 60 days late. Then the borrower infers that they need to go down 30 or 60 and then call back and reapply.

The servicer we talk with are absolutely buried with requests and reviews. They need help.

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