Loan Deals: News

Its hard to do research on companies when you are about to lose your home. Common sense would tell you not to trust a company that copied the name of a government agency. That’s what a westland family failed to realize when they signed up with Hope Now Modifications, LLC – probably thinking it was HOPE NOW.

In a recent survey of advertising, the Federal Trade Commission found 71 companies running suspicious ads related to loan modifications or foreclosure rescue.

Hope Now Modifications LLC of New Jersey was shut down and its assets frozen in March. It used a name that mimicked the legitimate Hope Now Alliance, a coalition of trade and industry groups.
But that was too late for the Boyds, who are days away from losing their home.

Dan Boyd is now trying to work directly with his lender, Chase Home Finance LLC, to modify his $1,330 monthly mortgage payment for the three-bedroom brick home.
 

Loan Modification

The Ventura County DA is warning people that if they are facing foreclosure , chances are they will be or have been contacted by people offering to “rescue” them - but many times these loan modification companies are fraudulent and often times illegal.

The advisory recomends that if you are facing foreclosure and are looking for a loan modification, the best way to go about it is to do it yourself.

You can read the advisory here

Loan Modification

Recently we have seen more articles of local and state goverments going after people who are operating loan modification scams. This article comes by way of a tampa newspaper, from what we have seen, Florida is being hit harder then california by these loan modification scam artists. This is very suprising since the problem was created by Orange County california based companies.

It is one of more than 50 such investigations now underway in Florida, which ranks second nationally in foreclosures.

“The time is ripe for disreputable companies and individuals to capitalize on consumers’ financial concerns,” said Attorney General Bill McCollum, “and foreclosure rescue fraud is one of the worst manifestations of the current economic situation.”

As the St. Petersburg Times reported last fall, Rechnitz, 62, told homeowners that investors would buy their houses, make the payments and stop the foreclosure proceedings. The sellers could then rent back their homes with an option to repurchase them in two years.

Everybody seems to agree, either go with a not-for-profit that is govermement sponsored, or do the loan modification yourself.

Loan Modification

California implemented a new foreclosure moratorium on Monday to goad banks into modifying mortgages for struggling homeowners.

The California Foreclosure Prevention Act, signed by Gov. Schwarzenegger in February, adds 90 days onto the time period between when homeowners default on a loan and when their home can be repossessed in foreclosure. Banks can avoid the 90-day holdup by having a comprehensive program in place to make mortgages more affordable by reducing the interest rate, extending the loan term, or reducing or deferring some of the principal. Such programs must be approved by regulators.

“The goal is to compel banks to do systematic loan modifications across California to reduce our foreclosure rate, which is the highest in the nation,” said Assemblyman Ted Lieu, D-Torrance, who wrote the bill. “Until we slow that down, the California economy cannot recover.”

Experts said the California initiative should complement the Obama administration’s foreclosure prevention plan, which offers financial incentives to servicers who complete loan modifications.

“This law is most useful as a stick to supplement the Obama administration’s carrots to get loan servicers to adopt a much more systematic framework for doing loan modifications,” said Paul Leonard, director of the California office in Oakland for the Center for Responsible Lending. “It is a useful nudge to get more servicers to sign contracts to adopt the Obama modification plan.”

In the past few months, 15 servicers have agreed to implement the Obama plan, according to the Web site MakingHomeAffordable.gov. Government spokesmen have said that about 100,000 homeowners nationwide have been sent offers for trial modifications, a relatively modest number compared with the administration’s goal of helping 3 million to 4 million homeowners avoid foreclosure.

In California, the Department of Corporations will determine whether banks qualify for an exemption from the moratorium. About a dozen servicers had applied as of last week, said department spokesman Mark Leyes; they will now have a 30-day grace period while their applications are reviewed. A list of the participating banks will be at www.corp.ca.gov.

Leyes said the department will monitor the servicers’ success rate regularly, not just accept their word that they have a program in place. Still, he added, “There is no guarantee in the law or anywhere else that anybody is going to get a loan modification. What we’re looking for is a good-faith effort on the part of the servicer to do what they can to make the loan affordable and sustainable for the homeowner.”

The California law, like the Obama plan, says that servicers can determine whether a foreclosure or a loan modification is more cost-effective and can pick the cheaper option.

Dustin Hobbs, a spokesman for the California Mortgage Bankers Association, said lenders generally do not like moratoriums because they haven’t worked in this past, but they are taking a wait-and-see attitude toward the new California law because it includes a pathway for banks to avoid the delay.

“Because there is so much similarity between some of the provisions and requirements in this law and the new programs at the federal level, my guess is that a lot of the larger servicers will have no trouble qualifying,” he said.

In September, California implemented another law that required servicers to make more efforts to contact homeowners before foreclosing. That law caused a dip in the number of foreclosure filings throughout the fall months, but they have resurged this year now that lenders have caught up with the requirement.

Loan Modification

In his filing, Cuomo accused Amerimod of illegally charging upfront fees and producing misleading advertising sent to homeowners facing foreclosure. His office also issued subpoenas to 13 other loan modification companies, for information on fees, contracts and marketing.

The announcement comes a week after Newsday stories showed a loan modification industry on Long Island that promises to negotiate with homeowners’ banks to modify loan terms on troubled mortgages. Some companies charge thousands of dollars in fees, often upfront.

Cuomo’s effort, combined with proposals for expanded regulation, could mean a smaller loan modification industry, said housing counselor Joan LaFemina of the Community Development Corp. of Long Island.

“My hope is that the people who stick with it really have integrity, but knowing the industry the way it is, there will always be those who operate under the radar and take advantage of the situation,” LaFemina said.

Cuomo’s comment that the industry is a scam is “a great insult,” said Joseph Romano, office manager at Farmingdale-based National Modification Service, which was not been cited by Cuomo. “I stop foreclosure auction sale dates that normally would not be stopped if the client tried on their own.”

Pane said he is following state laws.

“We have always done whatever the attorney general has requested of us and continuously work with them to stay in complete compliance,” he said.

Besides Amerimod, Cuomo subpoenaed five area firms: Nationwide Modification Agency in Hauppauge; Global Modifications Inc. and the Law Offices of Brett Margolin in Ronkonkoma; Loan Modification Affiliate Exchange, or LoanMAE, in Oceanside; Hometown U.S.A. in Plainview; and CloseMore Financial Corp. in New Hyde Park.

Hometown U.S.A. owner Judy Boggio said she stopped doing loan modifications last fall and Global Modification executives told Newsday they changed their practices. The other firms did not return calls for comment or had nonworking phone numbers.

Loan Modification

Starting today, banks in California cannot foreclose a mortgage without either renegotiating the loan or giving the homeowner three months notice.

There have been more than 365,000 foreclosures in California since 2007, with many more already scheduled.

“California is ground zero for foreclosures. We’re getting about 80 to 90,000 foreclosure filings every month. That’s one every 30 seconds, so until we start mitigating the number of foreclosures, our economic recovery is going to be hampered,” said Assemblyman Ted Lieu, the Torrance Democrat who authored the bill.

Even supporters acknowledge the California Foreclosure Prevention will not prevent thousands of additional foreclosures.

But Lieu said it was an important step towards a systematic review of delinquent home loans. Lenders would have to demonstrate they had tried to modify the loan.

If the bank does not renegotiate, the home owner still has 90 days until the bank can take the house. That warning period, Lieu said, will grant at least some people having trouble with a mortgage the opportunity to come up with other options on their own.

The bill passed in February is similar to the Obama administration’s Making Home Affordable Program that began in March.

Both encourages lenders to cut interest rates or rewrite loans to affordable levels.

Loan Modification

Millions of homeowners are struggling to pay their monthly mortgage payments and risk losing their homes in foreclosure.  A bad economy, difficult mortgage loan terms, and decreasing home values have all contributed to this bad situation.  The federal government and lenders have stepped in to try to provide solutions.  Foreclosure is not only bad for borrowers but lenders as well.  The foreclosure process is very costly for lenders and it is hard to recover the amount owed on the loan through a foreclosure auction or short sale.  A hardship loan modification may be offered to borrowers who are facing a financial or personal hardship to avoid foreclosure for both the borrower and lender. 

A hardship loan modification involves modifying the loan terms to make the payments lower.  This is designed to help borrowers facing hardship the ability to still make their monthly mortgage obligations with reduced payments.  This can be accomplished through extending the length of the loan, lowering the interest rate, changing the loan from an adjustable rate mortgage (ARM) to a fixed rate mortgage, or in some cases even some principal forgiveness.

A borrower who is seeking a loan modification must demonstrate that they are suffering from a hardship that makes it difficult for them to make their monthly mortgage payments.  There are several hardship situations that a lender might find acceptable.  Some of these include loss of a job, a reduction in income, divorce or death in the family, military service, a major illness or high medical costs, as well as job relocation.  There could be other situations that qualify as well.  Each individual borrower’s situation is different, and each lender has different criteria that they use to determine hardship cases.

The way a borrower demonstrates their hardship is through writing a hardship letter that is part of the loan modification application.  The borrower needs to write a brief but compelling letter that explains their hardship and their willingness to correct their situation.  A borrower should be honest and to the point in the letter and provide back up documents if necessary such as divorce papers, copies of medical bills, or any other documents which will bolster their hardship case.

The federal government has responded to these tough economic times and is strongly encouraging lenders to offer loan modifications to homeowners facing hardship situations.  In fact the federal government has recently rolled out the $75 billion Homeowner Affordability and Stability program.  Under this program the federal government will actually pay lenders $1000 per loan modification they offer.  If you are a struggling homeowner facing a hardship, a loan modification may be just what you need to help get you back on track and save your home from foreclosure.

Loan Modification, Mortgage

WASHINGTON, D.C. - June 10, 2009 - (RealEstateRama) — The Federal Trade Commission has filed a civil contempt action charging a deceptive mortgage foreclosure rescue and loan modification operation with violating a 2001 court order. Many homeowners paid the defendants up to $5,500 in advance and ultimately lost their homes to foreclosure. The FTC has asked the court to halt the unlawful practices, freeze the defendants’ assets, and seek compensation for victims.
According to papers the FTC filed with the court, the defendants told consumers that they would stop foreclosures. They claimed they were “100% successful and had never lost a customer’s home to foreclosure” and advised consumers to pay them instead of making mortgage payments. They also claimed that they would negotiate modified mortgages with lower interest rates, monthly payments, and principal balances. The FTC charged that, in fact, they obtained few, if any, loan modifications for customers.

The defendants also claimed that their selectivity in choosing customers helped them succeed, but they took on nearly every consumer willing to pay, according to the FTC. In addition, the defendants falsely claimed that they would provide experienced real estate attorneys who would represent customers nationwide, and would review consumers’ home loan documents to look for fraud and other lending violations.

According to the FTC, Bryan D’Antonio and three companies he controls, The Rodis Law Group Inc., America’s Law Group Inc., and The Financial Group Inc., doing business as Tax Relief ASAP, violated a 2001 order that banned D’Antonio from telemarketing and misrepresenting material facts about goods or services. The FTC obtained the order against D’Antonio and his former company, Data Medical Capital Inc., for operating a work-at-home medical billing opportunity scheme. D’Antonio pleaded guilty to mail fraud for his involvement in the scam and served almost three years in prison.

The FTC also has asked the court to permanently ban D’Antonio from selling mortgage products or services, including foreclosure prevention and loan modification services, and to renew the 2001 order’s provisions banning D’Antonio from selling business ventures, employment opportunities or work-at-home opportunities, and from telemarketing.

For more information about this matter and to learn how you can get free loan modification assistance from counselors certified by the government, call toll-free at 1-888-308-0934.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

Loan Modification