Author Archive
We are getting more and more calls from people who have decided to give up on the hopes of principal loan balance reduction (we have always told people principal loan balance reductions are like a bigfoot sighting) and instead seek to short sell their property letting the bank deal with the property, especially where the stubborn bank (that got their bailout) refuses to help the homeowner save their home by providing a reasonable and meaningful loan modification.
Now, in the context of shot sales, there are a few things to consider:
(1) Will you be liable for a deficiency judgment (meaning if the lender allows you to sell your home for less than its worth, can the lender come back against you for a deficiency judgment?
We have talked about deficiency judgments in Arizona on one of our other websites: Click here for more general legal information: http://www.arizonadeficiencyjudgment.com/
(2) Are there tax implications involved with the lender forgiving debt owed?
(3) Are you entitled to $1,500 relocation expenses following a short sale under the HAFA (Short Sales Incentives law)?
(4) Do you qualify for HAFA?
We outlined the general qualifications for HAFA and some of the general rules on our HAFA short sale blog which can be found here: http://activerain.com/blogsview/1546150/short-sales-overview-before-and-in-anticipation-of-hafa
(5) Can a forensic loan audit and letter to your lender help assist in them accepting a short sale over forcing you into foreclosure? Do you have any predatory lending violations that you can leverage? Is it better to file a lawsuit against your lender?
We have previously outlined some of the things we look for in an Attorney forensic loan audit on this website: http://vondranlegal.com/2009/08/15/what-is-a-forensic-loan-audit/
(6) What other options might you have if the lender refuses to accept your short sale? Options such as filing bankruptcy or pursuing a deed-in-lieu of foreclosure?
Our Arizona bankruptcy website can be found at www.ArizonaBankruptcyResourceCenter.com
HAMP REPORT CARD IS IN – PARTICIPATING HAMP LENDERS AND LOAN SERVICERS SIMPLY DONT MAKE THE GRADE WHEN IT COMES TO PROVIDING PERMANENT LOAN MODIFICATIONS. IS ANYONE SURPRISED HERE?
First let’s take a look at the official government spin on the progress made under HAMP. You can check out this link here http://www.makinghomeaffordable.gov/pr_03122010.html but let’s post below what it says:
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March 12, 2010 ADMINISTRATION RELEASES FEBRUARY LOAN MODIFICATION REPORT Number of permanent modifications increases by 45 percent WASHINGTON – The U.S. Department of the Treasury and the Department of Housing and Urban Development (HUD) today released February data for the Administration’s Home Affordable Modification Program (HAMP). As of the end of the month, more than one million borrowers were receiving a median savings of $500 each month – a 36 percent median monthly payment decrease. Permanent modifications have been granted to 170,000 homeowners and an additional 91,800 permanent modifications have been approved by servicers and are pending only borrower acceptance. |
WHAT LAWYERS WHO REPRESENT LENDERS AND LOAN SERVICERS REALLY THINK ABOUT YOUR ATTEMPT TO FIGHT TO SAVE YOUR HOME FROM FORECLOSURE
Here is a recent email exchange I had with one of the large lender/loan servicers in regard to asserting my Client’s Truth in Lending rescission rights.
This email allows you to get a little flavor of what the big bad bailed out banks think about helping other people who need a bailout.
HERE WAS HIS EMAIL QUESTION TO ME:
It is a mystery to me why lawyers get involved with clients simply to delay the inevitable. The only reason I’ve been able to fathom is that the lawyer gets paid instead of the bank, while the borrower continues to live in the house. Doesn’t seem like a good way to keep one’s malpractice insurance premiums down.
I’m not suggesting that is what you’re doing here. However, XXXXXXX must protect itself and the loan owner from such pointless shenanigans.
I’m not aware of a new date for the foreclosure sale, but this doesn’t mean that one hasn’t been set……
NOTICE HOW HE SEEMS INTENT ON LECTURING ME ABOUT MY MALPRACTICE INSURANCE AND ASSUMING EVERYTHING IS INEVITABLE. IN HIS WORLD, THERE IS NO TAKING ON THE BANKS, NO QUESTIONING THE BANKS, NO DEFIANCE THAT WILL BE TOLERATED BY THE BANKS, THEY GOT THEIR MODIFICATION BUT HOW DARE YOU TRY TO ASSERT YOUR LEGAL RIGHTS, ESPECIALLY WHERE VALID TRUTH IN LENDING RESCISION RIGHTS WERE PRESENTED AS PROOF TO THIS GUY. HERE IS MY RESPONSE TO THE GENTLEMAN.
XXXXXXXX,
I can appreciate your position here are a few mysteries I am looking for answers to:
(1) Why when banks get bailed out big time, do they act like no homeowner deserves a decent bailout?
(2) Why in all of my cases where I find a bona fide Truth in Lending (”TILA”) violation, does the lender always either (a) deny that the violation exists in the face of attached documentary evidence, or (b) refuse to even respond to a TILA rescission letter?
(3) Why do lenders/loan servicers routinely fail to address the question of who actually owns the loan? Or provide proof of such?
(4) Why do loan servicers routinely fail to respond, or fail to respond in a timely manner, to legitimate qualified written requests under RESPA?
Trial Plan Breach of Contract Demand Letter Provokes a Modification. Click on the link below (actually after you click it you will have to click it again toward the top of the screen) to see a response from one of the loan servicers that tried to play loan modification games with my Client. We wrote a scathing demand letter asking them to produce the note, answer our qualified written request, and answer up for the breach of contract or face up in Court. This financial institution did the right thing and it looks like they are going to keep their promise of modification. Of course, there is one piece of “wiggle room” left as indicated in the letter “we can get close to the original modification offer.” In this business you fight for every inch, and don’t be surprised if this arm-wrestling match isn’t over. For now, looks like a potential score for the good guys!! Keep fighting the good fight people!
Trial Plan Breach of Contract Demand Letter Provokes a Modification
There are Trial Plan Scams and there are loan mod scams……this business has them all
Posted by: | CommentsAN UPDATE ON CALIFORNIA LOAN MODIFICATION SCAMS AND SB 94 – CONSUMERS MUST REMAIN ALERT AND VIGILANT
Well the last year has been pretty crazy in the loan modification business. We have seen lots of companies being shut down by the California Department of Real Estate and California State bar (ex. brokers, attorneys, “attorney-backed” and “attorney-based” law centers and fictional “law groups” etc.) who were found out as being nothing more than scams, shams, and ripoff artists.
Some of the reasons these companies were the subject of cease and desist (or desist and refrain) letters is the following:
They held themselves out as loan modification specialists and loan modification experts when in fact they had no special skill, training, experience, or track record.
They took advance fees without the proper advance fee agreement that received a letter of non-objection from the DRE.
They collected advance fees but failed to properly place funds in a Client trust account.
They failed to properly provide verified accountings as required by the California Department of Real Estate.
They failed to have all of the loan modification advertising approved by the DRE.
They took files that were in notice of default (this applies to the non-attorneys) in violation of the Foreclosure Consultant Law.
The committed other acts of outright fraud, misrepresentation, deceit and false advertising.
In the case of Loan Modification Attorneys they may have illegally partnered with non-attorneys (such as brokers and foreclosure consultants) that would not only tout the attorneys services – taking the form of an illegal runner or capper – but also illegally splitting what could be construed as a legal fee, and engaging in other shady conduct that violates an attorneys code of ethics.
In addition, Post SB94, some entities accepted an advance fee in violation of SB94 which prohibits both attorneys, brokers, and foreclosure consultants from accepting any type of advance fee for loan modification or foreclosure forbearance work.
They failed to provide refunds when their contracts stated they would, or where verbal representations of 100% money back guarantee were given.
Yes, there were a whole lot of callous and cavalier people/companies raking homeowners over the coals for their own personal gain, and without any morals or scruples. I guess you could say there were a bunch of Bernie Madoff’s in the loan modification business.
From what we could tell, the Attorney loan mod scammers often were either the “newbie” Attorneys who had no clue what was going on and didn’t care (and may have had a hard time finding legal jobs in the tough economic climate following law school) and/or 20 or 30 year attorneys who could care less whether or not the State bar stripped their license to practice law (I think some of these attorney violators were racking up so much money, and trying to ship it off-shore for their retirement purposes). In fact, we heard one Southern California Attorney, who was disbarred for his loan modification shennanigans, had over 1,700 loan files that he had charged over $6,000 a piece to help modify their loans (yes, that is about 11 million dollars). This information was relayed to our office by the Federal Trade Commission (FTC) who helped stopped the attorneys scam, and put the joker out of business.
Commercial Advance Fee Agreement For Sale
Posted by: | CommentsOkay, so SB 94 was passed preventing California DRE brokers (and Attorneys and others) from taking advance fees for loan modification and mortgage forbearance work. This has literally run many loan modification companies (both the loan mod scammers and legitimate loan modification companies) right out of business. As loan modifications can take anywhere from 3-15 months to complete, most companies cannot afford to operate financially in this type of environment.
Keep in mind, SB94 only prohibits the collection of advance fees for residential loan modifications. California licensed DRE brokers may start, or continue serving commercial clients in the area of loan modification / loan workouts / loan restructuring. I recently contacted the California Department of Real Estate (DRE) and learned they are still approving commercial loan modification advance fee agreements.
During the early days of the residential loan modification business, I did have the privilege of helping roughly 50+ companies get approved with a DRE approved advanced fee agreement (“approved” really means the advance fee agreement had received a “letter of non-objection” from the department).
During this period, I was also able to get a COMMERCIAL ADVANCE FEE AGREEMENT APPROVED, WHICH AGREEMENT RECEIVED A LETTER OF NON-OBJECTION FROM THE CALIFORNIA DEPARTMENT OF REAL ESTATE.
It is fairly common knowledge that the commercial market lags behind the residential market and will be facing their own financial issues, including the need for loan modification, loan workout, loan restructuring, and short sale work. If you have commercial real estate and commercial loan experience, you may want to investigate the commercial loan modification arena.
If you feel you are a good fit, and want to serve this segment of commercial real estate clients in financial distress, contact us to discuss our previously approved commercial loan modification agreement.
For those of you who have previously tried to draft your own residential and commercial loan modification agreements, and present it to the department for approval, you probably realize what a difficult task it can often be to get your agreement approved. If you make one tiny mistake (and their are lots of potential grounds for denial of your commercial advance fee agreement) you are basically denied and must make the edits, and re-submit the advance fee agreement, costing you lost time, and potential lost sales.
IF YOU ARE LOOKING TO GET INTO THE COMMERCIAL LOAN MODIFICATION MARKET AND SERVED FINANCIALLY STRAPPED COMMERCIAL PROPERTY OWNERS AND INVESTORS, AND YOU INTEND ON COLLECTING ADVANCE FEES FOR YOUR SERVICES, YOU WILL NEED AN ADVANCE FEE AGREEMENT THAT HAS BEEN PREVIOUSLY APPROVED BY THE DEPARTMENT OF REAL ESTATE.
DISCLAIMER / CAVEAT: Please note that although our commercial advance fee agreement has been previously approved for usage in the State of California (it received a letter of non-objection) the DRE is always permitted to impose new requirements, and/or not comply with previous approved versions of the advance fee agreement. Therefore, although our commercial loan modification agreement has been previously approved, the DRE has the inherent power and authority to require new or updated criteria, and re-submission of our commercial advance fee agreement may be required. We have had this happen in the past.
If you have a World Savings of Wachovia Option Arm Loan – there is still hope!!
Posted by: | CommentsRUNNING OUT OF TIME FOR WACHOVIA AND WORLD SAVINGS OPTION ARM LOANS???
This is an update for all of our Clients who have World Savings and Option Arm Loans. As you may have heard on our radio show www.LoanModRadio.com (The Foreclosure Defense Show), we have been successful helping many homeowners who have World Savings and Option Arm Loans get loan modifications without charging any advance fees. Please note, our program may only be last another month or so for reasons beyond our control.
We have documentable principal reduction (however this is no guarantee of such) in a good number of cases where the Wachovia or World Savings Homeowner was upside-down in their properties and a principal loan balance reduction was needed to make the modification work.
THIS MAY BE OUR LAST CALL FOR LOAN MODIFICATIONS FOR WORLD SAVINGS OPTION ARM LOANS AND WACHOVIA OPTION ARM LOANS. IF YOU HAVE ONE OF THESE TYPES OF LOANS CALL US TO DISCUSS OUR FANTASTIC LOAN MODIFICATION PROGRAM.
PART OF THE REASON FOR OUR SUCCESS ON THE OPTION ARM LOANS COMES FROM OUR UNDERSTAND OF THESE PREDATORY LOANS. YOU CAN LEARN MORE ABOUT NEGATIVE AMORTIZATION OPTION ARM LOANS AT WWW.OPTIONARMLAWYER.COM
Jason Adelman of Creative Day Concepts is a loan modification ripoff artist: BEWARE!!
Posted by: | CommentsIt has been a while since we showcased the MOD SCAMMER of the MONTH. But we have a new one for you. Mr. Jason Adelman who resides in the State of Nevada and works for a company calledCreative Day Concepts. Guy coaches a little league team in Nevada area. We have contacted his little league district to put them on notice of their potential liability in having this low-life handing around.
Jason Adelmann is the CLASSIC LOAN MODIFICATION SCAMMER. Warning to NEVADA and CALIFORNIA HOMEOWNERS – he wants your money and cares less about compliance with state laws dealing with loan modification. Jason Adelman, we are hereby calling you out.
Once my office caught up with this loan modification ripoff artsist he came clean and admitted his wrongdoing. In fact, he stated he had no idea what the California Laws for loan modification are and he was hoping that his attorney “partner” would back him and would have compliance issues dealt with. One problem, when I asked him who his “attorney-backed” Nevada Attorney was, he went limp and silent. He was afraid to speak because he knew he got his hand caught in the non-compliance cookie jar. In fact, it is doubtful he has a lawyer backing him. Probably part of his loan mod scam.
After a conversation or two he agreed he was in the wrong and promised to correct his errant ways and pay back my California loan modification client. Here is the loan mod scam agreement he promised to sign.
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
RE: Mr. XXXXXXXXXX Plaintiff v. Creative Day Concepts, Mr. Jason Adelman (“Settling Defendants”)
WHEREAS, Mr. XXXXXXXXXXXX (hereinafter referred to as “Plaintiff”), have asserted a claim against Creative Day Concepts, Mr. Jason Adelman and any other related entity including his “attorney-backed” partner who shall remain nameless (hereinafter “Settling Defendants”) in regard to loan modification services. Plaintiff and Settling Defendants Collectively may be referred to as “the Parties.”
WHEREAS, Settling Defendants deny any liability in connection with the alleged claims; and warrant that no legal action is currently pending against the Plaintiff;
WHEREAS, for valuable consideration the Parties to this Agreement wish to reach a full and final settlement of all matters and causes of action arising out of the facts, complaints, and claims between the Parties;
Trial Plan Breach of Contract and Deceptive Practices a form of Financial Elder Abuse?
Posted by: | CommentsPREDATORY LENDING MEETS ELDER ABUSE: ARE LENDERS PERMITTED TO FORECLOSE ON PREDATORY OPTION ARM LOANS AND OTHER COMPLICATED FINANCIAL PRODICTS IN THE STATE OF CALIFORNIA?
The following article discusses general legal information on the topic of elder abuse and foreclosure defense. This article contains general legal information and not specific legal advice. In addition, the article, cases, and analysis may not be complete and comprehensive or up-to-date. Steve Vondran, Esq. is licensed to practice law in California and Arizona. He practices law in the area of Real Estate, Bankruptcy, and Foreclosure Defense. He can be reached at steve@vondranlaw.com.
INTRODUCTION TO ELDER ABUSE AND PREDATORY LENDING
The elderly population (over 65 years of age) is one of the fastest growing segments of society. Medical science is helping people live longer, more productive lives. However, it is fairly common knowledge that as each of us grow older, whether we like it or not, we lose some of our mental and physical capacities.
In the context of mortgage loans, it may mean that elderly persons become less able to comprehend sophisticated financial products such as Option Arm Loans (pay options ARM / “pick-a-pay loans) and Reverse Mortgages and other adjustable rate mortgage and interest-only loan products that differ from the traditional 30 year fixed rate mortgage most California homeowners grew up on.
The California Attorney General’s Office has issued a guide for “financial elder abuse.” In this guide, (which you can find at the Attorney General website), they state:
“Financial elder abuse is the theft of money or property from an elder….it can be as simple as taking money from a wallet and as complex as manipulating a victim into turning over property to an abuser.”
The publication goes on to state: “This form of abuse can be devastating because an elder victim’s life savings can disappear in the blink of an eye, leaving them unable to provide for their needs and afraid of what an uncertain tomorrow will bring.”
The guide discusses “recognizing the warning signs” and states: “while financial elder abuse can take many forms, the most widespread abuses include telemarketing fraud, identity theft, predatory lending, and home improvement and estate planning scams.” Telemarketing fraud could come in the form of dealing with a loan broker over the telephone who attempts to coerce an elderly homeowner into believing a certain type of loan (ex. An Option Arm Loan) is the best for the homeowner (when in fact the borrower has no ability to repay a loan that builds negative amortization and which is likely to “recast” in the near future), or falsely trumping up a homeowners income in order to ensure a loan is funded and the broker is paid.
Updates on what we are seeing in the Trial Plan Breach of Contract Arena
Posted by: | CommentsHere is an update (on January 6, 2009) on the types of trial plan complaints we have been receiving from California and/or Arizona homeowners who have received trial plan modification offers under either President Obama’s Making Home Affordable (HAMP) or other internal loan modificaton programs being offered by lenders and/or loan servicers:
(1) THE “JUST KIDDING” MOD: Lender or loan servicer offers three month trial plan – then collects three payments – then claims homeowner does not qualify for a modification. Yet, the borrowers financial condition never changed at any time during the process.
(2) THE “I CHANGED MY MIND” MOD: Lender or loan servicer offers what appears to be a final modification agreement, and after the signed contract is received, and the first payment is received, the bank mysteriously no longer wants the money and refuses to honor the modification.
(3) THE “SHAME ON YOU” MOD: The lender or loan servicer knows you do not qualify for either a trial plan or permanent modification (i.e. the numbers just dont fit), yet they offer you a three month trial plan, or what appears to be a permanent modification in the sole interest of getting additional payments out of you before the time-release your property for foreclosure sale.
These are the three most common scenarios we are seeing at my firm. As we tell Clients, it may be best to have your trial plan or modification agreement reviewed by a real estate and foreclosure lawyer to see if you may have a legal case for breach of contract, bad faith, unfair and deceptive business practices, or outright fraud (ex. taking your payments with no intent of providing a modification (especially apparent where it is clear by examining the homeowners finances that they did not qualify for a modification using tradional and sound underwriting standards).
Another thing we suggest in these types of cases, is writing a detailed demand letter to the lender which informs them that you reserve your right to file a lawsuit for breach of contract, even if subsequent and additional trial plan payments are made or subsequent agreements are signed.
Litigation for trial plan breach of contract / fraud should normally be considered the last resort due to cost issues. But where the lender absoulutely refuses to provide the modification, and where valid grounds appear to file a civil lawsuit (and temporary restraining order and preliminary injunction seeking to halt foreclosure where there is a sale date) arguing that the breach / default has been cured, litigation may be your only option.
