Keep Home Your Own : New York Real Estate Lawyers & Attorneys : Rubin & Licatesi Law Firm : NY Loan Modification, Foreclosure : New Jersey, Long Island

Would you believe that recently, a record number of homeowners and lending institutions  have partnered in the largest and most heralded effort in the history of this great country to save homes from foreclosure sales?  I didn’t think you would. I wouldn’t believe it either.

Few, if any, who face the issues of mortgage default would find such a statement to hold water.   In fact, most people who have entered this arena bear witness to a process that finds them discussing their woes with bank representatives in foreign countries, or with loss mitigation center counselors who have no e mail addresses, no last names and no phone numbers that reach them at their desks. 

Clearly, the loan modification process and accountability measures now in place are less credible than the rancher who says he can herd cats into a barn.  In search of a solution, we read that our Federal government has enabled its Treasury Department for the past 9 months to develop enormous crates of rules and regulations known as the HAMP program.  National lending institutions and mortgage servicers have signed up to comply with these concepts.  

So, why are we still suffering this madness?  Where are the solutions HAMP promises and why are they not being followed?   Few people are equipped to take the temperature of these topics and provide us with real-time answers.  Richard Thaler has given his readers this past Sunday in his Economic View column in the NY Times a very distinctive point of view.  He similarly concludes that "Lenders have been reluctant to renegotiate mortgages, and government programs to stimulate renegotiation have not gained much traction."

Thaler suggests a vastly different approach which hardly requires reams of regulations to implement.  "The bank would be required to reduce the mortgage by the average price reductions of homes in the neighborhood. In return, it would get 50 percent of the average gain in neighborhood prices-if there is one-when the house is eventually sold". 

Sounds simple, but is it too simple to work??  This supports all economic theories that foreclosures are just bad business for our neighborhoods and create instability and chaos in every facet of our lives.  Of course, we will hear the cries that the hunted have outfoxed the hunter; that the borrowers and homeowners who have defaulted in their loan obligations are being given a free pass for their failures. 

We will just have to cope with such criticism and shoulder these moral dilemmas for our neighbors and friends.  Moreover, we must continue to hold forth hope and solutions to the millions of Americans who are now facing such problems, as well as to our national lending institutions who are our partners in recovery.  We must allow our local courts to enable the present legislation to hammer out foreclosure settlements and we must educate our friends and clients that there are real and definite paths to follow after receipt of the foreclosure summons and visit from the process servers.

We must be aggressive in our outreach to those in need of creating new ideas and developing new approaches to handle a foreclosure, and we must begin to imagine that homeownership can be restored.  Credit scores will once again become a vital and sought after statistic and people will willingly and with great hope, visit such sites as CreditKarma.com or Quizzle.com and other credit sites as a source of pride. 

The thought of saving homes and neighborhoods is a reality for many who visit our offices.  Why do some choose to enter our doors and opt out of the herd of madness?  Rather than spend any time on that question, let us hope that many more will choose to do so and restore confidence so that banks can do what they do best. Let us hope we can once again and in good faith and conscience ask our lenders to restore our neighborhoods with loans, jobs and homes.    

• Email This
• Print
• Comments
• Trackbacks

The past several days have shown repeated sightings of pending Board approvals for chiefs at some of our major lending and banking institutions.  One such article stated that James Gorman, the chief executive at Morgan Stanley is in line for an $8.11 million dollar deferred stock bonus for his work and efforts in 2009.  Bonuses, it seems, are being taken for granted.  It is merely a question of how much. 

I would like take this moment to reflect upon the enormous devotion of time and analyses that must have been spent in order to present this bonus package to the Board for approval.  And maybe the time spent in such reflection allows a bit of a respite for us all, as my days are not ordinarily spent pondering such concerns. 

For most of us, the realities of the current economic crisis are quite a bit less pleasant than Mr. Gorman’s. Yesterday I met with a very humble client, a person who could so easily live right next door to any of us, a client who is responsible to her family and children and also responsible to a very large and respected corporation to show up for work every day, at exceptionally inglorious hours. 

 My client initially visited me the day before our country celebrated Independence Day, in the midst of an incredible summer rainstorm.  My impression was that she had a most serious issue to deal with. She most certainly must have been motivated to make such a drive, especially the night before a holiday weekend. She shared with me a notice she received earlier that week, stating, quite simply, that her house was going to be auctioned to the highest bidder in several weeks.  Her family had become an "endangered species".  

Our conversation explored the history of her ownership, and several interim departures and returns to the residence. But her family's commitment to stay in their house remained the consistent thread of our conversation.   We discussed short sales, refinancing, loan modification, considering all the possible solutions. Unfortunately, time was not on their side.  Now, some seven months later, the signs of her loss are once again apparent.  Cold trails of short sale contracts, mortgage loan applications, credit reports, mortgage consultants and court appearances may have held her hopes hostage for the last time. 

New clients also call with similar and dangerous experiences with process servers, foreclosure consultants and loan modification experts.  The reactions of these clients are quite typical.  Disbelief, anger and frustration head the list of emotions surrounding homeownership problems.  Each family that enters our doors has had their dreams of backyard barbecues, gatherings and holidays evaporate before their eyes. None expected it when they bought their homes.  I have yet to meet the borrower who entered the closing room planning foreclosure several years hence.   

This New Year provides the opportunity for relief.   Our state legislature has enacted stronger laws for our courts and judges which may hold off the foreclosure process and provide means of settlement and modification.  Changes can be immediate for those who find a foreclosure summons in their mail.  We know today that there are routes to travel and that the only shame is to do nothing. 

Monday morning I will be starting my day with a client who received a trial loan modification offer in the mail, after submitting reams of documents, pay stubs and bank statements over the past 5 months.  His unhappiness was capped by the suffering of his family and friends in Haiti.  Nevertheless, he will make his way to my office and when he leaves, more than likely, he will have one less problem on his plate, at least for the next several months. 

No one knows why he received a loan modification, although we can speculate on such success. For that matter, no one knows why the file next to his has been denied or not yet acted upon.   What we can definitely state is that there are sufficient and recognized methods that can be utilized to defer and perhaps overcome the foreclosure process.   It requires commitment on the part of the homeowner and a desire to change; a need to keep an open mind on the potential outcome; and a deep seated belief that reinstatement may be an achievable goal.  

True, I do not plan for million dollar bonus proposals and the lobster dinners this year were few and far between, but this is a time for resolutions and challenges to the silent majority of homeowners facing chaos and losing a little more sleep each night.  These are not illusions and the nervous worries are reality striking hard. 

These very same insecurities can become assets if turned into action.  Going to visit an attorney, bar association or foreclosure counseling center is no big deal.   This may seem obvious, but for so many, paralysis is the natural reaction.   If there is one thing that I can guarantee, it is that amazing results can happen with the synergy of programs and legislation now in place.   

• Email This
• Print
• Comments
• Trackbacks

NBC's Today show's Ann Curry discusses the mortgage melt-down with Barbara Corcoran, & Financial Editor Jean Chatzky. They offer advice for homeowners still experiencing difficulties

Visit msnbc.com for breaking news, world news, and news about the economy

• Email This
• Print
• Comments
• Trackbacks

 

With families, friends, neighbors and business colleagues enduring painful decisions on who to pay and how much to pay, our challenged budgets now look at one of the most time honored American debts as another minefield to cross.  It is reported that despite the rising stock market indexes, the economic recovery is steeped in rising unemployment on a monthly basis.  Some statistics now report that nationwide we may be looking at a 10% unemployment rate.  Washington experts, the same faces, people and opinions who so openly rallied around the Obama plan of home loan modifications, must now face squarely the singular dismissal of any notion that we are witnessing success on that front. 

Roger Lowenstein's article in this Sunday's NY Times Magazine section, entitled "Just Walk Away" clearly and vividly engages the morality issues which plague our neighbors who may have to consider such situations.  Says Lowenstein, "Such voluntary defaults are a new phenomenon.  Time was, Americans would do anything to pay their mortgage-forego a new car or a vacation, even put a younger family member to work.  But the housing collapse left 10.7 million families owing more than their homes are worth.  So some of them are making a calculated decision to hang onto their money and let their homes go. Is this irresponsible?"  

Mr. Lowenstein brilliantly places the default decision under a microscope and continues to soothe his readers who experience these crippling bottoms in his comparison to our business leaders who have made such choices without hesitation.  "Morgan Stanley recently decided to stop making payments of five San Francisco office buildings.” Says Lowenstein. “Nobody has said Morgan Stanley is immoral.” 

But our biggest financial houses and national institutions may not be entitled to this same "pass" that family and friends may so rightfully deserve under the loan modification and Treasury Department guidelines.   Federal and State mandates, regulations and guidelines have been enacted to govern the conduct of mortgage lenders and servicers when faced with a defaulted principal residence homeowner.   It is obvious from the many cases which I have participated in, and the hundreds, if not thousands, of phone calls and conversations in our office, this default was not planned. 

Nobody talks about their planning their default, and how things worked out just as they anticipated.  No one has come in and said that several years ago they decided to "speculate" on a home which they knew was overvalued at the time and then pay for a few years with the strategy to watch their equity and hopes evaporate.  

On the contrary.   The story is quite similar, time after time, that our clients, customers and friends in fact did not speculate on their homes, but rather, bought at a time when the economy was in strong, upward growth and their businesses were solid and their income was wonderful.  These are the stories I see. For the people I come into contact with, their intention was never to walk away from their homes.

 

• Email This
• Print
• Comments
• Trackbacks

 

Some light reading to pass along this month comes from the Treasury Department ¹.  The Executive Summary of the report clarifies what some may assume to be common knowledge, but for the rest of us, let me quote:  “Overall, mortgage performance continued to decline as a result of continuing adverse economic conditions including rising unemployment and loss in home values……Seriously delinquent mortgages – rose………….Foreclosures in process increased……….delinquencies continued to climb.  The percentage of prime mortgages…was….up more than double the percentage of a year ago.”.  

Take a look at this report on line and view the graphs, well written summaries, mathematical analyzes, tables and indexes and let’s see if we can leave the report on our coffee table as a new item to show our neighbors and customers. 

However, others really don’t think this is necessary.  Martin Andelman writes in The Niche Report, December 2009 a most telling and courageous article and discussion on the Treasury’s Assistant Secretary for Financial Institutions, Mr. Michael S. Barr. It reports (again) that “fewer than 2,000 of the 500,000 trial loan modifications in the works had become permanent under Barr’s “Making Homes Affordable” program, according to a congressional oversight panel.”  

Mr. Andelman then says in his closing remarks (which are so on point) to Mr Barr: ”Step down, Mr. Barr.  Your services are no longer required.  And you can leave today, as far as I’m concerned.  No need to wait until your replacement is found, because having no one in your position, as compared with having (you) in the seat……….there’s no chance you’ll be missed, and leave it at that”. 

Sounds a bit harsh and I have even toned down the choice of his words in my quote of his article, but take this to heart-    when it hits you, or your family, or your neighbors, or your friends answer the door at 7am to meet a stranger who hands you a foreclosure summons, well then, maybe Mr. Andelman hit it right on the head.  

And then what do you do?    What are you supposed to do? Who do you share this news with and how soon do you have to do something about it?  These are the families and clients that I see and talk with.  This is an unheard of fix to be in.  No one walks away from their home.   Our neighborhoods are filled with children, seniors, friends and people from all walks of life who are in love with their homes, backyards, garages and basements. 

But, after an early morning surprise visit from a process server with a foreclosure summons, all of a sudden and in that split second as you walk back into your front door and look around at the familiar settings, many love affairs end.  Short, sweet and to the point.   Those are the bullet points of discussion, amidst the tissues and tears.  The personal stories, the special rooms, the antique heirlooms, all seem to lose their significance as clients and families begin to face the harsh reality of foreclosure.  

No longer are the conversations around the dinner table about home equity, college payments for the children or retirement dreams.   Now we face more pressing issues of forensic loan audits, defenses to your promises to pay these obligations and the moral dilemmas of credit reports, job losses and “Will my neighbors find out I’m in foreclosure?”   Our lenders have not created this chaos nor are they blind to the loan modification procedure.  In varying degrees, our mortgage servicers and lending institutions are participating in loan modifications with different degrees of success.

 With continued urging and oversight, the loan modification principles and regulations can benefit those who struggle through the process.  It requires patience, phone calls, more patience and more phone calls.   Many families visit their attorneys and receive counsel and guidance in these procedures.  

The economic crisis we face does not get solved by walking away from our homes.   There are long term issues that may affect a homeowner, even after a court ordered sale of the home, in terms of deficiency judgments and other related debt issues.  When faced with a foreclosure action or as you see the arrears begin to increase, it does not have to be a case of “falling out of love” with your home, your lender and your debts.   Homeowners have options and there are roads to recovery that can be evaluated, when discussed in face to face talks with attorneys who are interested in these areas. 

1. Office of Thrift Supervision, US Department of the Treasury, Comptroller of the Currency, Administrator of National Banks, in the OCC and OTS Mortgage Metrics Report, Disclosure of National Bank and Federal Thrift Mortgage Loan Data, Third Quarter 2009, December 2009

 

 

• Email This
• Print
• Comments
• Trackbacks