Subject: "I love you...................I just don't want to know you anymore"
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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
