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

This past week witnessed the testimony of Douglas W. Roeder, Senior Deputy Comptroller for Large Bank Supervision, Office of the Comptroller of the Currency, before the Committee on Financial Services, before the United States House of Representatives. (Just try to imagine all that went on before this testimony happened; what went on during the testimony and what will go on in the future.) Without placing this thought into one of our pending time management departments, we’ll try to keep our summary of the Senior Deputy as simple as possible.

The Federal government, and now with increased legislation, state governments as well, have decided that banks and servicers have insufficient personnel to handle the number of pending mortgage modification submissions, regardless of whether the present program guidelines are met by the homeowners. To that end, our Washington representatives, whether elected or somehow federally employed, have created an untold number of departments, sub-departments, secretaries, senior deputy positions and perhaps even some clerks, to follow the much heralded foreclosure and delinquent mortgage problems in just about every State in our nation.

It’s about time. Homeowners' equity has evaporated; credit scores are at their lowest ever; banks will not provide refinancing to "at risk" customers and our homeowners who have applied for modification receive temporary solutions that solve nothing. Unemployment puts this whole process on the verge of total collapse, yet the Department of Treasury has mandated banks and servicers to modify. We have added regulations, laws, testimonials, mortgage metric data and now new accountability standards.

Bob Tedeschi, in a recent Sunday NY Times article  December 11th, "Short Sales, Long Process", adds still another rung to this ladder leading nowhere. "Homeowners can continue to expect a painfully slow process that sometimes fails, and can ultimately lead them back to foreclosure". Adding this short sale practice into the mix of loss mitigation efforts, he states " further strains the bank's ability to handle them in a timely manner".

Overall, it seems quite clear that all indicators point to rapidly increasing homeowner defaults, bank and servicer personnel challenged to account for their responsibilities and rising homeowner complaints with no effective way to curtail these failures. The directives, laws, court opinions and public outrage have all been heard over the past two years seeking to manage homeowner assistance. But none have resulted in even the slightest meaningful success ratios.

Consideration of these failures may lead some to the inescapable solution that without mandated "teeth in the process" we will continue to report on foreclosure statistics, boarded-ups homes and devastated neighborhoods of shame. Perhaps we have had enough thought given to rules, regulations and hearings and we should return to the old fashioned way of doing business and getting business done. We need our federal government to send a meaningful economic directive to our servicers and lenders to pay the piper for failure. Denials of modifications where they should be granted must become an actionable basis to avoid foreclosure. With all due respect to our Senior Deputies and Chairmen and Senators, enough is enough.

Return to our local courts and governing bodies as Justice Spinner has done and bring the parties to Court, one by one, when the existing laws have not been followed. Spinner’s much discussed opinion of canceling a mortgage in Suffolk County has now resulted in his Order to the parties to return to Court and explain why the bank took further action despite his ruling.

Sometimes less is more. We do not need additional laws to restore home ownership goals. We have the tools we need, and there are those who will see that we can all add to the core qualities of our lives without more.
 

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News stories about the economy have indicated recently that the worst recession since the Great Depression of ’29 is getting better. I can say in a word that for millions of homeowners in America who face foreclosure, (and yes, there are many more on the verge) it’s far from over. And banks continue to deny qualified borrowers the relief granted by President Obama.
The United States Congress has in place legislation requiring banks to grant loan modification if borrowers meet certain requirements. But banks don’t want to cooperate. One reason is they obviously don’t want to lose money on their loan assets. Another reason is that lenders rack up huge fees on the accounts of homeowners in foreclosure, fees that make it more profitable to delay than foreclose. So they drag their feet. In an article published by the New York Times Nov 28th, Peter Goodman states that the government will push lenders to reduce more loan payments. However, even when borrowers can get banks to consider their modification, the lenders are uncooperative. Federal law requires mandatory conferences in court regarding subprime mortgages before a foreclosure sale can be scheduled. (A new law is on the horizon extending this protection to prime mortgage homeowners as well, by the way). In an article published by Bob Tedeshi Nov 27th in the New York Times "Foreclosure Protection For All" he writes about the nearly 20 measures in the legislation. Mediation could provide the most relief for struggling borrowers, and it will require mandatory attendance in court by lenders' representatives, who are instructed to “come and be prepared.”
Unfortunately today, many of these conferences are worthless to the homeowners, who enter court with a hope that their loan modification submissions may actually be heard. The reason is that the law requires no accountability of the banks. When a lender's representative arrives in court with no information, or who shows no interest in making loan modification efforts, there is little recourse.
But finally, some borrowers are doing something about it. These few have spoken up, writing to their state and federal government saying, “If you believe in ‘no more foreclosures’, then do something about it, and do it now!”
Remarkably, government listened. And not only have our Albany officials heard our pleas, but our judges and class action lawyers are also in the fight. We are following a class action complaint where several homeowners are suing their mortgage servicer and several Government officials. This lawsuit seeks judicial development of remedies because these families have been denied loan modifications even though they meet the eligibility provisions of the Obama plans. It is claimed that over 500,000 loans are similar in nature and representative of inadequate attention to loan modification laws.
It gets even better! (Sit down for this next highlight,...please.) A Suffolk County Supreme Court ruling recently canceled a mortgage originated with IndyMac, now OneWest Bank, for reasons including the lender's continuing failure and refusal to cooperate and that it did not consider any loan modification proposals. If you are an IndyMac borrower, take a deep breath because this has to get their attention.
Our houses and neighborhoods can be saved by appropriate and well considered lawsuits and many of our judges are listening and ruling that the foreclosures must be addressed. Loan modification laws are on the books right now and can be effectively used to solve a foreclosure action. These laws and court rulings are tools that will be raised in defending a foreclosure action and actively engaged in our legislatures and courthouses.
Throughout these past several years we have witnessed the foreclosure actions pouncing on our neighbors and friends. People are on the edge of default, using credit cards to pay debt and supplement income, are struggling to save their homes and families through loan modifications. Finally, more attention is now being given to strengthening our laws and the courts are listening.
 

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