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Servicers Make More Money By Modifying Than By Foreclosing

Posted in Mortgage Modification

Thanks to Martin Andleman and Mandleman Matters Why Does Ocwen Want to Modify Loans? Answer: Because they profit by doing so.   In case you haven’t noticed, over the last month or so there’s been an ongoing debate of sorts happening on Mandelman Matters as to whether mortgage servicers make more money modifying loans… or foreclosing. It’s the same debate that’s been going on informally all over the country since 2009, when everyone was trying to explain what the Sam Hill was going on with servicers who at the time, seemed to be doing everything but modifying loans. And, if you remember, I’ve been saying that servicers cannot possibly be making more money by foreclosing today… perhaps they did to a point, but not for a long time now.  Late fees are great… to a point.  Once everyone’s late,...

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Low Modification Approval Rate

Posted in Fannie Mae, Mortgage Modification

This post comes from Martin Andelman. The low approval rate on modifications Martin discusses is the main reason why you should hire an attorney to do your modification. Our success rate on modifications is much higher, around 80%. Of course, part of the reason why that is so is that we do not take cases where we are not reasonably confident that we can get a positive result. *** Data shows Nationstar Approves Loan Modifications at Much Lower Rate than Big Banks During the month of May, which is the most recent data available from the Treasury Department, Nationstar Mortgage’s servicing operations approved 601 loan modification requests… and denied 4,216.  That’s a 12.5 percent approval rate for the month of May.  Cumulatively, based on program-to-date data through the month of May, Nationstar only approved 22 percent of the loan...

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Lenders Lie to Modification Applicants

Posted in Mortgage Modification

We have found that Lenders often take advantage of those who apply for modification on their own. Lenders tell them they have not received certain documents and say their documents have “expired”. Often lenders  decline modification and do not make the reason clear. This is why we believe that it is best to be represented by an attorney when you apply for modification. Thanks to ProPublica for this article. Bank of America Lied to Homeowners and Rewarded Foreclosures, Former Employees Say A customer uses an ATM at a Bank of America branch office on April 17, 2013 in San Francisco, California. (Justin Sullivan/Getty Images) by Paul Kiel ProPublica, June 14, 2013, 5:44 p.m Bank of America employees regularly lied to homeowners seeking loan modifications, denied their applications for made-up reasons, and were rewarded for sending homeowners to foreclosure, according to...

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Bank of America – Fannie Modification

Posted in Mortgage Modification

HMH came to me following a financial hardship. He faced high payments on his Bank of America serviced loan, with a rate of 5.625. The investor is Fannie Mae. HMH is self-employed as a taxi driver. He also owns a rental house in Brooklyn, which breaks even or makes a small profit. He also owns a taxi in Brooklyn,  and it has a mortgage against it. The rent on the taxi is roughly the amount of the mortgage payments. These self-employed situations are always a challenge. The result was satisfactory. HMH got a 2.0% rate with a 40-year amortization. There was no principal reduction first because Fannie Mae does not give principal reductions (although it sometimes gives principal forbearance) and second because his house is worth approximately what he owes on it.   See HMH’s modification here. The client...

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Bank of America Principal Reductions

Posted in Mortgage Modification

Bank of America has started sending letters to thousands of homeowners in the United States, offering to forgive a portion of the principal balance on their mortgages by an average of $150,000 each. The reduction for qualifying homeowners could amount to monthly savings of up to 35 percent on mortgage payments, Bank of America said in a news release on Monday evening. The principal reduction offers from Bank of America Home Loans are the result of a $25 billion settlement agreement earlier this year with 49 state attorneys general as well as federal authorities who had been investigating allegations of abuses over the handling of foreclosures. “To the extent principal reduction and other modification tools help us turn mortgages headed for possible foreclosure into long-term performing loans, it will be positive for homeowners, mortgage investors and communities,” Ron Sturzenegger,...

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Banks Lowering Principal On NegAm Loans

Posted in Principal Reduction

As millions of Americans struggle in foreclosure with little hope of relief, big banks are going to borrowers who are not even in default and cutting their debt or easing the mortgage terms, sometimes with no questions asked. Click here to read...

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Bank of America Sued Over Trial Modification Plans

Posted in Mortgage Modification

Anthony and April Soper’s financial troubles were only starting last October when they applied for a mortgage adjustment through the Obama administration’s Home Affordable Modification Program. Anthony and April live in Lake Stevens, Washington. Bank of America, their mortgage servicer, put them on a HAMP trial payment plan in December that cut their monthly payments from about $4,000 a month to about $3,130 a month. They say they made their reduced monthly payments early and did everything else that was asked of them. But they didn’t get a permanent modification, and they say they don’t know why. Instead, according to a lawsuit they’ve brought against Bank of America, they are now more than $8,000 behind on a mortgage that had been current 12 months ago. Each of their credit scores has dropped by nearly 100 points. And, they allege,...

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