What to Do If You Can't Get a Loan Modification

HAMP Hell… Or just a misunderstanding?

Thousands of Americans that are challenging the validity of their mortgage note as well as the security behind that note in state and federal courts.  Currently over 2,000 (and growing daily) are engaged in mass Joinder law suit against their banks.  The springboard for these law suits is the extensive work and case precedence established in Ronald et al V. Bank of America suit.  BC Case # 401444.

When asked if his administration had done enough to stem the foreclosure crisis, Obama opted not to address the foreclosure fraud scandal led by Bank of America that forced banks to temporarily halt home foreclosures across the nation. Instead, Obama claimed that the government's efforts have been stabilizing the housing market, and argued that the "greatest challenge" was to make sure speculators and deadbeat homeowners didn't take advantage of the government's help with the HAMP program.

"The biggest challenge is how do you make sure that you are helping those who really deserve help and if they get some temporary help can get back on their feet, make their payments and move forward and stay in their home versus either people who are speculators, own second homes that they really couldn't afford because they chose a subprime loan, and people who through no fault of their own just can't afford their house anymore because of the change in housing values or their incomes don't support it," President Obama said during a roundtable discussion.

In speaking to bankruptcy attorneys who are running triage units for homeowners, here’s what one attorney says who consults over 200 clients a month. “From what I’ve seen the banks are stealing homes through deceiving homeowners and predatory business practices”, says California bankruptcy attorney James D. Zhou from the Law Offices of Zhou & Chini. Zhou goes on to say, “I have seen plenty of California homeowners not able to afford a Chapter 13 plan due to the banks dragging their feet and letting these people get so delinquent while waiting on the infamous loan modification”.

Homeowner advocates, members of Congress, and auditors of the administration's HAMP program have relentlessly criticized the Treasury Department for the program's shortcomings. President Obama said in early 2009 when he announced that the government’s program would help "as many as three to four million homeowners to modify the terms of their mortgages to avoid foreclosure." Well guess what, we’re not even close! In matter of fact, he’s off by over 75%!

While 640,300 homeowners are benefiting from reduced payments under the government’s HAMP program, over 750,000 borrowers have been bounced from the program. Not only that, fewer than 500,000 are in active "permanent" five-year modifications. There is no shortage of stories from homeowners who say banks acted in bad faith by stretching out "trial" modifications that are supposed to last for only three months, then denying permanent modifications and leaving homeowners faced with foreclosure and no shortage of class action lawsuits, either. Unfortunately, a class action isn’t going to keep these people in their home—I guess you can sue the bank from your apartment if you’re denied.

Last year a federal bailout watchdog reported that HAMP sometimes actually causes the foreclosures it's designed to prevent, as applicants "end up unnecessarily depleting their dwindling savings in an ultimately futile effort to obtain the sustainable relief promised by the program guidelines." It's an allegation that had already been made by homeowners across the country.

President Obama is drunk with delusion and truly unfazed by all of that. Obama stated, "The HAMP program has received a lot of criticism, but the fact of the matter is, is that you've got half a million people who have gone through permanent loan modifications that are saving 500 bucks a month," "And I get letters every day from people whose homes were saved as a consequence of it."

Administration officials and Obama have sidelined the three to four million number and now insist that the purpose of HAMP was to give doomed homeowners a softer landing when they are bounced from their homes. Even HAMP people in trial periods who are ultimately bounced from their homes, the administration argues, benefit from reduced monthly payments, which are typically $500 less than their normal amount.

One of the biggest changes to HAMP since it started last year has been the requirement that as of June, borrowers must prove their eligibility with documents like tax forms and pay stubs. The administration argues that many people were denied permanent modifications because they were put into trial plans before their ability to pay had been verified.  Frankly, this is horse pucky. You can’t just keep changing the rules as you go along…. “These are people’s homes and their families you’re talking about; Obama comes out of the inner city and now resides in the Whitehouse… flies around on his own Jumbo Jet and vacations 6 weeks out of the year…. I mean seriously, he’s out a touch with these people reality. Homeowners have relied on the government’s HAMP program to help and they’re now homeless. These people are being molested by the banks coming and going. They were victimized by lenders, realtors and mortgage brokers and now the lenders are literally lying, cheating, and laughing all the way to the bank.

The President pointed out that what are driving foreclosures today is the unemployment numbers, rather than predatory lending and exploding mortgages. "And so the single most important thing I can do for the housing market is actually improve economic growth as a whole," he said. "If we can get the economy moving stronger, if we can drive the unemployment rate down, that will have probably the biggest impact on foreclosures, as well as housing prices, as just about anything. "

Well guess what. I’m not buying that! It’s time to take the banks and shake them upside down like they have the homeowners. They literally try to get every dime they can from homeowners then steal their home through the foreclosure process.

There are currently over 9 allegations (violations of law and statues) that have been established in these Joinder suits against major lenders. The key here is “strength with numbers”, below are the top three.

MERS: To foreclose on real property, banks must be able to establish the chain of title entitling it to relief.  But MERS is a mere “nominee”- an entity appointed by the true owner simply for the purpose of holding property in order to facilitate transactions, recent court rulings stress that this defect is not just procedural but a substantive failure, on this is fatal to the banks legal ability to foreclose.

Proof of Funds (Patriot Act Violation): The banks have to show proof of the actual funding on EACH specific note transaction.  Banks have attempted to provide evidence of a securitization pool as proof of funds but the courts have ruled this as inadequate evidence.  There are two major challenges for the banks.  1) The sheer impossibility of banks being able to unwind mortgage pools down to individual

investors tied to individual property.  2)  Banks unwillingness to disclose the participating entities within the investment pools.

Proof of Note Security: When the banks securitized, packaged, sold, and resold mortgages, they created a web system where it is often impossible to determine who actually owns the mortgage notes and therefore who has the authority to foreclose.  For instance: There have been instances where two banks were trying to foreclose on the same home, and at least one case of a bank trying to foreclose on a house where the homeowner never even took out a mortgage with anyone in the first place!

Possible outcomes: A reduction in principle balance to at LEAST 80% or less of the homes current market value, full Lien strip, cash settlement or amnesty.

Who the current plaintiffs are:  Current home owners who have never missed a payment, consumers who were foreclosed upon and current home owners who are facing foreclosure.

Mass Joinder Defined: Plaintiff share in the litigation costs, (thus dramatically reducing the cost of hiring a law firm on your own) but each plaintiff has their own individual settlement

While this action might not be right for everyone or apply to all mortgage lenders it’s better than doing nothing at all if you’re a victim. While some may choose to sue the banks on their own or be forced into bankruptcy to stop a foreclosure, others who want more information on how to get into these Joinder cases can call our office. Currently there is Joinder actions filed against Wells Fargo, Bank of America, One West Bank, Chase Bank as well as a few others.

If you are facing foreclosure or have already lost your home there is hope, and you need to know your rights. The attorneys at the Law offices of Zhou & Chini are here to help homeowners stay in their homes. We can stop Trustee sale dates without filing bankruptcy and challenge the assigned Trustees legal right to foreclose. Call and speak directly to an attorney who focuses on protecting homeowner’s rights and can help you avoid foreclosure. For a free and confidential consultation call (800) 972-9600.