Tax Attorney Long Island

As you may expect, home mortgage loan mitigation is not a one size fits all endeavor. The universe of possible solutions is vast. Always use an attorney for ALL loan modifications that will thoroughly review your circumstances and desires before recommending a course of action. Your financial circumstances, existing loan documentation and legal rights should always be reviewed and considered. An attorney will work with you to achieve a solution which fits for you and your family. While other organizations may simply submit a loan modification request, which may be ignored by the lender, an attorney will actively and aggressively negotiate the most advantageous solution for their clients.

In many cases, an attorney will contact your lender and get them to delay the foreclosure process without filing bankruptcy. Such a scenario allows an attorney the opportunity to negotiate a “win win” resolution for both sides. Foreclosure is generally a very costly option for lenders. In certain instances, a modification of the existing loan is a good solution. Depending on circumstances, a deed in lieu, also known as “cash for keys” or “walk away” may be the right solution to keep a foreclosure off your credit report. There are many possible solutions to resolve a situation where a homeowner is either behind on payments or likely to fall behind in the near future. Such possible solutions include a modification or restructuring of the terms of your current loan to lower your mortgage payments, a recapitalization and principal balance reduction, a rescission of your current loan (up to three years) or a lawsuit against the mortgage company for predatory lending violations if determined to be appropriate after a proper loan document audit. There are many other possible resolutions as well. An attorney will assist you to determine which possible option is best for you.

Currently, Aurora, Citibank, Chase, Countrywide, GMAC, Litton, Wachovia and WAMU are among the major lenders routinely offering loan modifications. Although many lenders are willing to consider loan modifications, many lenders are unable to keep pace with the current demand for loan modifications. Even in cases where the borrower is currently in default, a lender offered forbearance agreement may not be the best resolution for the borrower. An attorney may be able to stop foreclosure by negotiating a loan modification; even in cases where a previous forbearance agreement has failed. Because we process many loan modification requests, our current relationships with lenders and loan servicing companies may allow us to bypass overwhelmed loss mitigation personal and negotiate directly with asset and portfolio managers as well as the lender’s legal department.

In order to secure a loan modification, an attorney will make use of the tools provided by federal law. Such federal tools include both the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Both state and federal laws require mortgage companies to adhere to certain guidelines when originating home loans. Some existing mortgage loans have TILA and/or RESPA violations. When such a violation is determined to have occurred, an attorney will utilize such violation as leverage to negotiate a favorable resolution for our clients. Generally, lenders will seek to avoid costly litigation and are more agreeable to reaching voluntary solutions when such violations are identified and brought to their attention by qualified law firms.

During times of real estate booms, some brokers and lenders engage in unfair or illegal practices to close loans. An example of these practices may include charging unexplainable or unreasonable fees and charges. Other examples include not fully explaining interest rate adjustments, pre-payment penalties or the implications of option ARM loans with minimum payment options. Additionally, some brokers and lenders illegally inflated or otherwise manipulated financial statements to qualify buyers who would otherwise not have qualified for their loans. Simply refinancing out of these inappropriate home mortgage loans is now generally not an option because of declining property value or debt to income ratios.

An attorney can help to identify if you have been the victim of such an issue. In such a case, we can attempt to resolve these issues fast and efficiently so the borrower doesn’t fall victim to foreclosure proceedings. Helping stop foreclosure and restoring financial stability for our clients is our main goal.

There are additional reasons to conduct a detailed review of the client’s mortgage home loan documents. If a lender fails to properly provide adequate notice of the borrower’s right to cancel, the right of rescission may be available to the borrower for up to three years. When such right is extended for three years, the borrower may be able to rescind the loan during such period. In such a circumstance, the loan is treated as if it never existed. Essentially, the borrower becomes entitled to all profits made by the lender as a result of the loan. As such, the lender or other creditor would be required to refund all interest paid, all closing fees, all broker fees, and even pay the borrower’s attorney fees. This circumstance can create a legitimate windfall to the borrower. The extended right of rescission is a powerful tool to assist borrowers who have been victims of predatory lending. An attorney can assist in determining if such a right exists and will assist its clients in exercising such right in appropriate circumstances.

Mortgage and loan servicing companies generally do not want your home and most will work diligently with a law firm to avoid foreclosure. Litigating mortgage fraud and predatory lending cases can become costly for both sides and should be avoided unless the lender will not comply or there are significant damages to the borrower. Our clients retain us to make a best effort at resolving their hardship and to fight for their rights. In most cases, the client’s goal can be realized without costly litigation by using existing relationships to find an amicable resolution to stop foreclosures.

A loan modification proposal offered by a law firm may result in a more favorable loan modification agreement than your lender will offer you directly. Many modifications offered by mortgage lenders and loan servicing companies are forbearance agreements and are not a true modification to the terms of your mortgage. These types of agreements generally do not benefit the borrower in the long term and home owners facing foreclosure should consult with a law firm and fully understand the terms and ramifications before signing any of these documents.

In cases where neither refinancing nor a loan modification is a possibility, a short sale or a deed in lieu may be among the best options to both avoid foreclosure and a deficiency judgment. An attorney can help borrowers navigate through the possible options to determine which resolution is best for your particular circumstances. A real estate short sale occurs when the lender agrees to discount the loan balance and accept the sale proceeds in full satisfaction of the outstanding debt. In such cases, the lender has the right to approve or disapprove of the proposed sale. Lenders are generally inclined to agree to a short sale if they determine such action will mitigate losses as compared to foreclosure. The advantages of a short sale to the borrower include avoiding a foreclosure reported on credit history and mitigating or eliminating a possible deficiency. A short sale is generally faster and less expensive than a foreclosure. In summary, a short sale is a negotiation with a lender resulting in a payoff less than what is currently owed.

Not all lenders are equally amenable to short sales. Many lenders have pre-determined criteria for such transactions. Distressed lenders may accept any reasonable offer. However, junior lien holders such as second mortgages, HELOC lenders, and HOA (special assessment liens), may also need to approve of any short sale. Objectors to short sales sometimes include tax lien holders (income, estate or corporate franchise tax – as opposed to real property taxes, which have priority even unrecorded) and mechanic’s lien holders. It may be possible for junior lien holders to prevent a short sale. Additionally, lien holders who are not mortgagees are generally unlikely to forgive the debts owed to them.

While a short sale appears on a borrower’s credit report differently than a foreclosure, a short sale may nonetheless have severe consequences for the borrower in the future. A short sale may appear on a borrower’s credit report as “foreclosure proceedings started.” While not a foreclosure, a short sale may prevent the borrower from obtaining a new mortgage for seven or more years. Short sales are complex matters which should be handled carefully by experienced professionals.

The loss mitigation industry is a recent advent and has become large as a result of the current economic and real estate crisis. The loan modification industry is currently inundated with marginally qualified or unethical individuals, who are essentially salespeople, who have accepted fees in exchange for half hearted efforts or no efforts at all to provide loss mitigation services, loan modification or stop foreclosure services. As such, several states are currently considering legislation which requires attorney involvement for loan modification requests.

Some companies offering loan modification services claim to be “attorney backed” or “attorney based” in their marketing. In such a case, borrowers should be aware they are not contracting with or engaging the services of a law firm. Some companies simply hire an attorney for consultation to claim an association with an attorney. In such a case, the attorney does not represent the borrower and the company is not bound by the same ethical duties required by licensed attorneys. Additionally, no attorney client privilege exists with such a company and statements made to them are discoverable. To be sure, the borrower is encouraged to request to speak personally with the attorney.

“Attorney based” loan modification companies are not law firms. As such, when you discuss the details of your mortgage with these companies, there is no attorney client privilege. Any conversation you have with a non-law firm loan modification company is discoverable by a state agency and not protected by attorney client privilege and therefore not confidential. Prosecuting agencies have become much more aggressive recently in bringing prosecutions for mortgage fraud based on overly optimistic or inflated representations regarding income or monetary reserves at the time of qualifying for the loan. Therefore, if you are concerned that statements you made on your mortgage loan application could be construed as false and you are at risk for foreclosure, please contact an attorney immediately. Do not discuss this issue with anyone other than a licensed attorney.

For more info-
http://www.attorneyforloanmods.com

The home loan modification process seems to be wrapped up in some sort of mystical experience that only a few attorneys and specialists are privy to.  This just isn’t the case.  You don’t have to go out and spend $3,000-$4,000 on a negotiator that has been doing this for about as long as Obama came out with the American Recovery and Reinvestment Act of 2009.

Frankly, you could probably do just as good of a job as some of these so-called “experts” trying to jump on the gravy train.  I’ve been a Loan Mitigation Specialist for over 25 years, and I was really surprised when I saw that home loan modification was being presented as some brand new epiphany that a few savvy journalists and bloggers got the inside scoop on.

It’s just not so.  However, the number of home loan modification packets have increased enormously with the tens of thousands of people laid off.  For example, take Ohio home loan modification.  They have set a major precedent in the Supreme Court and in economics in general.  Since they are the number one state in foreclosures, do you know how many “experts” popped up here?  Too many–check the lawbooks…

So, you find yourself online looking for the ins and out of home loan modification.  You don’t know where to get started.  I can help with that.  Here we go.

• What is home loan modification exactly?
  A home loan modification happens when the lender and borrower have negotiated terms that they both agree upon concerning the borrower’s home loan.  The loan is permanently reinstated to terms the borrower can afford.
• Will the lender include charges in the home loan modification?
  According to HUD, no, they recommend that the lender waives these charges.  Just to make sure, have your lender break down all the fees and penalties that they are charging.  This isn’t unreasonable, at all.
• Does the government really do anything to help with home loan modification?

At first, the government got a bad rap for this.  Before the end of Bush’s presidency, he had the Hope project pushed through in an effort to help out the subprime debacle.  However, the HUD guidelines are so difficult to pass that only about 1% of the defaulted loans qualified.  Furthermore, hardly anyone knew it even existed.

Barrack Obama worked hard at fixing this problem as soon as he was elected.  He funneled $75 billion to subsidize lenders and servicers who will offer a home loan modification.  Now, the banks can offer more of an incentive to home loan modification candidates.

• Do I qualify for a home loan modification?

Truth is, it’s all in the debt to income ratio of the newly negotiated terms.  You’ll have to prove all your income.  The days of stated income are gone.  You’ll definitely need your last two pay stubs, income tax statements, and bank statements.  You have to fill out a completely accurate financial statement with income and expenses, so they have a clear map of what you will be able to afford.

Are you ready to try for a home loan modification?  Chances are in your favor.  You don’t have to spend a ton of money on a specialist.  If you had that money, you wouldn’t even be in this predicament.  You can be your own home loan modification specialist.  After you try out a DIY home loan modification kit, you’ll probably be more qualified than anyone else, too.

Detroit – Over the last several weeks I’ve noticed a substantial increase in the number of loan modification companies being investigated by various government agencies. 

All I can say is that it’s about time.

Now don’t misinterpret that statement – I believe that loan modifications may be part of a viable solution in getting our country out of the current housing crisis, although it’s too soon to determine their actual long-term effectiveness.

I also have nothing against loan modification companies in general nor the people that work at them.  I’ve met or connected with many individuals that are intent on really helping people and do their best to do so.

 Lastly, many homeowners do need some type of assistance as lenders don’t have their best interests in mind when they do loan modifications and many lenders draw the process out seemingly forever.

On the other hand, I’ve personally heard many stories from homeowners victimized by loan modification companies, have heard the same stories from mortgage associates and have read many more on the internet.

From Subprime to Loan Mods

I predicted over a year ago that loan modification companies would become the new subprime “churn & burn” debacle.  This was triggered by my observations that many local subprime loan originators were flocking to do loan modifications.  I even heard several stories of these originators approaching the same clients they’d put in subprime loans, with offers to now do loan modifications for them.

There really is no barrier of entry to do loan modifications.  All you need is a phone and the ability to find clients.  Finding clients is easy with so many homeowners struggling with their mortgage payment.

This should all sound familiar as much of it applied to the mortgage industry in general until recently, when state governments started requiring individual licensing of loan originators and the federal government created a national registration system.

When Michigan enacted its Loan Officer Registration Act, April 1, 2009, the state expected 10,000 to register based on past data.  To date only 3141 have met the requirements of 24 hours of class time, passed a multiple choice test and background screening.  How many of the unregistered do you think are now using their limited mortgage knowledge to do loan modifications?

Desperate People do Desperate Things

One would think that a homeowner, burned by a bad mortgage, would be a bit more cautious when considering a loan modification. 

The number of loan mod companies popping up however, prove otherwise.  It’s basic supply and demand – the numbers of these companies wouldn’t be expanding if there weren’t desperate homeowners to support them.

So, how do homeowners get burned by these companies?  In no particular order: 

• Paying upfront fees for a modification never completed.
• Being told they’ll get a principal balance reduction, when in reality it rarely happens.
• Getting approved for a modification that raises their payment or insignificantly lowers it.
• Following advice to not contact their lenders during the loan mod process, only to get foreclosed on.
• Not being made fully aware of the possible credit damage, legal issues and tax consequences. 

It’s all boils down to these companies over-promising and under-delivering.

What Took the Government So Long to Act?

If I saw this problem coming over a year ago, you’d think the smart people in our government would’ve saw it coming also. 

In a recent informal poll of mortgage originators by “Think Big Work Small”, 81% responded that over 50% of those doing loan modifications are “rats”.

Unfortunately, just like with the mortgage meltdown and the banking crisis, the government only seems to act after the damage has already been done.  Here’s a list of the agencies currently chasing loan mod companies: 

• Federal Trade Commission
• United States Attorney’s Office for the Central District of California
• Arizona Attorney General’s Office
• California Department of Justice
• California Department of Real Estate
• State Bar of California
• Colorado Attorney General’s Office
• Idaho Attorney General’s Office
• Illinois Attorney General’s Office
• Iowa Department of Justice
• Kansas Attorney General’s Office
• Maine Attorney General’s Office
• Maine Department of Professional and Financial Regulation, Bureau of Consumer Protection
• Maryland Department of Labor, Licensing, and Regulation, Office of the Commissioner of Financial Regulation
• Massachusetts Attorney General’s Office
• Michigan Attorney General’s Office
• Missouri Attorney General’s Office
• New Jersey Attorney General’s Office
• New Jersey Department of Banking and Insurance
• New Mexico Attorney General’s Office, Consumer Protection Division
• North Carolina Department of Justice
• Ohio Attorney General’s Office
• Oregon Department of Justice
• Texas Attorney General’s Office
• Washington Attorney General’s Office 

Charges are being filed because of deceptive and/or false advertising (Section 5 of the FTC Act), charging upfront for services before rendered, unlicensed activities, mail fraud, attorney misconduct and several others.

Solutions

The Obama administration really needs to step up and address this issue quickly.  The crooks and sharks need to be forced out of the industry to protect homeowners.  Honest professionals also need protection – from overzealous government agencies.  It’d be a real shame if those that were actually doing good things for homeowners were put out of business, fined or jailed. 

An easy to implement option would be to allow loan modifications to only be done by licensed mortgage companies and attorneys.  The mechanisms are already in place across the country to control this.

A better solution would be for the administration to create a national solution instead of letting all 50 states come up with their individual plans. 

For a list of the loan modification companies currently be investigated, click here and then click on “preview”.