Tuesday, December 04, 2018

Do home loan creditors owe borrowers a loan modification? Or should borrowers ATTACK?


"Wells Fargo says a computer glitch is partly to blame for an error affecting an estimated 500 customers who lost their homes. The giant bank filed papers with the Securities and Exchange Commission last month, revealing it incorrectly denied 870 loan modification requests. About 60 percent of those homeowners went into foreclosure."

Since when does a lender owe a loan modification to a borrower?  Since NEVER*.

The borrower and lender agreed on the original loan, the borrower signed the note and the security instrument (deed of trust or mortgage), the borrower owes the creditor the money through the monthly payment schedule, and if the borrower breaches the agreement, the creditor has the right to foreclose and force a sale of the mortgaged property to discharge the debt.

The courts have the obligation to enforce the terms of that agreement, and in the case of a deed of trust, the borrower has confessed judgment against himself for failure to make timely payments, so the creditor doesn't even have to sue in order to enforce the agreement.

Government has no authority to force a modification of the terms of a valid, conscionable contract (albeit some courts have highhandedly abrogated valid agreements in the past).

*The creditor owes no obligation to the borrower to modify the terms of the loan, unless the creditor promised the borrower a loan mod if the borrower completed the trial payment program under the Home Affordable Mortgage Program (HAMP).  HAMP expired on 31 Dec 2016.  In any case, the loan mod constitutes a terribly bad deal for mortgagors because the interest rate goes up in a few years, and the borrower owes a huge balloon payment at the end of the loan term which most borrowers cannot afford.

The best way to avoid foreclosure is to save up and PAY CASH FOR THE HOUSE or lease it with an option to buy.

Mortgage Attack - the only sensible strategy for borrowers

From my observations, one or more entities injured the borrower in the loan transaction, so I recommend finding the injuries and going on the ATTACK (see http://mortgageattack.com).  Think about it.  The appraiser lies about the value of the property, the mortgage broker lies about the terms of the loan and charges excessive interest, the servicer forces insurance on the borrower who already has adequate insurance, the creditor lies about the loan mod, the creditor lies about the cost of the loan.  I estimate that upwards of 90% of the home loan/HELOC borrowers have suffered such injuries in the past 15 years.  By finding the injuries and attacking the injurious entities, the borrower can end up with damages and fees paid, and the house free and clear.  Mortgage Attack makes sense for all home loan borrowers.

Bob Hurt

Bob Hurt
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