Here are some questions we routinely receive and our typical responses to such. Note, as with all of our callers and emailers, the following is general legal information only and not intended to be construed as legal advice or a substitute for legal advice. For specific loan modification or foreclosure prevention questions, please consult with a qualified attorney.
Attorney Steve Vondran, Esq. may be contacted at (877) 276-5084 or by email at steve@vondranlaw.com
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What is a loan modification?
A loan modification is any adjustment, alteration, or modification, of the terms of your existing mortgage loan, whether first and/or second mortgage. Typical types of loan modifications offered by the lenders are:
Arranging for the delinquent payment amounts to be added to the end of loan (forbearnace)
Reducing fixed interest rates to lower fixed rates
Reduce adjustable interest rate CAPS
Stopping the upward adjustment of adjustable interest rates
Converting adjustable interest rate into fixed rates
Arrange for the delinquent payment amounts to be added to a longer loan period
Setting up alternative payment plans
Elimination or reduction of delinquent payment amounts
Reducing hte principal balance loan
Lender may accept discounted pay-off
The type of modification you qualify is typically up to the borrower. There is no legal requirement as of the writing of this blog that would suggest any loan modification or certain type of modification is rquired to be presented to any borrower.
Do I qualify for a loan modification?
In order to qualify for a loan modification, at the minimum you normally need to show a financial hardship (loss of job, loss of income, but also the ability to afford a reasonable monthly payment on your loan).
The job of your loss mitigation representative (loan modification attorney) is to package up your financials and hardship letter and submit these to the lender for review.
Where an attorney is involved, you will normally have a detailed forensic loan audit performed which is designed to identify potential predatroy lending violations (RESPA, Truth in Lending, Loan Mortgage Fraud, etc.) that may be used to leverage yor lender or loan servicer.
The Obama "making home affordable" program created new options for loan modifications and the criteria for qualifying for these programs are easily obtainable. In fact, we have written a prior summary of these requirements. Here is an outline that presents other possible guidelines for loan modifications: http://activerain.com/blogsview/971756/where-is-the-change-obama-s-loan-modification-plan-offers-little-more-than-voluntary-loan-modifications-and-more-incentives-for-the-financial-institutions-
What is a forensic loan audit?
A forensic loan audit is an evaluation of your loan documents in an effort to identify potential predatory lending violations that may serve as the basis for leveraging a loan modification. This is especially true where the originator of the loan is the same entity that is currently servicing the loan.
Typical items we look for when conducting a forensic loan audit:
(1) Did each borrower or person with ownership interest get two copies of the Notice of Right to cancel with the Rescission date filled in? (Federal Truth in Lending requirement - TILA).
(2) Were the material TILA disclosures made, and were they accurate if made (APR, Finance Charge, Amount Financed, Total of Payments). If these disclosures were not made or defective in nature, an extended three year right of rescission exists.
(3) Were the good faith estimate and preliminary truth in lending statements given to the borrower within 3 days of giving the loan application? (if not, a right to rescind may exist).
(4) Were advance fees improperly collected?
(5) Was the broker/loan officer properly licensed at all stages of the loan origination process?
(6) Was the ARM / Option ARM / Negative Amortization Loan accurately disclosed in the note and adjustable rate rider?
(7) In a non-purchase loan, did the borrower receive the required three day right to rescind?
(8) After the broker ran the credit, were the credit scores disclosed and factors affecting risk properly disclosed?
(9) Can the lender produce the promissory note and prove it has the right to collect the debt?
(10) Is the note clear and comprehensible (or do we have grounds to argue that a contract was never formed - that there could be no meeting of the minds)?
(11) Unfair Competition - If we find a violation of RESPA, Truth in Lending or HOEPA, or other law, do we have grounds to assert that the lender has engaged in unfair, deceptive and/or fraudulent business acts and practices and seek the imposition of a constructive trust forcing the lender to disgorge any ill-gotten gains or to seek an injunction?
(12) Were the loan documents properly signed, executed and notarized?
(13) Option Arms / Negam Loans: We will assert that these loans are predatory in nature and potentially unconscionable. The terms of the note and adjustable rate rider may conflict making it virtually impossible to properly disclose this in a truth in lending statement.
(14) Is the loan unconscionable and thus unenforceable?
(15) Was their any fraud, deceit or undue influence used against the elderly?
(16) If the lender targeted minority groups, where the contracts negotiated in the language of the borrower?
(17) Was there predatory underwriting on stated income loans (i.e. underwriter did not verify borrowers stated income via salary.com or in another manner as required by their internal policies - turning a blind eye and not following their own underwriting policies to get a loan done)
(18) Were there excessive fees that Violate HOEPA? Or YSP fees that are predatory in nature that feathered the nest of the broker at the expense of the borrower?
(19) Was the borrower asked to sign conflicting disclosures or documents such as two different ARM disclosures or two different truth in lending statements that reflect two different APR's or Interest rates (evidencing potential bait and switch or loan fraud practices)?
(20) Were FICO scores and credit risk factors properly disclosed?
As you can see, we are closely scrutinizing the work of the lenders and holding their feet to the fire. They have rules they need to comply with, and they should be held accountable where their legal violations are uncovered.
Note: There are no guarantees, promises or representations made that a loan audit will reveal any of these loan compliance or legal errors. Every file is different. We are never required to follow-up our audits or loan modification services with actual litigation. Attorney has the sole discretion whether or not to accept any litigation cases.
More information about our California and Arizona Forensic Loan Audits can be obtained at www.AttorneyMods.com
What documents are required for a loan audit?
At a minimum the following documents should be located and provided for a loan audit.
- Promissory note
- Riders and addendums to the promissory note
- Deed of Trust
- Riders and addendums to the deed of trust
- Loan program disclosures
- Credit score disclosures
- Copy of appraisal (if you have it)
- Good faith estimate
- Initial Truth in Lending Statement
- Final Truth in Lending Statement
- CHARMS Booklet / ARM Disclosures
- All other initial Disclosures
- Final HUD Settlement statement
- Copy of all loan applications
If you do not have these loan documents check with your original broker/lender or escrow company. A qualified written request may also help you obtain these documents.
Does a forensic loan audit guarantee a loan modification?
NO. There are rarely any guarantees that can be made about a loan audit. At best, these audits can be used to provide leverage for a loan modification (a lender does not want to be sued). In addition, these audits may raise legal claims against the broker who got you into the toxic sand predatory loan in the first place.
However, when it is your home that you are seeking to save, most of our clients have agreed that it is in your best interest to do everything possible to try to find some leverage that can potentially be used to assist you in obtaining a loan modification.
How long does the loan modification process take?
Typically you can expect the process to take anywhere from 30-150 days. If you are facing a notice of sale date the lenders have evidenced a willingness to movefaster. In many other cases, the process can be time consuming and re-submission of updated financials and new packages is always a possiblity.
The key thing to remember is to be patient and always provide accurate updated information as soon as possible after the request is made.
How much does a loan modification cost?
Prices typically range from $500 to $5,000. Contact us at (877) 276-5084 for our pricing.
What lenders have you represented Clients against?
The Law Offices of Steve Vondran has been processing loan modification files and has experience dealing with the following mortgage lenders and loan servicers:
- Bank of America
- Countrywide
- Chase
- Aurora Loan Services
- Washington Mutual
- Nationstar
- World Savings (Call us if you have a World Savings Option Arm Loan - we have been getting principal reduction in select cases)*
- Wachovia (Call us if you have a Wachovia Option Arm loan - we have been getting principal balance reductions in select cases)*
- Wells Fargo
Is it realistic to think a homeowner can obtain principal loan balance reduction in the loan modification process?
I would say realistically this is very difficult, although not impossible. My office was obtained prinicpal loan balance reduction on Wachovia - World Savings Option Arm loans in certain circumstances. Not all loans will apply.
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We are assisting California and Arizona loan modification clients. Attorney Sean Bodkin is licensed in Arizona only and only represents Arizona clients.
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Notice/Disclaimer /Contact Information: The preceeding information is general information only and not intended to serve as legal advice or a substitute for legal advice. For specific legal questions please contact a qualified attorney licensed in your state to assist you. There are no warranites or representations made that the following information is accurate, complete or up to date. In addition, any emails sent to us are not confidential and do not create an attorney client relationship. Please use your discretion before sending confidential information. The Law Offices of Steven C. Vondran is operated by Attorney Steve Vondran. Mr. Vondran is licensed to practice law in the States of Arizona and California and only seeks to solicit and serve Clients in these states. Mr. Bodkin is licnsed to practice law only in teh State of Arizona and serves only Clients in Arizona.
This is an advertisement and communication pursuant to state bar rules. There are no guarantees a loan audit will reveal any legal errors of compliance violations. There are likewise no guarantees any lender or loan servicer will modifiy any loan. Each loan, property, borrower, investor and servicer are different. In addition, there are no representations made that Mr. Vondran will accept any litigation case following a loan audit and/or a demand letter to the lender.
For more information about Mr. Vondran's law firm please visit www.VondranLaw.com the Attorney Loan Audit program can be reviewed at www.AttorneyMods.com If you are a California Real Estate Broker looking for a DRE Approved Advance Fee Agreeement please visit www.AdvanceFeeContract.com We have over 20 approved DRE companies as of this writing and have several advance fee agreement options available including an advance fee agreement that allows for outsourced Attorney Loan Audits and/or a letter to the Lender. We also have spanish advance fee agreements available.
If you are a homeowner and are looking for an attorney or law firm to handle your loan modification request, please visit www.loanmodsolutions,net Fill out the form and a representative of our firm will contact you promptly to discuss your situation. We also have loan modification information available at www.AttorneyLoanAudit.com
Homeowners who believe they may have been a victim of loan modification fraud should visit www.ModScams.com or www.LoanModificationScams.net to learn more about what you can do to fight foreclosure rescue scams.
Our Offices: California: 620 Newport Center Drive, Suite 1100, Newport Beach, CA 92660
Arizona: 2415 E. Camelback Road, Suite 700, Phoenix, AZ 85016
Phone (877) 276-5084 Email: Steve@VondranLaw.com
This is an advertisement and communication pursuant to state bar rules! We only seek to represent Clients in CA and AZ where the attorney and firm are licensed to practice law.
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