“We lost your documents” - or, “the documents are now too old, you need to resubmit more recent documents” or worst of all, “We never received the documents we requested so we are closing the file”. How I hate to hear these words. We all know that most of the time we were being lied to – but all anyone could prove was incompetence. Now newspapers have been reporting on how a Bank of America employee has spilled the beans on the bank’s encouragement of employees to undertake acts to delay and eventually deny loan modification applications even for borrowers that qualified under HAMP or internal bank programs. See the article here: Bank of America Loan Modification Lies. My feeling is that this procedure has been epidemic industrywide and continues even today.
Here is a story that too many people have experienced - at least the first part.......:
This month we handled a foreclosure case that originally came into my office 3 years ago. During the foreclosure the borrower successfully obtained a modification of the mortgage – or so she thought. And this brings me to my story.
The lender provided a loan modification offer with a trial payment of 3 months. After the three months our client did indeed obtain the loan modification documents, which were dutifully and completely completed and sent back to the lender in their provided Federal Express envelope. The client timely made each monthly payment thereafter. After a month, the lender sent a new package of loan modification documents which were entirely identical to the previous package that had been sent back to the lender fully signed. There was no explanation from the lender, but the client signed them again and sent them back to the lender in the lender supplied Federal Express envelope.
Well, as you might expect as this story progresses, after another month …. You guessed right! Another new package of loan modification documents arrived from the lender, again without any explanation. This package was entirely the same as the previous two packages except for one difference. This third package contained an Affidavit of Continuous Marriage. Well, the client tried reaching the lender by phone and by letter to find out why this document was in the package and to explain that she could not sign it - because she had never been married. The lender never responded and thus the borrower never sent back this third loan modification package (thereby saving the lender another bill from Federal Express).
Two months later another envelope arrived from the lender. In it was her check for her mortgage payment and an explanation that she was in default of the mortgage. Apparently the lender decided that the mortgage was not modified. Thus the foreclosure, which by then should have been dismissed because of the loan modification agreement but wasn’t, started progressing once again.
It came time for the trial and the lender said that they would delay the trial or even dismiss the case if the borrower resubmitted for the loan modification. Yeah sure, and then get denied after another year? No way! So we went to trial.....
Here is the best part -
In a trial on the merits of the mortgage foreclosure action we defended on the basis that the alleged default never occurred because of the loan modification agreement had been accepted. In effect there had been a settlement. The judge agreed that the loan had indeed been modified and the lender had indeed accepted the loan modification agreement documents (the lender admitted that they had received them). Further the judge told the lender that through its exercise of “equitable remedies”, all of the payments that the lender had rejected had to be added to the end of the mortgage and the lender could not demand the 18 months of unaccepted payments in a lump sum to “reinstate” the mortgage modification. Victory!
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© 2013 Richard P Zaretsky, Esq.
Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com New Website www.Florida-Counsel.com.
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