WELL FOLKS, WE HAVE BEEN TALKING ON OUR RADIO SHOW FOR SEVERAL WEEKS NOW ABOUT THE SB94 LOAN MODIFICATION LAW. THIS LAW WAS INTRODUCED BY SENATOR CALDERON (BANKING AND FINANCE COMMITTEE) AND WAS DESIGNED TO PREVENT ANYONE (INCLUDING ATTORNEYS AND REAL ESTATE BROKERS) FROM ACCEPTING ANY ADVANCE FEES FROM ANY CALIFORNIA HOMEOWNER FOR LOAN MODIFICATION SERVICES OR LOAN FORBEARANCE SERVICES. WHAT THIS TRANSLATES TO IS THAT ATTORNEYS AND BROKERS CANNOT ACCEPT ANY MONEY IN ADVANCE OF PERFORMING ALL SERVICES THEY CONTRACT FOR (I.E. THEY WILL HAVE A HARD TIME PAYING THEIR OVERHEAD) AND THEREFORE VERY FEW COMPANIES, INCLUDING ATTORNEYS, WILL CONTINUE TO HELP CALIFORNIA HOMEOWNERS WHEN IT COMES TO LOAN MODIFICATION SERVICES. SENATOR CALDERON CALLED THE SIGNING OF THE BILL ON OCTOBER 11, 2009 A "HUGE VICTORY." NOT SURE IF HE MEANT A HUGE VICTORY FOR THE BANKS AND LENDERS OR A VICTORY FOR CALIFORNIA HOMEOWNERS. KEEP IN MIND, A HOMEOWNERS "FREEDOM OF CONTRACT" WAS LITERALLY STRIPPED AWAY LEAVING MANY HOMEOWNERS ON THEIR OWN TO PERFORM THE FOLLOWING LOAN MODIFICATION SERVICES WHICH APPARENTLY THE BANKS WOULD RATHER HAVE YOU DO FOR YOURSELF: (1) Review your loan documents for instances of predatory lending, including finding truth in lending violations that may give you a right to rescind your loan. If you know how to do your own forensic loan analysis, great for you. Lenders and loan investors would prefer you do not raise any legal violations over the loans they either originated, or purchased on the secondary market. (2) Pull a chain of title and send debt validation letters to lenders, investors and loan servicers seeking to foreclose on you (i.e. make them validate that they are owed a debt). (3) Send a demand that the loan servicer identify the holder of the loan (so you can validate the debt and make sure the chain of title is accurate). The failure to comply raises a legal claim. (4) Ensure that California foreclosure laws are followed - 2923.5-2924 et seq. (the failure to comply raises a legal claim) (5) Send a qualified written request to challenge any billing, fee, or accounting disputes (the failure to comply raises a legal claim) (6) Package and submit your financial documents (7) Draft and submit a hardship letter (8) Introduce relevant comparison properties so that the lender can calculate the true loss that will ensue by pursuing foreclosure (net present value test). Also lends itself to 2923.6 arguments. (9) Contact the lender on a weekly or bi-weekly basis to ascertain status on your case (if you do not call with frequency and log your calls, we have found you tend to get lost in the shuffle etc.). Note, homeowners trying to save their homes normally have jobs, and trying to take a 1/2 hour to an hour a week to call your lender while at work may not be a smart move. Also, if you would rather pay someone to avoid this, you have no right to do so. (10) Review and advise on trial plan offers (having seen several different plans, professional advisors are better equipped to tell homeowners what the "contract" means) (11) Re-submit your loan modification package if you are denied These are just some of the steps legitimate and quality lawyers and brokers can provide. However, the state feels you should be well equipped to do this yourself. You do not need to pay anyone to help you. If you cannot do it, then you are advised to call HUD.gov free counselors. Those are your only choices (assuming of course that you cannot find a broker or attorney willing to work for free and hope that you pay them at the end - a risk most are not willing to take based on my conversations with fellow professionals). So there you have it folks, another lost freedom - the freedom to contract as you see fit. As Benjamin Franklin said, those who trade freedom for security will get neither and deserve neither. Since we cannot perform loan modifications and accept advance fees, our show will discuss the legal side of foreclosure. Our office is still accepting World Savings and Wachovia Loans on a 100% contingency fee basis (no advance fees). Other than that, our only other function appears to be limited to filing lawsuits to vindicate predatory lending loans and/or to file for injunctions (assuming these acts are still permitted which we are currently researching). Again people, if you do not stand up for your rights, you will lose them as we have seen. Loan modification fraud has always been illegal and subject to prosecution and we just wish the right to earn a living and provide a legitimate service to some California homeowners who required it would have been protected. Last I checked, the banks were not opening their doors and allowing you to bring in your loan file to your local bank and have them consider you for a loan modification on the spot (heck, the love fees they could even charge a fee which most people would be happy to pay if they could be quickly considered for a modification). Instead, they are put into a 3-12 month pipeline and essentially asked to fend for themselves. A "huge victory" senator Calderon? ____________________________________________________________________________________________________
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