One of the stranger provisions in the proposed Helping Families Save Their Homes in Bankruptcy Act of 2009 is the requirement that the debtor certify that he attempted to contact the “holder” of the claim to discuss mortgage modification within 15 days prior to the commencement of the bankruptcy case.
First of all, who is the “holder” of the claim? Is it the servicer? Is it the trustee of the securitized trust that now allegedly owns the note and mortgage?
Next, how does the borrower “attempt to contact” the holder? In writing? Which phone number or mailing address?
This “condition precedent” is impossible to monitor. How can the debtor’s certification possibly be refuted by the lender? Heck, we ARE talking about the same industry that cannot ever find the borrower’s original promissory note!
This provision presumes that the homeowner is not proactive in saving his house. I represent literally hundreds of families in foreclosure, and every single one sought help and cooperation from their lender.
The truth of the matter is that the lender should be required to certify that it has negotiated in good faith with the borrower. So far, lenders have provided no meaningful assistance. To the contrary, many of my clients are advised by their lender to stop paying their mortgage to be considered for a modification.
Is there any wonder our financial institutions are going belly up?
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