December 2009

31 Dec New Year’s Resolution–Don’t Be Financially Illiterate

Anyone who works with consumers these days--attorneys, housing counselors, lenders, and brokers and, for that matter, anyone who reads media reports on the mortgage crisis--has no doubt reacted to some tale of financial woe like this: "How could anyone be that dumb!" We've all heard some version of the exploding ARM, the payments which are higher than the borrower's monthly income, the "liar's loans" with no proof of income (or anything else) required. Whether we are reacting to the lender's nonsensical approval of the loan, or the borrower's outrageously optimistic assumptions, at some point we come across a scenario that just boggles the mind. Of course, in many of those cases, there is an explanation, if you know the background. Many transactions which appear ridiculous in hindsight made perfect sense, or at least some sense, at the time they were transacted. But there may be a bigger issue at work here: Americans' abysmal financial literacy.
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30 Dec Does Fannie Mae or Freddie Mac own my loan?

As a Florida foreclosure defense attorney, one thing I’ve learned is that mortgage servicers don’t want homeowners to know who owns their loan. In about half of all foreclosure complaints I see, the servicer is the plaintiff, and the identity of the owner is not revealed in the pleadings. Generally speaking there are 4 owners of mortgage notes: the originator (the rarest of cases), a securitized trust (known as a REMIC), Fannie Mae (Federal National Mortgage Association) or Freddie Mac (Federal Home Loan Mortgage Corporation). If your foreclosure complaint is filed by an entity other than the exact originator named in the mortgage note (the note should be attached to the complaint), you need to determine whether the plaintiff is the servicer or the alleged purchaser of your home loan. If the plaintiff is the entity who normally accepts your payment, such as Wells Fargo, Bank of America, Citi, Chase, etcetera, you can bet it is not the owner. The plaintiff may admit as much in the pleading, with a statement like, “Plaintiff, as the servicer for the owner, has the right to foreclose on behalf of the owner and holder of the note and mortgage.”
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29 Dec Foreclosure Rescue Scams Deluge Homeowners

If your property goes into foreclosure, you will find your mailbox (and sometimes even your phone, e-mail, and front oor) full of offers to "help" you. You may wonder how they know to contact you. The answer is simple--they data-mine the court files or any other public record created when a foreclosure is begun. You may have some offers from legitimate housing counselors, but you may also have offers from less legitimate outfits--everything from sophisticated sales pitches to those who strictly prey on fear of losing a home, and even those who try to convince you that they operate in some official capacity with your lender or even the court.
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29 Dec Why Do Creditors Rarely Show Up at Chapter 7 341 Hearings?

Today, December 29, 2009, was a cold and miserable day in Atlanta, Georgia. Unfortunately I had a Chapter 7 bankruptcy 341 hearing to attend at the federal courthouse in Atlanta. I bundled up the best I could, took the train to the nearest stop - about 1/2 a mile from the courthouse - and braved the cold windy weather. As my client and I sat and waited for our case to be called, I noted case after case was called and heard by the trustee and that in none of them during my hour stay did any creditor show up. My client seemed surprised by this - he was expecting to see representatives from several of the more aggressive credit card lenders who had been harassing him. In fact, creditors rarely appear at Chapter 7 341 hearings - at least that is the case here in the Northern District of Georgia. Why? There is little that creditors can do at these hearings. In the Atlanta district, Chapter 7 341 hearings are scheduled at the rate of 5 to 7 every 30 minutes. This means that the Chapter 7 trustee will devote all of 5 minutes to any one case. Creditors who are familiar with the process don't bother - knowing that there is not time to ask any significant questions, and creditors who are not familiar with the bankruptcy process will find themselves cut off by the trustee after just a few questions.
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28 Dec Propping The Door Open: Treasury Orders That Trial Modifications Won’t Expire

In a surprising move, the Treasury Department issued a news releaseof a newdirective that any trial mortgage modifications which are set to expire by 1/31/10 be continued AND the servicers cannot cancel the modification for any reason other than that the property doesn't meet the property requirements under HAMP.
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