Standard Operating Procedures in Foreclosure Mediation

Negotiations with your loan servicer is not neuroscience, but you do need to work with a brain that has the authority to make a deal.  In most cases, the loan servicer sends someone with as much creativity and signing power as a toenail clipping.  Let us say you are dealing with a large law firm that is representing your mortgage loan servicer, the standard operating procedure goes something like this: You send them something and it takes ten days to get to the right person.   The person you talk to on the phone is not the person in charge of your file.   The person (who is not in charge of your file) tells you, “We cannot give you what you want, but we’ll take your information”  (after you have already provided said information eight hundred times in triplicate).  That would not happen in Bankruptcy Court. Bankruptcy is becoming a popular standard operating procedure for borrowers because it motivates more meaningful conversations with the loan servicer. A Bankruptcy Mediation requires the representative to appear in person (not by telephone) and to have authority to make a deal.  Furthermore, there are monetary consequences for non-compliance with the rules, and there are audit […] Read More

Fuzzy Photos of Foreclosure Mediation

Foreclosure mediation—you ever seen one of these work?  You may have fuzzy photos, but there are better portraits of the Loch Ness monster than a clear picture of success through foreclosure mediation.  In theory it is great; in practice it is…. The problem is no person on the planet has authority to negotiate.   The loan servicer is supposed to send a representative with full signing power, but with mortgage-backed securities, the loan ownership is so ambiguous that there is no one who can make decisions beyond HAMP (Home Affordable Modification Program).  Bigfoot’s autograph has more signing power than the loan servicer’s representative. Furthermore, the homeowner is entitled to HAMP anyway.  Homeowners should not have to spend their time and money (half of the mediation fee) on foreclosure mediation when they are already entitled to the result. Not much of a negotiation if there is only one outcome, and even less value for the homeowner if has to pay for what he was already entitled to. Read More

Adjustment in the Legal System

Some plans work better than others.  Whether you are plotting a route to Minneapolis or what to do about your unpaid mortgage, two things apply:  (1) more than one choice is available, and (2) not all choices are equal, meaning one option may be better suited to meet your needs and goals than others. On a statewide scale, the court system from time to time comes up with strategies to handle the foreclosure crisis.  Managed Mediation was not one of their better plans. In theory, mediation is not a terrible idea.  Mediation is often a way for two parties to work out a conflict without having the matter decided for them by a judge.  It can be very good, like for Therapeutic Divorce. In practice, however, Managed Mediation for Foreclosures only had a single outcome:  HAMP (Home Affordable Mortgage Program).  Though the loan servicer was supposed to send somebody with full signing authority for whatever deal was made, typically the lender’s representative sent someone only authorized to offer HAMP.  Not much of a negotiation if there is only one outcome. Furthermore, homeowners are entitled to HAMP anyway without having to pay their half of the mediation fee.  Homeowners should not […] Read More

Full Authority in Foreclosure Mediation

“Help me, Obi-Wan Kenobi,” Princess Leia says from a projected image.  It is a one-way communication, effective in that it reaches its intended recipient, the Rebel Forces are gathered, and the galaxy far far away is saved from the evil Empire.  Hooray for Princess Leia, but she was not trying to mediate a home foreclosure. Banks notoriously send a representative who lacks full authority to settle.  If the foreclosure mediation proceeds beyond a HAMP modification, the bank’s representative has to opt to “phone a friend.” In the midst of the mediation, if the bank’s representative has to call someone else to get permission, then that person on the phone is at a disadvantage.  He has not necessarily heard the borrower’s position or the mediator’s comments or the back and forth.  How can the guy on the phone make a good decision when he is not necessarily aware of all the mediation’s proceedings? The purpose of mediation is to help get parties to settle a matter, but you cannot negotiate with someone who only has the authority to offer one option.  Full authority in foreclosure mediation is our only hope.   Read More

Foreclosure Mediation: Check, Please!

So you go out to a restaurant and the service is lousy and there is only one thing on the menu.  Sounds like Foreclosure Mediation—check, please! Foreclosure Mediation is supposed to be a negotiation, but in reality, it is a monologue.  You cannot negotiate only one option.  And you cannot negotiate with someone who only has the authority to offer one option. The Florida Supreme Court mandated Foreclosure Mediation in 2009 to help relieve the backlog of cases, but the program stagnated over the singular result of all Foreclosure Mediations.  A high court panel recently recognized the problem. Loan Modification (despite its mythic proportions) can be a viable resolution to foreclosure…so can a handful of other choices.  Of the 350,000 foreclosure cases in Florida, they are not all alike.  Homeowners benefit when they have more than one option. Foreclosure Defense offers a variety of choices, allowing the Homeowner to customize a strategy to his individual situation.  Meanwhile, a legal defense questions the Lender’s authority to take action, keeping default from overtaking the Homeowner before a strategy has the chance to work. In the mayhem of Mortgage Backed Securities, does the plaintiff really own the loan and have the authority to […] Read More