Bankruptcy Mediation Promotes More Meaningful Negotiations

Bankruptcy has long-term consequences you need to know and understand before you file.  However, sometimes Bankruptcy is the only way to have a meaningful conversation with your mortgage servicer. In Foreclosure Mediation, typically the bank’s representative appears by phone and does not have the authority to negotiate anything other than a HAMP modification (which the borrower is entitled to anyway without the added mediation fee).  It is difficult to negotiate if there is only one outcome possible. Bankruptcy is a way to make the bank put their money where their mediation is.  A Bankruptcy Mediation is different because it requires the representative to appear in person and to have authority to make a deal.  Bankruptcy Court has more teeth with monetary consequences for the bank if they do not comply with the rules. Even if you are having trouble communicating with your mortgage servicer, Bankruptcy is not for everybody.  Seek competent legal counsel to discuss all your personal and financial goals, and what legal choices are available to you.   Read More

Mortgage Modifications Update

Earlier this month, a California appeals court said homeowners could sue Wells Fargo for improperly denying permanent mortgage modifications.  That opinion could have a positive affect for homeowners nationwide. The Home Affordable Mortgage Program (HAMP) was started to help distressed homeowners avoid foreclosure by modifying home loans for lower monthly payments.  A HAMP modification has a three-month trial period that gives the lender opportunity to verify the borrower’s information, and to test if the borrower can make the modified payments. For many borrowers, the scenario runs like this:  they pay the three monthly trial payments and comply with the requirements only to be denied at the end.  Unless your paperwork is super-specific, most banks say thank you for your trial modification payments, and we will take payments four and five as well, and THEN turn you down. However, the California court said that if the bank does not turn you down within the three-month trial period, they have to give you the permanent loan.  The opinion states that the modification agreement is a contract (even if the bank did not sign)—thus if the borrower does A, B, and C, then the loan servicer has to do D. This federal case […] Read More

Mediation In Lieu of Foreclosure

Foreclosure Mediations are often a waste of time…except when they are not. Many Foreclosure Mediations have ended in a HAMP (Home Affordable Mortgage Program) modification, which the homeowner is entitled to anyway without the time and expense of mediation.  While Foreclosure Mediations are no longer mandated in Florida, homeowner distress—mental and in real estate—continues to thrive in mediations and other legal procedures. In many cases there are no good answers, but when your home and financial future are at stake, it may be worth looking at your legal options.  And every now and then a resolution stands out that is better than the rest.  Every now and then, instead of a HAMP modification, a Foreclosure Mediation results in a Deed-In-Lieu of Foreclosure. A Deed-In-Lieu of Foreclosure (DIL) is defined in layman’s terms by the Florida Bar as “a cancellation of your mortgage if you voluntarily transfer title of your property to your mortgage company.  Usually you must try to sell your home for its fair market value for at least 90 days before a mortgage company will consider this option.”    However, once the process is begun, generally it has to be completed within 90 days of initiation.  While a DIL […] 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