Mortgage-Mod-Monster

FTC doesn’t get it – Mortgage Modifications and Short Sales demand attorney assistance

Increasing pressure on the Federal Government to control mortgage modification firms has encouraged the Federal Trade Commission to recommend not allowing up-front fees for professional mortgage modification negotiations. Because of the highly publicized failure of many companies to perform promised mortgage modifications, this would seem to be a great idea. As ususal, hasty and knee-jerk reactions to those few ill-prepared companies, or just plain crooks, will further hamper what is an overall well-intentioned industry.

This will assuredly apply only to mortgage modification firms that are not attorney-driven or attorney-backed. Professional mortgage modification firms are all attorney-driven. They must be to combat the banks that pull out every treacherous trick to stall, neglect, and refuse any mortgage modification. No professional attorney will ever promise a given outcome of a legal process. They cannot be held accountable for other humans (the protagonist in any legal dispute, and the arbitrator) to not use good sense. 

The banks will use their illegal ‘trial modification’ stalling techniques to ensure that mortgage modification is not a profitable endeavor. We already know that the non-profit counselors are essentially inneffective in obtaining beneficial, affordable mortgage modifications. The banks and un-informed public will then rise up and blame the President, US Dept. of Treasury, and federal government in general for the failure of the Home Affordable Mortgage Plan, or HAMP.

A little perspective might help. Imagine going to Wal-Mart and promising to pay for an item three months from now, after you were sure it would perform as promised. The similar much-publicized law passed last summer in California in June has done little to stem any crooks or other ill-prepared
mortgage modification firms. Why? Because almost all the billable negotiations are performed within a week of modification application anyway. The reason a permanent mortgage modification takes so long is directly the responsibility of the banks doing everything they can to avoid negotiating. Why should a professional organization be held hostage by a ne’er-do-well lender?

If the FTC would apply the same performance standards to banks as they propose to mortgage modification firms. it would be fair.

For full disclosure, the mortgage modification firm I represent in California and Colorado has enlisted the oversight of the U. S. Dept. of Justice. This company, with the USDoJ blessing and behest, performs a forensic mortgage audit to discover errors in the final mortgage documents originally issued by the lender. We charge $2995 for that service. It’s a good investment because there is an 85% chance there are mistakes in the original documents, called the HUD-1s. Now, we also give a free mortgage modification to go under it. Imagine a $3000 frosting with a free cake to go under it. It works. It’s professional, and it keeps us in business to continue saving qualified homes from foreclosure.

Still, the FTC would do well to take a breath and do what really benefits the hapless and abused distressed mortgage owner.

Read it here

Comment to the FTC at:
http://public.commentworks.com/ftc/MARS-NPRM