Poor distressed homeowner (Read: Careless banks) get Mortgage Modification extension
The national press did a significant job of publicizing the US Treasury directive that mortgage modifications not completed by Dec. 31 of this year, get an extension until Jan 31. No one involved in the mortgage modification industry believes for a minute that it is the distressed homeowners who need this extension. No one believes for a second that it is the homeowners who are failing to get supporting documents to their lender to complete their mortgage modification approved. No one believes for a nano-second that trial modifications are necessary for distressed homeowners. Yet the Treasury directive approaches the dilemma from that perspective.
Since the beginning of the federal effort to head off the huge foreclosure numbers, it has always been the distressed homeowner who has failed to complete the mortgage modification application. Those of us who facilitate mortgage modifications know what a huge lie that is.
The mortgage modification (and now short sale) companies I represent are 95% successful in negotiating affordable, beneficial mods and short sales. Why? Because the lenders/servicers dare not insult our intelligence by telling us we neglected to submit supporting documents. They dare not lose any of them either. We keep them on the phone (the decision-makers, not the tsk-tsk-ing call center pawns) until they find them. When our negotiators have 20 or 30 files for that lender in front of them, that dog don’t hunt.
This entire myth of overlooked, ignored or lost-in-the-mail documents smacks of “The dog ate my homework” from our school days. It shouldn’t have worked then, and it shouldn’t work now. But it does. The lenders aren’t buried in applications, they’re looking for an excuse to refuse the mortgage modification application.
Chances are, the loan servicer has calculated (secretly) that they’ll profit more from a foreclosure. It takes an experienced expert, with Matt Dillon waiting outside, to cut through the treachery.
Mandelman writes about this foolishness and bawls out the Treasury spokeswoman with his usual verbal flogging. Mandelaman does not represent any mortgage modification firms (although he has reviewed the ones I represent), so that’s what he routinely does. I have a solution, (bonded by the U. S. Dept. of Justice) so I don’t rail as much.
The fact that the Treasury department believes that this extension will provide more “transparency” is indeed hilarious though. Lenders and servicers have hidden every trick they possibly could since this whole mortgage modification craze started. Forthrightness is not gonna happen. Stay tuned for February. It’ll be interesting to see how many trial modifications get yanked without explanation, after the distressed homeowners have paid into their mortgage for those three or more months.
Read Mandelman here
