Discussion on Gov. Schwarzenegger Moves to Deprive Homeowne

Schumpeter Reincarnate Joined: 24 May 2008 Posts: 50053

Posted: Sun Jul 05, 2009 4:06 pm

Martin,

The Gov and CA politicians are simply doing a PR ploy again, and have not thought it out. Or maybe they have.

Attorneys have an "out" on this legislation. Attorneys do not do loan mods......they "litigate". The end result is that there will be more and more lawsuits filed.

The Ca government cannot legislate that attorneys cannot file lawsuits on behalf of their without money upfront. That would be a violation of the US Constitution, not allowing a person their day in court, to be confronted by their accusers.

Pat

Dud? Joined: 12 May 2009 Posts: 5

Maybe, just maybe there is more to this legislation. Perhaps our Governer is looking out for the homeowner's best interest. Or perhaps it is pressure to create this legislation because the lender is putting pressure on the State in order to play nice regarding outstanding loans to the State or because the State may need to borrow money to close in on their budget. It just seems odd that all of a sudden after so many years that any State would do anything in the best interest of the consumer. I mean, if they were then why not look at credit cards and outlaw high interest rate, or how about looking at what banks charge for fees and outlaw those or perhaps put together real legislation that ensures that every homeowner gets a true and fair review by lenders regarding a mortgage modification. It would help if our legislature would clearly explain why they are doing what they are doing to understand it. Don't just slap a label on it touting "protection".

Posted: Mon Jul 06, 2009 10:59 pm

casi,

Where is the protectionism in this bill? It is only protecting the Servicer's and the lender. There is none for the homeowner.

The results of this bill passing would be the end of loan modification firms in the state. The firms currently doing mods do not have deep pockets. They cannot fund operations indefinitely, until the servicers grant the modifications and the homeowner is then required to pay the mod company. Anyway, the servicer will simply stall the negotiations until the mod company has to close its doors. It is simple basic economics.

If the attorneys are prevented from charging up front fees, then they will simply quit taking the homeowner as a client. They cannot afford to do legal services on a contingency basis either.

The bottom line is that this bill only serves one purpose. It is designed to stop the modification industry, and allow servicers to quiicly foreclose on homeowners.

Dud? Joined: 12 May 2009 Posts: 5

Don't misunderstand me, I completely agree with your statement. I absolutely do not believe that anything is being done to protect the home-owner. I absolutely believe that the Lender is looking at modification default rates and deciding to take the loss (which is funded by us tax payers by the way) and find a better home-owner. The lender wins by going the foreclosure route, they gamble by taking the modification route. Some will pay and some will decide after the emotions are drained that it does not make sense to pay on a house that is upside down. I think the biggest problem is (and I would love to find this out) that none of our folks in our California legislature face financial hardships (I'm pretty sure that Arnold doesn't) so how can any of them relate to joe-six-pack home-owner and what they are going through? Heck, they can't even find a way to budget and these are the financial wizards whose lead we are supposed to follow? Their best thoughts are to close public parks and tax soda to balance a 24billion short-fall. That's a lot of soda tax.

Flash in the pan Joined: 10 May 2009 Posts: 47

Chalk another one up for the banking lobby. The fact that this bill can even be considered is shameful! WE NEED STICKS!

Dud? Joined: 13 Jun 2009 Posts: 2

The does not prevent borrowers from having legal representation. It just prevents them from working with attorneys that want to be paid before they perform any services. What's wrong with that?

Dud? Joined: 24 Jun 2009 Posts: 7

I wouldn't want some attorney's girlfriend (the receptionist) defending me in court. Would you? I paid for the attorney. If we agree that non-attorney backed firms are dangerous, then why do we not also look at the screwed up attorney model we have now. I retain your services, yet you take maybe 200-500 apps (per month!!). You never see my file and neither does a paralegal. The real scam is the attorneys making money off this without lifting a finger while the bulk of the work is being done by negotiators (with no legal background) who make about $3000 a month. I was in one office and there was some 22 year old kid "processing" 100 files and on the phone "negotiating" with the bank. It's full of @rap if some attorney tries to tell you otherwise. They couldn't handle the volume. So I for one agree with Arnold on this one--the scam is the attorneys (who btw-some of these guys are the shadiest characters with real nice criminal backgrounds). The attorneys came about as a "shield" to protect the company owners *ss. If someone who works in this business can tell me otherwise, please do. For every one attorney you can tell me that is actually working on each case, there are 50 that are not. We would let no other business anywhere get away with this.

Flash in the pan Joined: 10 May 2009 Posts: 47

Milkyway5,

If you are need of employment, you may want to check out your local HUD office. I'm sure there is a prominent position that awaits you.

Dud? Joined: 11 Jul 2009 Posts: 1 Location: California

I know some excellent lawyers but none of them are qualified to do a modification on a mortgage note.

Here is the Truth regarding loss mitigation...

Dealing with the servicing companies is the wrong approach and anyone who knows what they are doing knows this... Consumers have little idea of how the banking system works and it appears most others don't either. SB94 is well intentioned but there is a huge gap in the knowledge of the true process it is scarey. Lawyers can be good folks, I know good ones and bad ones just like I know good people in every industry and bad ones... BUT in my opinion and experience indicates that most people know little about loss mitigation practices. Negotiating with the servicing company of a note is as ridiculous a practice as sending a little league pitcher into the majors. Time to get real folks... The industry is full of lies and people who know nothing! If an attorney or anyone else claims to do loan modifications with servicing companies then they have either zero knowledge or they are scammers going after the money. You should deal directly with the investor or guarantor of the note... lender negotiated mods have a very high re-default rate... why? because these types of mods are bull-poo poo... plus, anyone charging upfront fees are not ethical--sorry but any legitimate real estate transaction is paid for performance, how many of these attorney backed firms actually do a consultation? But that really isn't the point, the point is everyone jumped into the mod biz because of the money and very few infact, there are only several companies in the loss mitigation space that are legitimate...in my opinion...
If you are a consumer, a law maker, anyone in local government you need to learn about the practice of loss mitigation. Sb94 shows the ignorance of the industry even though the intention is good.

Borrowers: Ask TWO important questions when talking with an attorney or loan mod company... Who do you negotiate with? If they say your servicing company like B of A, Chase, etc... RUN!!!!
Do you charge upfront fees? Yes...RUN!!!!!

The truth is most attoney backed and other loan mod companies are unable to fund--most don't truly have a back-end practice which negotiates and if they do they do what you could do yourself and that is get NOWHERE by dealing with your servicing company. Your servicing company has no interest in dealing with you because they get paid regardless if you perform on your note or not! They get paid! And most of them hope the note will cure itself...

The biggest scam is the lack of knowledge by politicians about loss mitigation practices.

Questions? just post them and I will open your eyes!