Loan Mod Lies | Were You Forced to Waive Your Rights to Get Help?

Were You Forced to Waive Your Rights to Get Help?

by Paul Kiel ProPublica

ProPublica recently learned of several cases where mortgage servicers required homeowners to waive their rights as part of an agreement to avoid foreclosure. In these cases, contracts provided by home mortgage servicers included clauses requiring borrowers to waive rights or state they had no defense to foreclosure.

It’s hard to tell how widespread this practice is. In some cases, mortgage servicers insert ambiguously-worded clauses that could later limit a homeowner’s defense to foreclosure.

Here are just a few examples of the clauses we found deep in the fine print:

From a Selene Financial Forebearance Agreement

From a Citi Modification

From a Bank of America Forebearance Agreement

Do any of these look familiar? If you have signed a forbearance or modification agreement, please take a close look at the fine print and then share your experiences with us. Simply email me [4] with the subject line “Waiver clause.”

Follow on Twitter: @paulkiel [5]


11 Responses to “Loan Mod Lies | Were You Forced to Waive Your Rights to Get Help?”
  1. Bill McAuliffe says:

    Altho I MAY have lost my “Condo” to Bank “A”, This is exactly the reason I chose to remain silent with “them” with some advice from a brief conversation that I paid for with an Attorney from the State in which I “Owned” the property. By allowing them to consider modification, (if you read the print “finely”), you will notice that you are in essence agreeing that you owe “them” your Mortgage Pmts.: Which could very well be false with all of the securitization and “sales” and transfers of title. This is a reason I became SO distraught with the “Sriker” ammendment in Az. e.g. Bill Sb 1259. Check THAT out, and you’ll wonder if you still can read! I’m still paying on a Mortgage on another residence with the same entity, and wonder if I should even continue with IT! My Faith and Hope remains. I hope they are all brought to Justice.

  2. Robert Smith says:

    I have been informed by BOA that my loan is now more than ninety days over due, and mortgage foreclosure proceedings will be accelerated.
    I am waiting to hear if my MHA Government restructure program has or will be approved. It has now been over three months. I am told that my application for MHA is now in an accelerated state and to keep on asking each week. As the date of foreclosure approaches, I am concerned that I will loose my home

    I am considering taking legal advice the first is KEL Kaufman Englatt & Lynd in Orlando Florida, working on behalf of clients with the banks in obtaining MHA loans for clients.

    The second is The Ticton Lawyer group specializing in a litigation program identifying toxic loans and fighting the bank through the court system.

    Has anyone any knowledge of these two companies and their record of accomplishment, any help much appreciated.

  3. Glenda says:

    Absolutely…almost every single modification agreement in the last few months have the same clauses…I make sure that the homeowner understands FULLY what rights they will waive if they do sign the agreement. The worst part is most of the TRIAL homeowners I have, almost a year later making payments are being KICKED out or DENIED for NO REASONS at all…so at the end of the day…WHY even sign such ridiculous agreements when there is a 75% chance they are not going to honor the agreement anyway!!! INSANITY!!! REPORT THEM TO THE OCC IMMEDIATELY….

  4. Pamela says:

    Anyway they can scam you they will,and if you think this is bad you ain’t seen nothing yet.It can and will get worse and they will keeep trying to get away with it.Entitled and Enabled.

  5. JamesM says:

    You may try submitting the application but with any waver of rights clause struck out. Just cross out the offending clause.

    If they cannot accept an application for a trial mod without you waving your rights, then don’t do it. Most modifications never become final, most still end up in foreclosure, so you probably need to preserve all your legal defenses.

    You may not know what defenses you have at this time. This is often not discovered until after you are in foreclosure, and your attorney or you have done discovery, examined the documents and taken depositions. So waving your legal rights under an existing contract, which favors the lender to start with, is not a good idea.

    There is nothing in the Federal HAMP program that authorizes or requires borrowers to wave their rights to apply or to enter a HAMP modification program.

    Such attempts to abuse your legal rights, by getting you to wave them in exchange for nothing, (if you don’t get a permanent modification you got nothing in the end), is unscrupulous and hopefully will not hold up in a court of law.

    • JamesM says:

      Thinking further about this…. The issue of if such a clause can be enforced in court….
      Seems to me that if the result of the modification is that it does not work out, and they foreclose any way, you have recieved nothing in exchange. They did not lower the orignal intrest or wave it during the application process or the trial modification period.

      When they come to foreclose they claim the money paid during a trial is put in a separate account and NOT applied to the principle and intrest on the underlying mortgage. So you end up owing all the missed payments, at the orignal rate, plus intrest, plus penalties for late fees. Late fees even though your modification payments were all on time, because the modification payments were not applied but kept in a separate, non-intrest bearing account.

      So exactly what “consideration” did you get in the end out of that “contract” which contains the clause waving your rights? If the modification does not become permanent, is the application an enforceable contract? Lawyers and legal beavers feel free to chime in on that one.

  6. Stupendous Man - Defender of Liberty - Foe of Tyranny says:

    Every loan mod offer I’ve seen (perhaps 100 of them), including the one extended to me, included indemnification language to the banks. In essence they have required the borrowers to waive rights lof legal remedies for and past bad deeds on the part of the bank, AND ANY FUTURE BAD DEEDS!!!

    Signing a contract with that, or similar, language is, in my opinion, insane. Even more so when it involves a bank (such paragons of virtue).

  7. Debbie says:

    So, what choice does a borrower have? Either sign the agreement to get the final modification or do not sign and lose the house to foreclosure?

    • TheHutMaster says:

      Great question Debbie.

      I too see this BullShit in the mod offers our clients receive.

      MERS, Affirmation of the NOTE and all kids of tricks.

      It seems that the T.A.R.P rules had language against this although…….
      Rules do not seem to bother the CRIMINAL BANKSTERS.

    • pamelag says:

      they don’t modify they won’t modify it is just another dirty trick to give homeowner false hope. GMAC (ally et al) offered me a mod, sent me the ‘packet’ and when i asked ? @ where is this $ going, what is my balance, is this over, ,, they then called to say i didn’t qualify. somehow they are rewarded again and again for having fraudclosures on their ‘books’ Good luck to all of you. you are in my prayers. God Bless America

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