The Transferring of Servicing Rights to Avoid Reviewing Complete Modification Applications
After years of litigating against alleged lenders, investors, servicers, and foreclosure trustee’s we are starting to see a clear trend of the servicing rights being transferred upon receiving a complete loan modification application. What is an alleged lender – this is usually the party that claims to have funded the original loan or the originator. The alleged investors are those who claim to have received an ownership interest in the loan through an assignment and endorsements or multiple assignments and endorsements. The foreclosure trustee in non judicial foreclosure states such as California are entrusted with overseeing the foreclosure process. The servicers are entities that claim a right to collect payments, modify the loan, etc. as agents of the principals (lender or investor). The servicer’s through an agreement with these other entities claim to have the right to enforce the note on behalf of the principal (lender or investor).
The servicer can start as one entity in the Deed of Trust and be changed by a simple letter from the original servicer to the borrower advising them that there is a new servicer. The borrower typically has agreed to such in the Deed of Trust. It is generally this servicer that the borrower or the borrower’s representative is negotiating with in order to conduct a short sale, short pay, cash for keys settlement, reinstatement, forbearance, and/or modification. The servicer could stay the same the life of the loan or switch anywhere from 1 to 10 times.
Each time the servicer changes the new servicer is obligated to credit the borrower’s account with all prior payments, honor any pending offers (for a short sale, short pay, settlement, reinstatement, forbearance, and/or modification), and continue to review any pending complete applications for a short sale, short pay, etc. However, many times this is why servicer changes are made so that the new servicer can claim they will not honor an offer to short sale, short pay, etc. or to state that the new servicer never received the complete package.
The above scenario will at most times be actionable; meaning this is something that is a cause of action. There is an obligation on the part of the new servicer to honor offers and pending complete applications otherwise, it is a breach of contract, among other claims. In addition, to there being an obligation on the part of the servicer to honor offers and pending complete applications you need to make sure that their failure to do such caused you or the party you are representing harm (damages).
MAKING HOMES AFFORDABLE – HAMP & HARP ARE GONE
Making homes affordable is an official program of the United States Department of Treasury and the United States Department of Housing and Urban Development. HAMP and HARP were government funded programs in existence until December 31, 2016. As of December 31, 2016, the programs no longer exist as there was a sunset statute. These two programs were designed to help struggling borrower’s who could no longer afford their mortgages to modify their loan under specific government guidelines. Now that these government programs have ended that does not mean modifications will end.
As far as the consumer financial protection bureau (CFPB) and Mark Mc Ardle, deputy secretary for the Office of Financial Stability is concerned ‘the economy is still not back on track and may take much more time while many homeowners are struggling, they still are having a difficult time making their mortgage payments. The CFPB has issued non-binding guidelines based on proven principles and protocols. Based on NPV (net present value); with this foundation the CFPB has stated principle goals for financial institutions to follow when dealing with at- risk homeowners including affordability, accessibility, sustainability and transparency. The overall goal is to prevent “avoidable foreclosures” and offer a win-win situation for investors and homeowners. ~ David Smith
There are still government sponsored programs as well to help struggling homeowners such as the hardest hit funds that reaches eighteen states. It is Keeping Your Home California for the state of California and offers funds to help with a portion of the arrears for reinstatement or modification. Additionally, the Making Homes Affordable website still has a vast amount of information contained on it; especially, if you are already in a HAMP trial or permanent modification.
If you are in California and are looking for help with foreclosure, call The Rodriguez Law Group, Inc at 626-888-5206 or fill out their online form for a FREE Case Evaluation. Let the lawyers and staff at The Rodriguez Law Group, Inc serve you!
I paid almost $3,000 to a loan originator who represented the actual loan holder to modify my mortgage and lower the interest rate. After I paid the full amount they modified the loan and lowered the interest rate although they did it with a ARM loan 5/30. After the modification, the rejected my first payment immediately transferred the loan to a new servicer who rejected the modification and called back payments accelerated. The originator who said his company owned the loan and he represented IMPAC, the loan holder, told me to skip a payment that I could have paid. I did this to pay his origination fee, which was double the payment amount. This was a ruse and outright misrepresentation and fraud. The new servicer said they did not have to recognize my new modification by the old servicer and the full past due was accelerated.
No one protects people from these intentional acts perpetrated by predator lenders to defraud and steal people’s homes.
How about transferring services 5 in 11 y to avoid a breech. In contract. And Qwr validation?
There is a transfer rule with the CFPB that may apply. Servicers are also required to provide a transfer package and debt validation form.