By Christine Springer
There have been quite a few interesting things unfolding these last few weeks!
Pass the popcorn!
Last week, I read some eye-opening statistics: of the borrowers who successfully negotiated a loan modification in 2009 under the HAMP program, 53% have re-defaulted. Further, among the total number of homeowners who participated in the program since its inception, over one third has defaulted.
There are probably many reasons why this statistic is so high, but that’s not the point of this post.
I have also started receiving phone calls from homeowners who are asking about using a loan audit to negotiate a modification.
Déjà vu, anyone? It’s like its 2009 all over again, except that now, the case law is better, especially in California and in Arizona!
I imagine that homeowners will be looking for leverage to renegotiate their loan modifications, and a detailed loan audit may be a useful tool.
I have always thought that attorneys should negotiate loan modifications, and I still do. I think a certain Bar Association went off the deep end, going so far as to disbar a lot of attorneys who were probably trying to help.
I am not saying there weren’t scammers out there – my point is that the government and other authorities in general regulated the parties, including people like me who offered loan audits, who were helping homeowners.
And, no one thought it would be so difficult to get a loan modification. Attorneys send out letters to get things done all the time, and I doubt anyone thought getting a loan mod would be so hard.
I mean, why wouldn't the bank want to modify a loan so that the loan would continue to be performing?
Unfortunately, it took the government too long to figure out that millions of homeowners weren’t all lying about the banks’ conduct with respect to loan mods and their shoddy paperwork.
We all know how that story ended, but it would seem that a new chapter is starting.
The California Supreme Court has “cracked open the door” for homeowners to pursue wrongful foreclosure lawsuits based on invalid assignments.
Credit Slips has an interesting post by Katie Porter, the California Monitor, who provided a concise analysis of the Yvanova case.
This is GOOD STUFF!
The Yvanova opinion is posted separately, but here’s a brief excerpt from the first page of the decision:
“The collapse in 2008 of the housing bubble and its accompanying system of home loan securitization led, among other consequences, to a great national wave of loan defaults and foreclosures. One key legal issue arising out of the collapse was whether and how defaulting homeowners could challenge the validity of the chain of assignments involved in the securitization of their loans. We granted review in this case to decide one aspect of that question: whether the borrower on a home loan secured by a deed of trust may base an action for wrongful foreclosure on allegations a purported assignment of the note and deed of trust to the foreclosing party bore defects rendering the assignment void.”
Although the Court states in its decision that its ruling is narrow, Ms. Porter’s blog post points out that Yvanova actually runs contrary to the developing body of case law in the Superior Courts.
You may remember when the mortgage pools were foreclosing and borrowers raised the issue that the PSA prevented late transfers. And, that the courts sided with the bankers, saying that borrowers couldn’t challenge the assignments because they weren’t a party to the Pooling and Servicing Agreements.
I think the Courts are just tired of hearing the same story from millions of homeowners.
Ultimately, Ms. Porter reaches a similar conclusion to mine, that this case may be too little too late. She says perhaps it would be more productive if there were faster, legislative remedies.
Barbara Forde told me years ago that the legislature could have fixed all the foreclosure issues by changing the laws.
CHRISTINE E. SPRINGER IS NOT AN ATTORNEY AND THE CONTENT ON THIS WEBSITE IS NOT INTENDED TO BE LEGAL ADVICE.
PURSUANT TO FTC’S MARS RULE, SECTION 322.5: DESERT EDGE LEGAL SERVICES, LLC IS NOT ASSOCIATED WITH THE GOVERNMENT. OUR SERVICES ARE NOT APPROVED BY YOUR LENDER. EVEN IF YOU USE OUR SERVICES, YOUR LENDER MAY NOT AGREE TO CHANGE YOUR LOAN. IF YOU STOP PAYING YOUR MORTGAGE, YOU COULD LOSE YOUR HOME AND DAMAGE YOUR CREDIT RATING