Thursday, February 18, 2010

Would you walk away from your house?

The nightmare may still stretch on even after you lose your home. Some people think that when they lose their home to foreclosure, short sale or deed-in-lieu, they can just move on.  That may not be the case.  The promissory note is your promise to pay the loan. Your home is the collateral for the note. Mortgage companies may release you from the collateral but your promissory note may still be in effect, which means you're still on the hook.
When your mortgage company sells your home at auction for lower than what you owe, you may still be responsible for the difference.  This deficiency can come back to haunt you in the form of a judgement. 
A recent homeowner defaulted on his $200,000 mortgage.  At the time of losing his home, he still owed $175,000.  The bank sold the home at auction for $100,000 which left the former homeowner on the hook for the remaining $75,000.  Subsequently, he had to file bankrupcy. "That was the one thing I was trying to avoid.  If I would have known this was going to be the end result, I would have filed when I was served with my foreclosure papers. Maybe I'd still have my home."
Once they have a judgment, they can pursue you anywhere. They can ask for financial records, have your wages garnished and, if you fail to respond, a judge can put you in jail.

With the skyrocketing numbers of foreclosures, more people will be plagued with deficiency judgements.  Many people have no recourse but to file bankruptcy.  So, starting over may not be as easy as first thought.

Monday, February 15, 2010

Advice to others trying to get things done

I was recently asked what advice I'd give to others going through the loan modification process.  My answer to that is simple... Document everything. All conversations, all phone calls, all faxes - everything!
When and if you qualify for a loan modification, you'll need to send documents to verify your qualifications.  Given Saxon has a tendency to shred or misplace vital documents, you'll need to make it goof proof.  Although, even with that done they'll still mess it up. 
I received a list of items that were needed. I took the time to retype the list of items into a numbers list. I then took sticky notes and afixed them to every document associated with the corresponding number. Each sticky note contained the doc type, #, Last Name and loan number. (don't forget to list total pages)
  1. All income statements, paystubs for all borrowers for the month of December. 
    • Income statements for John Doe (2 documents - 1.1 & 1.2) 
Then I photocopied the entire packet, faxed a copied packet and also mailed a packet certified mail.  I kept a copy for myself (of everything including the envelope).  Twice during the trial period, we were told they didn't receive something. I'd reference the list and say it was submitted as part of the loan packet. You'll find it on document # whatever. All documents have been numbered.  Both times I was told, oh you have them numbered.  We found the document, sorry for the inconvenience.  This anal retentive way of doing it did provide some assurance.  Good Luck to you.

Saturday, February 13, 2010

Saxon Mortgage Makes 2,497 Permanent Home Loan Modifications As Of December 2009. But where are the numbers?

In December 2009, it appeared Saxon was on the move.  They went from 42 completed modifications to 2,497. But in our case, the question still remains.... Where are the numbers?
We bought our home in 2005 for $85,500.  We are one of the very few who have been able to complete a modification with Saxon. It was not an easy process.  We signed our modification papers in December. We now owe Saxon Mortgage Services $97,000 and change.  But where are the numbers?  At no point during the process did they show a breakdown of the extra amount.  How do I know the late fees were actually waived?  They are supposed to be but without a breakdown, who knows.
We were given 30 days to review the papers and accept.  By the 7th of December, they were calling to ask if we had returned the signed documents.  They even offered us a $50.00 gift card if we return them before December 14th.  Whooopie!  This kind gesture sent up red flags for me. Why are you rushing me to return the papers?  I felt the need to have our Neighborhood Housing Services center review the contract before we agreed.  But did I have a choice, really?  Our home was scheduled to be sold later that month. If we didn't agree, we would have lost it all.
After getting the O.K. from our NHS agent, we signed and notarized the papers. Come January 30 we still hadn't received the final copies.  A call to the customer service department provided no help what so ever.  I was asked if I had made copies.  "Yes, but a legal binding contract requires all parties sign and notarize the contract.  I need a copy of the final paperwork."  I was told they don't send them. WHAT? In my eyes this modification was not final until I received a copy of the documents with their signature.  You wouldn't drive off a car lot without paperwork that proves you own the car.  Without the final documents, is my nightmare really over?
After much determination I was able to get a .pdf copy of our modification documents but to date, we have not received the official copy.  We are now underwater more than $35,000.  Just make sure what you're fighting for is worth the end result.

Tuesday, February 9, 2010

All in Due Time....

When other mortgage companies and banks were bracing for the impending 'pop' of the housing bubble, Saxon was acquiring servicing rights from other dysfunctional mortgage institutions such as NovaStar and New Century. Higher numbers of subprime mortgages meant a higher rating. This put them in a position to appear 'better' than some of the other banks.

I took the time to write to the COP with a different perspective.

“Let’s not measure a company’s success based on the number of ‘Trials’ extended to families. I feel you should base the success rate on how many have successfully completed a modification. Based on my own conversations with people enrolled in the trial period, very few have actually completed the process. Many signed papers and have never heard anything from their lenders. The trial periods are lasting longer than the expected 3 months and continue to be plagued with mismanagement, errors, and incompetence.

Your number 1 HAMP provider has an unsatisfactory BBB rating and poor business practices to the point that they have their own watchdog tracking their every move. I’d love to know just what constitutes them as # 1 in your book. I’d rate a company # 1 if they showed compassion and understanding in such an economic crisis; those that were willing to work with families who have seen hard times and help to fight to keep the American dream alive. This is not one of those companies.

By November 2009, the numbers were in and they didn't look too kindly on Saxon. Saxon had 35,565 active HAMP Trial modifications and had permanently modified 42. Yes, that's forty two. What a shame. Saxon had the potential to help 35,565 qualified borrowers who were participating in the HAMP trial and only managed to modify 42. I think the other 35,523 deserve an acceptable reason and not just another excuse.

Too Big to Fail Whom?

I, personally don't believe the government and the politicians grasp what many Americans are going through in this troubled economic time. People are walking away from their mortgages at a staggering rate, foreclosures continue to rise and roughly 10% of homeowners will end up underwater. That doesn't sound that bad.

Now take some time to read the stories behind those statements. The horror stories and nightmares will continue to ravage American families unless they find a way to reach those families. I believe a larger number of people would have been helped if the government had chosen to provide aid through a NON PROFIT ORGANIZATION that didn't stand to gain from the aid. If they want to help struggling families then they must go to where the struggling families are and not to Wall Street.  How do you think those folks on Wall Street got so rich?

It's aggravating to hear the government say the financial giants are 'too big to fail'. I'm certain the AMERICAN PEOPLE out number the financial giants by staggering numbers. Yet, the failure of the American People is apparently acceptable.

Here's something to get angry about. WE paid the TARF bailout money so the finanical giants could pay the bonuses they were contractorally obligated to pay. They accepted a loan from the AMERICAN PEOPLE in order to fulfill their obligations because they were unable to make their payments. They were in need and the generous American People came to their aid. But when those very same American people are backed into a corner the government fails to provide accessable aid to them.

Too Big to Fail? They have FAILED. They failed the American People.