Some of you are probably trying (unsuccessfully) to get a loan modification.  You’ve submitted your loan mod several times, only to be told “you don’t make enough money to qualify”, and then be told “you make too much money” on your next app.  We know the scam these guys are doing.  Remember, they are in the foreclosure business…not the loan modification business.  This whole “loan modification” business was really created by the banking industry because it was forced upon them as a good publicity maneuver.  Just understand the act for what it is…just that, an act.  It’s there to keep you holding on to false hopes.

In my previous post about the loan modification process, I shared with you a deposition from a Chase employee who was told that he needed to do whatever he can to give borrowers the run around, but ultimately deny their loan.  I’m sure many of you have experienced the other end of this.

So how would you deal with this sort of deceit?

Here are some strategies you might want to consider.

1) Before agreeing to any more loan applications, write to your lender.  Ask them to stipulate to the following statements in an affidavit form:

“Please stipulate and warrant that you are the owner of the obligation, or have the authority from the owner of the obligation to modify my loan.

If you can not or will not stipulate and warrant that you have the authority to modify my loan within 30 days, then you fully admit that you never had the authority to modify my loan.  You acted not in good faith and are practicing fraud and deceit.

This is an admission that will be used in all future litigation against your company.  You can not represent that you have the ability and authority to modify my loan while hiding the fact that you actually do not have such authority.”

BE SURE TO ASK FOR THE SPECIFIC NAME OF THE PERSON MAKING THE DECISION FOR YOUR LOAN MOD. You can get a deposition from this person if you move in to litigation.

2) Get a Securitization Audit.

If you get a third party expert witness to testify that your loan has been securitized, then present the audit to your servicer.  Ask them pointedly:

“It seems that my loan has been securitized.  Please see the enclosed securitization audit.  If my loan has been securitized, then you no longer own my promissory note.  If this is the case, then I am very confused.  Please explain to me how you have the authority to modify my loan.

Please stipulate and warrant that you are the owner of the obligation, or have the authority from the owner of the obligation to modify my loan.

If you can not or will not stipulate and warrant that you have the authority to modify my loan within 30 days, then you fully admit that you never had the authority to modify my loan.  You acted not in good faith and are practicing fraud and deceit.

This is an admission that will be used in all future litigation against your company.  You can not represent that you have the ability and authority to modify my loan while hiding the fact that you actually do not have such authority.”

For more info on getting a MSI Securitization Audit, click here.

3) Sue Your “Lender”

If you can gather enough evidence to prove that:

a) Your servicer has no authority to modify your loan, yet represent that they do.

b) They have acted not in good faith…and have continued to deny your loan mod, time and time again…especially with contradictory statements like “you make too much money” followed by “you make too little money”.

c) Find out from your securitization auditor that you qualify for HAMP but no actual application with HAMP was done with your loan.

d) You were put into a trial payment program…which you pay on time consistently…and are either foreclosed upon, or denied anyway for good measure, then you have a justifiable cause of action.

The title of your action would be asking for a “Permanent Injunction”.  Consult your attorney.  Basically, a permanent injunction is such that your bank can not foreclose on your home until such times as they offer you a sustainable loan modification.  The basis for this injunction is because they represent to you that they have the authority to modify the loan, and go through the motions of giving you a loan modification application.

 

The principle we want to use here is to prove that the “lender” is not acting in good faith.  We are going to make them eat their words.  In other words, if they represent that they can do a loan modification, but in fact, they can not…then they are guilty of misrepresentation.  Be sure to consult the Fair Debt Collections Practices Act under misrepresentation as another claim in your civil action.

 

The strategy here is, by suing your “lender”, you are now costing them big money…to the tune of $10,000 to $25,000 just to defend your action against them.  When it starts to hurt them…then they will be more likely to come to the table to deal with you more fairly.  Currently, there is ABSOLUTELY NO REASON for them to give you a loan mod.

 

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Thank you for your support.

Vince Khan

Author of “The Foreclosure Defense Guidebook”