Re "Lenders get off too easy in deal," Column, Jan. 8
Having dealt with the problems David Lazarus describes as an attorney representing borrowers, I agree wholeheartedly with him. There is no amount of money that can reimburse people who are getting constant trustee's sale notices with respect to their homes.
I am currently assisting a client who is battling Bank of America. It has finally offered a trial modification, but it still insists on scheduling a trustee's sale (and postponing it) every month. This is a prime example of "dual tracking," which was forbidden by the last agreements with the banks.
Payment of fines to the various government entities should include direct payments from those who got bonuses as a result of making these bad loans.
Lazarus begins his column: "A mortgage is a contract. You agree to pay a certain amount of money to the bank each month and the bank, in turn, agrees to finance your purchase."
The borrower breaks this contract when he fails to make payments. Banks don't foreclose on anyone who is current on his payments. In many cases the banks renegotiated loan terms for the borrower, but they had no obligation to do so.
As the Wall Street Journal noted in its Jan. 8 editorial "The Foreclosure Shakedowns": "The staff of the Office of the Comptroller of the Currency (OCC) told reporters … a mere 6.5% suffered financial harm at the hands of banks. Yet 100% will receive compensation, though many of them never lost their houses."
I own a condo that is worth $46,000, according to the Riverside County assessor. That is down $12,000 from last year. I owe about $114,000 on it and make payments to Chase.
One of the options in the deal with the banks is to have a write-down of the mortgage in a situation like this. I contacted Chase, whose representative said the bank services the loan but doesn't own it. I contacted the Federal Housing Administration and was told the FHA doesn't own the loan either.
So I contacted Keep Your Home California and was told that even if Chase did own the loan, it isn't participating in the mortgage write-down aspect of the deal.
When did the banks get to choose what part of the agreement they'll participate in? And if nobody owns my loan, can I stop making payments?
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