Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Chester
First a little background info.  I am familiar with the forum, mortgage modifications and the whole mortgage fraud mess.  I am in Florida and am in default on a mortgage with Indymac/Onewest.  I have been sending modification documents for over a year, playing their game.  Some documents have been sent over 100 times and they still won't acknowledge them.  I have had to start over several times because I received the "you did not provide us with the documents requested" letter. 

I have never gotten to the point where they have accepted all my documents and were evaluating me for a modification.  Out of the blue I received a trial modification offer.  It is based on valid income information I have submitted many times but they have never accepted.  They want me to make the three trial payments and submit the required documents.  I think I would be wasting my money on this offer and have a foreclosure attorney selected and am waiting for the foreclosure filing.  The mortgage is a mers loan assigned to a MBS over four years after it was closed.  The assignment was signed by a robosigner.  The mortgage does not appear to be in the assigned security through my research.

I am inclined to write them a thank you letter but turn down the offer because they have never accepted my documents to even evaluate me for a modification.  I think this is an attempt to take my money before they foreclose or possibly before the bank settlement and new rules go into effect.

Any thoughts on how to handle this offer? 

   
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Bill
Chester,
   I personally understand your frustration with sending the documents over and over to the servicer trying to save your home.  I've been sending my to the Plaintiff's counsel for over a year and the Servicer still say they didn't get them after the Plaintiff's counsel confirms they have the documents.  Sometimes you need to have a sense of humor.

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I think I would be wasting my money on this offer and have a foreclosure attorney selected and am waiting for the foreclosure filing


I personally feel if you have the money for a foreclosure attorney, you have already selected one, this would be a question for the attorney.  A lot of the time an attorney will offer a free consultation.  I think any action you take (or do not take) COULD have some kind of impact on the foreclosure litigation.  There could be some advantage to retaining the attorney PRIOR to receiving the foreclosure complaint and getting him involved in any modification or have him send a QWR to the Servicer PRIOR to a foreclosure complaint/lis pending.
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Chester

One other thing I forgot to mention.  I sent them a QWR 8 weeks ago.  Not sure if this prompted the offer.  I have to assume they realize I am aware of the fraud and won't go away quietly.  I do not have a lot of money and can't afford to send in trial payments if there intentions are not honorable, which I doubt they are. 

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William A. Roper, Jr.
Chester:

In my view, the very first thing you need to ask yourself is whether this particular property is worth hanging onto in respect of its value and the mortgage balance.

IF you have net positive equity in the property and good cash flow, then trying to find a workout may make economic sense.

By contrast, if the mortgage balance significantly EXCEEDS the value of the property and you have a serious net negative equity situation and/or you have serious income or cash flow issues, you need to be thinking about various exit strategies.

Which exit strategy to choose depends largely on your other financial circumstances and credit situation.

In sort of a limiting situation, suppose that there are two borrowers each of whom is upside down in their mortgage/equity.  For example, suppose that each borrower owes $250,000 on a property that is actually worth $150,000.

Suppose that one of these borrowers has other substantial liquid resources and otherwise exemplary credit.  The other borrower has an additional $50,000 in unsecured debt and really poor credit.

The borrower with liquid resources and exemplary credit has a couple of problems in strategically defaulting.  First, if the purported mortgage investor obtains a judgment for the full mortgage amount and then sells the property at a distress price, the purported mortgage investor may be able to obtain a deficiency judgment which can actually be ENFORCED.  The borrower with other liquid resources or assets may NOT be able to discharge the deficiency judgment in a bankruptcy.  And a default would probably damage the otherwise exemplary credit.

By contrast, the borrower with negative equity, other unsecured debts and poor credit may have nothing to lose in filing bankruptcy and may need to do this anyway.

The former borrower may want to explore a modification or disposal of the property through a deed in lieu.  The latter may want to hunker down, tough it out and FIGHT.  The latter has very little to lose.  Choices may be to walk away from teh property sooner or later, but with the additional wildcard possibilty that the servicer and foreclosure mill law firm make such grave mistakes that he ends up with a free house.

The prospect of a free house is probably pretty SLIM.  But the prospects of remaining in the property for an extended period during protracted foreclosure litigation are actually pretty good for a borrower who is reasonably bright, studies hard and puts up a vigorous defense!

I would start with the economics of the situation and the business decision as to which direction to go.

I would NOT view a modification as a generally viable strategy for KEEPING the house UNLESS there is a compelling reason to KEEP IT.  These reasons would seem to me to be (a) positive equity in the property, (b) substantial assets or liquidity that might be reached by a creditor pursuing a deficiency judgment, (c) exemplary credit which is valuable to preserve.

I would NOT hang onto the property on the speculative possibility that real estate prices are going to rebound any time in the next five years.  Prices are moving MUCH LOWER!

*

Typically, any modification proposal is going to get you to ADMIT to the amount of the debt, WAIVE all rights to pursue origination fraud, WAIVE all rights to pursue servicing fraud and otherwise to indemnify and hold the servicer harmless for ALL of their crimes and frauds.

If (a) the limitations period passed on claiming origination fraud and/or there are proof problems anyway, (b) the fraud in the servicing of the loan has been singularly minimal, (c) the criminal activity associated with preparation for foreclosure, inclusive of assignment forgery and perjured affidavits, you might be giving up relatively LITTLE in signing away your rights in such modification.

It is essential to bear in mind that you have been presented with a modification proposal NOT because it is in YOUR INTERESTS.  Rather, the proposal is made because it is in THEIR INTERESTS.

You need to assess YOUR INTERESTS and then ascertain whether there exists some zone of compromise which is mutually beneficial or rather whether the proposal serves the mortgage investor's interests while actually impairing your interests. 
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