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Report Examines Ongoing Problems With Loan Modifications Even in Wealthy Areas

July 26, 2010

At the beginning of 2009, our Fontana loan modification lawyers wrote about many articles outlining the struggles homeowners face when they seek a loan modification. This type of news coverage has dropped off in recent months -- not because it's no longer true, unfortunately, but because it's no longer surprising. That's why we were pleased to see a June 22 report from radio station KPCC about the ongoing struggles faced by at least some homeowners who are trying to get a permanent loan modification, but face indifference, delays and mistakes by their lenders. In addition to costing thousands of dollars with no guarantee of success, the article noted, the delays are bad for the overall economy and cause serious emotional distress to the people whose finances, homes and lives hang in the balance.

The article focuses on the experience of Jean Wilcox, who lives in an upscale gated neighborhood in Irvine. Wilcox has been trying for more than two years to get a loan modification through the Home Affordable Modification Plan, the federal program for distressed homeowners. She says she's completed three-month trial modifications of her loan three times, but that each time, her bank denies her a permanent loan modification for no reason that was made clear to her. Unfortunately for her mortgage holder, Chase Bank subsidiary EMC, Wilcox is a banking and real estate attorney, which means she understands her rights. She is now looking into suing the bank. An attorney with the Orange County Legal Aid Society added that banks frequently claim they didn't receive her clients' paperwork, sometimes five or six times in a row, despite fax confirmation sheets and other documentation. Chase is among those most frequently cited for such delays, as well as for denying permanent modifications.

As Hesperia loan modification attorneys, we wish we could say that Chase is the only such bank. But in fact, our experience, through our practice as well as the media, has been that many servicers are guilty of this same behavior. Lenders that have little trouble staying organized in other areas of their business are unable to retain even basic organization in their loss prevention departments. We do not believe that the problem is genuine lack of organization, especially since this crisis has been going on for more than a year. Rather, we believe the banks are making cynical financial calculations using, as the article said, the net present value of the home to determine whether they would make more money selling it as a foreclosure or modifying the loan. If they think foreclosure is the more lucrative move, we believe they will do everything they can to avoid granting a loan modification -- even if that means deceiving the homeowner for months or years. This is why less than one half of one percent of the money allocated to HAMP has actually been spent.

Howard Law PC offers borrowers a chance to retake control in the way that Wilcox did. We are Westminster loan modification lawyers who help homeowners secure loan modifications through negotiations or, if necessary, litigation. Even though the housing market may have rebounded a little, many homes are still too far underwater to be profitable for the bank at a foreclosure sale. In these cases, we may be able to point out to the lender that a loan modification is in its own best interests. In other cases, the homeowner may have a case for legal action against the lender, for negligent failure to keep its promises or for violating state and federal laws on predatory lending and other illegal practices. We help homeowners seek justice in those cases, which can include financial damages as well as changes to the loan.

If you're struggling to get a loan modification and you believe your lender is being less than honest, Howard Law can help. To set up a free, confidential evaluation of your case, please contact us through the Internet or call toll-free at 1-800-872-5925.