Mortgage Loan Negotiation Attorney?

By | January 10, 2009

An attorney in Sacramento wants to charge me an up front fee of $3250 to negotiate a principle reduction and help me drop a 2nd mortgage with Countrywide. I almost went for it, but then I found this:

Legitimate loan-modification services exist, but they do not charge an upfront fee for negotiating with lenders. Instead they typically charge a percentage of the loan value upon successfully completing a negotiation for better terms with the lender. Homeowners can also seek to modify the terms on a mortgage for free by contacting the lender directly or reaching out to a legitimate housing counselor. The Hope Now Alliance (888-995-HOPE) provides referrals to counselors approved by the U.S. Department of Housing and Urban Development.

I called spoke to someone for free who explained that if Freddie Mac is the holder of my first loan, I can ask Countrywide if they will give me the FHA “hope for homeowners” work out which includes a principle reduction in some cases and a new interest rate with a 40 year loan. CW says this won’t be available until at least the end of February. They aren’t doing principle reductions right now.  When my interest rate adjusts next year, how much would I be paying per month on the first? CW won’t say. It depends on the rates at the time. If it is more than what I’d pay for the 40 year loan, take the 40 year. After that, I can see if Countrywide will let me talk to Chase Bank directly (the holder of my 2nd mortgage) to see if I can negotiate a way to lower the monthly payments on that one. If these options don’t work out, ask Countryside what price they will accept for a short sale. They won’t say. Or ask for a deed in lieu. We can try for that, but it won’t stop the foreclosure proceedings and takes up to 30 days according to CW. Both of these will still hurt your credit, but you will avoid the foreclosure attorney fees, says the Hope Line.

The bottom line message from the Hope Line counselor is that they can do what the attorney can do for free and there is no better deal that the attorney can get you that you can’t get yourself by negotiating with Countrywide or by working with the free Hope Line counselor.

Update:  2/9/2009: My second attempt at a loan modification with Countrywide has failed. I don’t make enough per month (take home) to afford the payments on my home own according to the Countrywide negotiator, even if they modify it to a 40 year loan. I would make enough if Countrywide would qualify me for the Hope For Homeowners workout via Freddie Mac which includes a reduction of the principal to current market value. Here is more information that sounds good, but it is used to sell something:

A Countrywide loan modification featuring a reduction in the principal balance is available to certain borrowers who meet the lenders requirements for this loan modification option.  Although not every homeowner will be offered principal reduction as part of their loan workout, some homeowners will qualify for this very helpful option.  Here is some information to help determine if you might be eligible:

Eleven states were involved in the predatory lending suit in which Countrywide settled claims worth approximately $8.6 billion dollars to homeowners holding risky loans.  Since the original settlement, two additional states have been awarded settlements to help borrowers as well.  For borrowers in these states, a principal reduction is a viable option that homeowners can apply for.  Here are the eleven states as well as the three additional states included in this special Countrywide loan modification program:

Arizona, California, Connecticut, Florida, Illinois, Iowa, Michigan, North Carolina, Ohio, Texas and Washington-as well as Tennessee, Mississippi and Pennsylvania.  If you live in one of these states and your home loan was originated between January 1, 2004 and December 31, 2007 you may be eligible to participate in the Countrywide loan modification program offered as part of the predatory lending lawsuit.  If you do not, you can still apply for help to lower your payment and avoid foreclosure.

Homeowners who are stuck in Pay option Arm loans where the loan balance actually increases with each minimum payment made are good candidates for a principal reduction.  In areas where the home values have declined significantly, many borrowers find themselves underwater-owing much more on their mortgage than their home is worth.  Most borrowers did not understand the risks involved with these loans, and now find themselves with few options except to apply for a loan modification program.  The Federal government is now encouraging all lenders to consider principal reduction for borrowers who meet certain requirements.

Each Countrywide loan modification is reviewed on a case by case basis, but borrowers can increase their chance for approval by knowing the lender’s guidelines for acceptance and how to complete the application properly so it meets the approval criteria.  Homeowners are encourage to apply for a Countrywide loan modification as the lender has set aside billions of dollars to assist borrowers stay in their home.  Help is available for those who know how to get it, so make sure you take the time to research, learn and prepare as you search for ways to stay in your home.

Called Greenpath Debt Solutions today. 877-369-7284, an affiliate of the Housing Alliance, a HUD approved agency.  I called to ask them how to qualify for the FHA “hope for homeowners” work out.  I was told today by Countrywide that the “H4H” workout guidelines will not be available until April. Meanwhile, I’m attempting a third modification after updating my budget info with Countrywide.

2 thoughts on “Mortgage Loan Negotiation Attorney?

  1. Pingback: Legal Advice Blogg

  2. markdoyle4520

    It is incredible to see just how out of touch our main stream media is.

    I have been researching the Mortgage predatory lending market for some time now, gathering a whole bunch of dirt on Angelo Mozilo, David Sambol, Kurland and others at Countrywide Home Loans. I uncovered more than a little dirt on Bank of America and its CEO Kenneth Lewis. But what moved me the most was coming across this Lone Ranger like character named David Merritt.

    This is a guy who got suckered into one of those Countrywide Predatory loans. He and his wife are first time home buyers who wanted to put 5 to 10 % down on their $729,000 home in Silicon Valley California – 2 miles from Yahoo headquarters, 4 from google and 5 from Apple.

    With just 2 days to remove their loan contingency, and with at least two other lenders ready to sell them a relatively decent mortgage, Countrywide talked them out of going with the competition by presenting a 1 to 3 percent, FHA Good Faith Estimate and declared: “if you can find someone to beat this loan, then go with them and we’ll pay the closing costs.”

    Countrywide staff were trained on how to determine how much knowledge a home buyer had, and they knew that the Merritts were suckers to be taken. Once they fired the other lenders and committed themselves to Countrywide, the Merritts found themselves locked into a 100% financing Pay Option ARM and HELOC which was destined to charged them over 2 million dollars. Countrywide had a policy of talking buyers out of putting down payments, and convincing them that they would give them a loan that was better. In fact, they would always tell home buyers that No One Could beat them and the truth was that they did beat everyone at the application stage in order to remove all the competition, but they left out that by the time the home buyer was closing escrow, most competitors would have done better.

    The Merritts signed a loan that was charging twice as much as the average lender. What is more is that they signed a loan which Countrywide assigned Mortgage Electronic Registration System as a lender. As it turns out, MERS was designed to be a front company which allows: 1) Note holders to hide from public scrutiny; 2) the duplication of one loan note that could be sold off to 2 or more investors or mortgage backed security pools: 3) evasion of paying local recorder fees; 4) Overriding state legislatures recording the laws on recording liens, beneficiaries and holders in due course; 5) attacking Public Policy in regards to its goals of protecting consumers and lenders from fraud via recording laws; and last, but not least, 6) being a conduit for billions of dollars to pass right by Uncle Sam and into Cayman or Canadian banks where no federal taxes can touch it.

    This is how Countrywide rose to the top. And they intentionally targeted elderly, minorities and unsophisticated first time buyers.

    Now in July 2008 Bank of America bought Countrywide out for 2 billion dollars. A company with assets that exceeded 20 billion, and servicing machine that churned out billions more.

    Bank of America went to all the states Attorneys Generals and asked them to bring lawsuits on behalf of their state citizens against Countrywide and to already agree to cut a sweet settlement deal with Bank of America. This was a strategy to persuade that Public that BofA was sincere about cleaning up the mess Mozilo and cronies created. But what is left out is that they are also trying to cut off home buyers ability to charge BofA with the predatory loans of Countrywide.

    Behind the scenes, BofA has been supporting Countrywide since 1969. It has always been in the predatory loan business, but through other front companies. For the longest, evidence shows, Kenneth Lewis was very close allies with Mozilo and planned with him to defraud Americans out of their home equity.

    It is so strange to see so many Americans enslaved to the Banking and Finance gangsters and not even know it, or if they do, just accept it.

    David Merritt is literally one of the 21st Century modern epics “David versus Goliath.” And all the has is a little sling and a rock against Goliaths billion dollar war armor. Check out some of his thoughts on many issues at wordpress.com/insightbeyondsight, but the 9th Circuit Court of Appeals has before it Merritt v. Countrywide, BofA, Wells Fargo et al, Docket No 09-17678 where he has charged straight at these Greedsters with RICO and other federal violation. And in Santa Clara Superior Court Merritt v. Mozilo et al No. 109CV159993.

    He is actually looking for other victims who have deeds of trust assigned to MERS and he wishes to help in anyway possible to fight these folks offensively , he prefers, but he has enough information to help defensively as well. Lawyers from around the country taps into this Big David. So circulate the word.

    Mark Doyle

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