When all else fails, email your local lawmakers, and carbon-copy your bank.

InvestorDirector.com

As InvestorDirector.com has reported in recent months, many homeowners continue to be fraudulently disqualified from receiving a loan modification they qualify for under federal guidelines. What most homeowners do not know is that lenders and mortgage servicers make more money by foreclosing on a struggling homeowner than if they complete a loan modification for them. Mortgage lenders, during the housing boom in 2001-2006, began utilizing an existing derivative investment mechanism known as a credit default swap (CDS) to hedge their losses against defaulting homeowners. In other words, banks made loans they knew homeowners could not afford to pay back and bet against those homeowners, using a credit default swap to do so. A CDS pays out like an insurance policy. When a homeowner defaults, the bank gets paid – bigtime. So goes the question: why would a bank modify a loan destined to fail when they can cash in a CDS for the full loan amount or more? It needs to be noted that many banks and other various corporations took out multiple credit default swaps against the same loan! It has been reported that up to 30 CDS’s can exist on one homeowner’s loan. This explains why homeowners are struggling so badly to have their lenders modify their home loans; despite qualifying under federal loan modification guidelines.

In an article entitled Loan Modification Tips You Need Today!, InvestorDirector.com suggested several strategies for homeowners who are engaged in the loan modification process. To review, they are as follows:

• Document all correspondence with your lender in writing. Keep a log of all communication and record phone conversations if at all possible. Banks lie to homeowners to escape the loan mod –period!
• Hire an attorney to guide and oversee the process.
• Apply for HAMP as soon as your mortgage becomes unaffordable.
• Send all correspondence certified mail, return receipt. Mortgage lenders rely on the excuse “we never received anything from you, therefore we are shutting the door in your face and disqualifying you from obtaining a loan modification”. When a homeowner can show proof that the lender indeed received the documents they say they never got, the homeowner has a good case.
• Complete a REST Report. This 11 page document is the secret document that mortgage lenders use to see if a homeowner qualifies for a HAMP loan modification. If you qualify for a HAMP loan modification using a REST Report and the bank disqualifies you for a loan modification, then you know they committed some sort of fraud to disqualify you.

The latest tip that we would like to report to our readers landed in our lap from a very reputable source who happens to be an executive from one of the largest real estate firms in the US. According to this individual, every homeowner she knows has received a loan modification. In other words, 100% of the people she knows who have needed a loan modification have obtained one. This surely beats the national average. According to our research, less than 10% of all loan mod applicants receive a concrete loan modification. What are her associates doing that the rest of the population is not? They’re emailing their local lawmakers as soon as their mortgage lenders make an attempt to disqualify them from their loan modification.

When the government designed HAMP and other loan mod programs, they left loopholes in them which allow banks to fraudulently disqualify homeowners who meet all qualification guidelines. In fact, there has been evidence showing that bank representatives from Bank of America are actually trained to drag the loan mod process out and lie to homeowners in an attempt to disqualify them from the process. This evidence can actually be heard at www.piggybankblog.com. We must assume that if BOA is doing this, then so is every other lender. Many homeowners have reported to our staff that reasons as frivolous as “we never got what we asked you to send us” have been used by banks to kick homeowners out of a loan mod program. Homeowners are also complaining that they can never get the same person on the phone more than once and it seems that the banks never build a file of client-supplied documents which can help them receive the loan mod they are striving for.

When a bank sees that a distressed homeowner is being proactive and informing a congressperson, senator or state representative of their lender’s blatant loan modification fraud, then those lenders are much more likely to adhere to government loan modification guidelines. The moral of the story for homeowners is that they need to police the government in order to police the banks. Write your lawmakers and hold the banks accountable.

Similar Posts:

• What if I get denied for a loan modification?
• What NOT to do when applying for a Loan Modification
• First-Time Home Buyers Can Refinance Home Loans – 5 Ideas
• Seek An Idaho Refinance NOW !!!! Before Rates Go Back Up !!!
• Bank Equity Home Loan For a Mortgage – 3 Options to Consider