Thursday, July 19, 2012

A Good Week for 5 of McGrath & Spielberger’s Mortgage Relief / Foreclosure Clients

A Good Week for 5 of McGrath & Spielberger’s Mortgage Relief / Foreclosure Clients!

One area that our Firm focuses on is mortgage relief / foreclosure prevention. Mortgage relief, of course, can include at least mortgage loan modification, refinance, forbearance, deed-in-lieu of foreclosure, short sale, and deed for lease. The road to a successful outcome can be a very challenging one which is full of frustrations, and patience, persistence, and professionalism are musts for those of us who assist homeowners and borrowers. Of course, you do have good weeks like this one, which result in happy clients and a feeling that your hard work (and that of your clients, as it’s a team effort) has been rewarded.

Here is a quick summary of the factors for each case, and further down is a summary of the positive developments this week. These cases involve Bank of America, First Bank/First Bancorp, and Wells Fargo (not listed in order).

  • Case A: primary residence, pending foreclosure sale, National Mortgage / Department of Justice (DOJ) Settlement, modification obtained, principal balance reduction, monthly payment reduction, foreclosure avoided.

  • Case B: rental property, in foreclosure, successful delay of foreclosure hearing and sale.

  • Case C: vacant lot near the water, diminished value, deed-in-lieu, forgiveness of almost $50,000 in unpaid principal balance.

  • Case D: primary residence, foreclosure initiated, intense dispute between borrower and bank, years behind on mortgage, modification obtained, monthly payment reduced, late fees waived, foreclosure avoided.

  • Case E: vacant lot in failed development, underwater property, deed-in-lieu, forgiveness of half of unpaid principal balance, acceptable credit reporting. 

Case A: We took this case on about 10 days before the foreclosure sale, after an Order of Foreclosure Sale had already been entered (something we rarely - and only very carefully – do). We were able to post-pone the foreclosure sale once, twice, three times, and had to endure some incredibly incompetent behavior on the part of the mortgage servicer’s employees to do so (those behaviors will be exposed in detail in a later blog post). The pursuit of a mortgage loan modification for this primary residence has been ongoing, with a short sale as a back-up plan if absolutely necessary.

Today, we were notified that our client had been approved for a modification which will result in a permanent 1/3 reduction in the monthly mortgage payment, a permanent reduction/forgiveness of $60,000 of the unpaid principal balance, and the loan being considered “current”. Needless to say, our client (whom we like very much as a person) was overjoyed and relieved that the family will not be forced out of its home, as were we. Foreclosure looks to have been avoided!

Case B: This foreclosure case involves a secondary (rental) property with multiple loans. We have worked with the client for numerous months, navigating various obstacles and attempting to place the client in the best position to succeed in obtaining a permanent mortgage loan modification. As is its habit, the mortgage servicer/lender won’t delay the foreclosure proceedings, even as it concurrently “works with us” toward a modification.

Working together with our client, we filed a Motion to Continue Foreclosure Hearing (the second such Motion in this case). The Motion to Continue Foreclosure Hearing was granted at the hearing (over objection), an Order of Foreclosure was not entered, the foreclosure sale will not take place in the immediate future, and more time was gained to negotiate toward a permanent resolution short of foreclosure.

Case C: This matter involves a vacant lot near the water which was originally intended to become a retirement home in years to come. The market dropped out, the lot was never developed, and the market value plummeted to absurdly low levels.  The client retained us to ascertain a reasonable resolution of the matter, an outcome which would allow the client to be rid of the property without having to pay the full balance of the loan back. Of course, deed-in-lieu and short sale are the primary options in this circumstance.

We just received an offer from the lender which would forgive almost $50,000 of the unpaid principal balance and allow the client to repay the remainder over a term of years.  Nice!

Case D: This McGrath & Spielberger client has been in a heated dispute with the mortgage servicer/lender for many months; that bank actually blocked the borrower from accessing the mortgage account online, even for “read only” purposes. The case is a particularly challenging one due to the length of time since the last mortgage payment was made/accepted and the other specific financial figures at issue. The arrearages in this case are in the tens of thousands of dollars, and the bank has begun foreclosure proceedings.

We were able to obtain a mortgage loan modification offer which gets the borrower back to “current” status and reduces the monthly mortgage payment even considering that the borrower is tens of thousands of dollars behind (and of course, those arrearages, unless waived, have to eventually be paid back). We are, on the client’s behalf, following up with the bank to obtain some additional details and clarifications, to make absolutely sure there are no snags in this process. Thankfully, it appears that foreclosure has been avoided!

Case E: In this instance, the property was purchased by multiple borrowers as a vacation home in an up-and-coming area once booming with growth and increasing land values. That growth stagnated in 2009 and the once-promising development began to fail. Faced with a mortgage principal balance much higher than the current or foreseeable future market value, and needing to free up money for other commitments, the clients asked the Firm to step in.

After a detailed analysis and advice from the Firm, a plan was agreed to and an offer was made to the lender in order to dispose of this loan. After review by an internal committee, the lender today made an offer which would cut in half what our clients would have to pay to resolve the matter in a way that would not cause significant damage to the clients’ credit scores. Recommendations have already been made to the clients, and we will proceed further as indicated.

The cases described above are just a sample of the matters we are working on for homeowners,  borrowers, and other clients in the states of Florida, Georgia, North Carolina, Ohio, South Carolina, and Tennessee. We are mindful of and monitor a multitude of mortgage relief options and programs, including HAMP and other Making Homes Affordable (“MHA”) programs, as well as the National Mortgage Settlement (also called the “DOJ Settlement”).

Each case, each client, is unique, and we can never predict what might happen in your matter, or other matters. We do our best for our clients, and please don’t hesitate to contact us if we may be able to help you.