The trap of Forbearance agreements

7 Mar

Obviously there are a lot of home owners in trouble. You need to warn them of a trap that has been set for them. I’ve given you some information concerning my case, but I would appreciate 5 minutes of “talk time” at your convenience.

The “trap” is the use of a forbearance agreement. I can go into greater detail and show you the proof if you have the time. Here is how it works:

My case sets legal precedent in the mortgage loan industry. With the recent Court decisions the loan servicer’s plan for stealing a home is as follows:

HOW TO STEAL A HOME BY ORANGE COUNTY SUPERIOR COURT JUDGE ANDREW BANKS APPROVED PLAN

1. File a Notice of Default

2. Within the 90 calendar days allotted for the Notice, stall the consumer’s rights for information concerning debt validation. RESPA Section 6 requires a loan servicer’s response within 60 business days (excluding holidays and weekends) of receipt of a Qualified Written Request. Mathematically, (lay out a calendar to prove it to yourself) the 90 calendar days is only 5 days longer than 60 business days and less than that if a holiday falls within the 60 days. For the 60 day response to “beat” the expiration of the Notice of Default the consumer would have to write a letter the very day a Notice of Default is filed (the consumer is seldom aware of the day of filing or that one is even being filed) because the lag in “mail time” will erase the 5 day “cushion”.

3. Toward the end of the 90 day Notice of Default timeframe the loan servicer contacts the consumer and offers a Forbearance Agreement to “postpone” the sale “until the details of the discrepancy of the records can be worked out”. The consumer hesitates to sign an agreement that overstates the amount they owe. The loan servicer refers to the language of the agreement that declares that “Unless all payments are made in accordance with the agreement, the agreement may immediately terminate and revert to the terms of the Original Note.” The loan servicer explains that all the consumer has to do is not make a payment if they “aren’t satisfied” with the results of the verification or for any other reason. They go on to explain that “The forbearance agreement is only a ‘time out’, giving all parties the opportunity to get to the truth and avoid the sale of the property”.

4. Once the forbearance agreement is signed, according to the Court’s decision in my case, the debt is forever verified and the consumer has no further rights under RESPA Section 6 or Section 809 (b) of The Fair Debt Collection Practices Act.

Apparently a few Courts disagree with Judge Banks and agree with me on questioning the validity of such agreements.

In Waters v. Min Ltd., the court framed the question as whether the contract

“was such as no man in his senses and not under delusion would make on the

one hand, and as no honest and fair man would accept on the other.

” 412 Mass. at 66, 587 N.E.2d 231.

The court noted that “[i]n Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945), the Supreme Court addressed the question of waiver under the Fair Labor Standards Act. The Court held that “a statutory right conferred on a private party, but affecting the public interest, may not be waived or released if such waiver or release contravenes the statutory policy”…“The public benefits from enforcement of TILA because it creates a system of disclosure that improves the bargaining posture of all borrowers.” Therefore, such a waiver is unenforceable with regards to the TILA. (I have many more references concerning our situation).

The legislation that must be enacted, with the least cost to the taxpayer or the government and quickest remedy for the consumers, is to allow a certified program of Mortgage Loan Auditors, under the affiliation with or supervision of one or more of the already established organizations like HOPE NOW. The borrower pays an upfront audit fee and presents all necessary documentation, (original note, cancelled checks, etc.) that is required to preform a verifiable loan audit. The auditor’s work is then compared with the information provided to the borrower from the loan servicer. If there is a discrepancy between the two positions and the loan servicer is overstating the amounts owing, the independent auditor’s information is presented to the loan servicer for verification and proof positive to substantiate the difference. If the difference cannot be proven by the loan servicer, according to the terms of the original note and subsequent signed modifications, the loan servicer must immediately adjust the balances and credit any and all related charges and credit the cost of the loan audit that was pre-paid by the consumer. The result of finding of the discrepancy of the loan records is reported to HUD and any other regulatory agency that monitors loan servicers so any patterns of abuse can be compiled.

This process provides the transparency we have all so desperately sought and finally makes the loan servicer accountable for their mistakes. It costs the government nothing, it prevents loan servicing abuse. It finally makes enforcement of the statutes that have been unenforceable for decades possible. It makes finally allows each of us little people live longer in the homes we love so dearly on “Main Street”. Thank you for your time and HOPE you will make this CHANGE!

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