Foreclosure Mediation in Florida, Why Are The Banks Still Still Ignoring Their Own Requirements? (Sigh)
The lenders across this country use the powers and protection of the federal government when they choose to, then ignore the rules and regulations when they do not serve their interests. This is especially true in the context of foreclosure mediation. The regulations require the straw parties acting as agents of the federal government (otherwise known as The Banks) to come to mediation with solutions already worked out. But of course they never do. The important thing to keep in mind is that they are ignoring their own requirements.
They gobble up millions of dollars in our taxpayer dollars, abuse Amerikans all across this country, then ignore and violate their own rules and the regulations. It’s chaos. It’s anarchy. It’s cats and dogs living together…..here’s what they are supposed to do:
- attend mediation sessions by phone (or in person, at the servicer’s sole cost and expense);
- continuously be on the phone or in attendance, if in person, throughout the entire mediation session. (If multiple servicer representatives are needed to have the full spectrum of authority to offer and settle retention and liquidation options, then all such representatives must attend the mediation session by phone or in person.);
- have full and complete authority to execute the workout with the borrower;
- present the retention option (if available) first and discuss fully with the borrower. A servicer must not present the conditional DIL or conditional short sales option until it is clear that the borrower is not amenable to a retention option; and
- be fully prepared to explain the offers or why the borrower is not qualified to receive certain offers and must maintain that position and explain why that is the case.
- The Borrower’s Request for Lender Documentation is provided to the borrower by the Mediation PM. Pursuant to the various circuit court orders, the borrower can request the following documentation:
- Documentary evidence that the lender is the owner and holder in due course of the note and mortgage sued upon.
- A history showing the application of all payments by the borrower during the life of the mortgage loan (i.e., a loan payment history for the borrower).
- A statement of the servicer’s position on the current net present value of the mortgage loan. If the servicer can calculate net present value in accordance with HAMP methodology for calculating net present value (regardless of whether a borrower is eligible for HAMP), then the servicer shall provide the net present value from this calculation to the borrower. If the servicer cannot calculate net present value in accordance with HAMP methodology (regardless of whether a borrower is eligible for HAMP), the servicer must explain in writing that the net present value calculation requires the borrower’s financial documents and cannot be calculated until the financials have been received. Upon receipt of the borrower’s financial documents, the servicer shall calculate the net present value and send the calculation to the borrower and attorney.
- The most current appraisal of the property available to the servicer. (Note: If an appraisal was required pursuant to the underwriting performed at origination and no other appraisal was subsequently obtained, the servicer shall provide the origination appraisal. The servicer does not need to obtain a new appraisal. If no appraisal was ever obtained, the servicer must explain in writing to the borrower that an appraisal was never obtained.)
Upon the receipt of a completed package of financial documents for a borrower that has completed counseling (as described above in Step 3.0), the servicer must navigate within the Clarifire application to the document images attached to the case to verify that the documents are both legible and complete, and record the outcome of their review within three business days of receipt. If any documents are missing and/or unclear, the servicer must record the exception and provide detail summarizing the exception. The Clarifire application will route the exception to the Mediation PM who will immediately review it and follow up with the borrower to obtain the exception documents. The servicer must review documents submitted to resolve the exceptions in the same fashion detailed for the initial submission and record the outcome of that review within one business day of receipt. Upon agreeing and recording that the borrower documents are agreed to be complete and legible, the servicer will proceed with offer creation (see Step 5.0.2 below).
5.0.2 Evaluate Borrower for Offers
The servicer must evaluate the borrower for foreclosure alternatives in accordance with the established Fannie Mae workout hierarchy. The servicer shall consider the full array of products allowed by Fannie Mae and if the borrower qualifies for a retention option, shall offer the borrower the most appropriate retention option based on a review of the borrower’s financials and circumstances. The servicer is responsible for the simultaneous preparation of the legal documentation for a retention offer (if the borrower is eligible based on financials) and conditional deed-in-lieu (DIL) and conditional short sale offers to be presented to the borrower in the mediation session. During the mediation session, the servicer shall first offer the retention option and shall only offer the liquidation options if the borrower rejects the retention offer or if a retention offer was not available for the borrower.
Retention Offer: The servicer shall follow its existing delegations and processes with respect to whether Fannie Mae must review and approve the retention offer.
If the servicer is non-delegated, the servicer must enter a proposed retention offer into the HomeSaver Solutions® Network (HSSN) along with the terms and conditions of the offer. The Fannie Mae representative will review and finalize the offer details, which will be available to the servicer via HSSN. If, after Fannie Mae’s review of the non-delegated request, the borrower does not qualify for a retention offer, the Fannie Mae representative will have communicated the justification for this determination in HSSN. This information should be used by the servicer to describe the borrower’s ineligibility for a retention option during the mediation session.