Matt Weidner – Fighting For The American People

Posts Tagged ‘mortgage help’

No other rights are safe where property is not safe.” — Daniel Webster

The Wall Street Fat Cats and criminal conspiracy of bankrolling banksters and corrupt government officials have totally decimated our system of real property ownership in this country.  Clear, stable and conspicuous ownership of private property and all the protections that come with it were one of only three key foundations of our entire country.  (The third element of American Exceptionalism was Freedom of Expression.)  Now that this key component of our national liberty has been destroyed, our entire nation is at real risk.

A primary component of American Exceptionalism was on hard work, ingenuity, building things and reaping the reward for your ingenuity, innovation and labor.  That was the economic component of our success.  The next link in the chain was being able to convert the fruits of that economic risk and the great reward into something safe, tangible and protected from seizure and attack by government and your competitors. Such attacks frequently happened in all other societies prior America. So our founding forefathers: a) installed entrepreneurship as a primary objective, and b) established private property ownership as a means to secure the rewards of that effort.  This profound societal innovation worked and the system was protected until the banksters infected our system with securitization and in so doing destroyed a foundation of American exceptionalism….in order to make this right, we’ve got to go back and reaffirm the basic building blocks.

Let’s begin with a detailed history lesson.  This is long, but read these quotes slowly and carefully.  Think about our founding fathers (and the women who undoubtedly were their inspiration).  Remember those building blocks and those higher values and inspirational goals that we learned about in school.  But now go back and read this history and these quotes from the perspective of your adult worldview.  Contemplate how these factors impacted your adult and especially your social and economic perspective. Frankly our concepts of government were a bit too abstract when we learned them in school, it’s useful to go back and review them to see how innovative and absolutely essential they are to our daily adult life……

John Locke, the great political philosopher lauded by so many of the Founders of this Nation, stated, `the preservation of property [is the reason] for which men enter into society’ and that `no [government] hath a right to take their [property], or any part of it, without their own consent, for this would be in effect to leave them no property at all.’;

William Blackstone, whose lectures shaped and helped inspire the Declaration of Independence, Constitution, and primal laws of America, wrote: `So great moreover is the regard of the law for private property, that it will not authorize the least violation of it; no, not even for the general good of the whole community.’;

Samuel Adams, the political writer, statesman, and signer of the Declaration of Independence, declared that our rights included: `First, a right to life; Secondly, to liberty; Thirdly, to property; together with the right to support and defend them.’;

John Adams, diplomat, signer of the Declaration of Independence, and President of the United States, firmly proclaimed: `The moment the idea is admitted into society, that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.’ and that `Property is surely a right of mankind as real as liberty.’;

John Adams also affirmed: `Property must be secured or liberty cannot exist.’;

James Madison, author of the Constitution, and President of the United States, announced: `Government is instituted to protect property. . . . This being the end of government, that alone is a just government, which impartially secures to every man, whatever is his own.’;

John Dickinson, signer of the Constitution, stated: `Let these truths be indelibly impressed on our minds: (1) that we cannot be happy without being free; (2) that we cannot be free, without being secure in our property; (3) that we cannot be secure in our property, if, without our consent, others may, as by right, take it away.’;

Thomas Jefferson, the mind behind the Declaration of Independence, and President of the United States, wrote: `The true foundation of republican government is the equal right of every citizen in his person and property and in their management.’ and `The first foundations of the social compact would be broken up were we definitely to refuse to its members the protection of their persons and property while in their lawful pursuits.’;

Thomas Jefferson also affirmed: `Charged with the care of the general interest of the nation, and among these with the preservation of their lands from intrusion, I exercised, on their behalf, a right given by nature to all men, individual or associated, that of rescuing their own property wrongfully taken.’;

Noah Webster, the `Father of American Scholarship and Education’, stated: `It is admitted that all men have an equal right to the enjoyment of their life, property and personal security; and it is the duty as it is the object, of government to protect every man in this enjoyment.’;

John Jay opined: `No power on earth has a right to take our property from us without our consent.’; and

Fisher Ames, framer of the Bill of Rights and Massachusetts Representative to the first four Congresses, said: `The chief duty and care of all governments is to protect the rights of property.’:

Stephen Hopkins, from Rhode Island, in 1764 said, “they who have no property can have no freedom.”

Property Ownership in America

Now think about how insidious and yet how complete the destruction of our right to property has now become in this country.  For hundreds of years if anyone wanted to know who had any interest in any property across this country, you needed only walk into the county property recorder and review the records. No need to explain yourself, no need to answer any questions, no need to prove any personal interest in the question, just walk in and examine.  All of this changed with the very recent advent of the MERS system.  Today no one knows who really owns the interests in millions of mortgages all across this country. And in practical terms, mortgages are effectively ownership of real property.  This is especially true in non judicial foreclosure states, but also true given the current climate of very little judicial oversight even in judicial foreclosure states.

So what do you have?  As practitioners and advocates see everyday, and as we’ve been warning about for years, shadowy and untraceable entities are taking title to real property all across this country with precious little attention being paid to whether these parties are entitled to this property and even less consideration paid to the consequences of turning title to real property over and conceding fundamental Constitutional rights in the process of doing so.  This whole sickening madness has profound Fourth and Fourteenth Amendment consequences, but no attention whatsoever is being paid to those important issues.  As a refresher, the Fourth Amendment concerns are the fact that the real party at interest in many foreclosures are components of the federal government while our state law enforcement and judicial agents are implemented as part of the taking.  The Fourteenth Amendment issues are the well-documented violations of fundamental rights that permeate the foreclosure process nationwide.

The Ibanez decision is an important push back against the madness and I’m certain there will be many other decisions and developments for years to come that will start to reassert the basic property rights that have been so violated.  The problem is that undoing the damage that’s been done is unprecedented.  The entire system has got to be broken down before it can be fixed and built back up.  But make no mistake, this must be done.  We cannot just continue kicking this can down the field and hoping that somehow it will work itself out…it’s just not that easy.

Homeowners who find themselves in foreclosure or who are trying to work with their lenders on a modification will often be disappointed in their efforts to solve the problem.  Don’t think you’re alone if you cannot get your loan resolved, the reality is only a few thousand homeowners across the country (out of the millions who are in trouble) have gotten any real, long term assistance as reported in Mortgage News Daily.

The Treasury Department released data Thursday on activity in its Making Home Affordable (HAMP) program during the month of November.  As expected from earlier comments made by Treasury officials, borrowers continued to enter the program under trial modifications, but the rate of permanent modifications remains well below expectations.

Cumulative figures for the program by the end of November show participating servicers had sent a total of 3,137,548 requests for financial information to borrowers thought eligible for the foreclosure prevention program and had extended 1,032,827 invitations to participate in a trial modification program, up from 920,000 in October.

There are currently 728,408 borrowers actively participating in loan modifications, however, only 4.3 percent of those modifications, or 31,382, have been converted to permanent status.

The HAMP program involves 78 servicers who manage approximately 85 percent of eligible mortgage debt in the country.  These servicers are paid an incentive by the Treasury Department for enrolling troubled borrowers in the program and completing loan modifications.  The workouts must lower borrower payments to a maximum of 31 percent of the borrowers’ monthly income.  It is estimated that homeowners who are enrolled in the program have saved an average of $550 per month on their mortgage payments.

GMAC has been the most successful servicer in converting trials to permanent modification status with 7,111 completions.  J.P. Morgan Chase and Ocwen Financial have each converted around 4,300 loans.  Some servicers have completed no conversions and one or two have not enrolled even one borrower in trial programs.

The number of trial modifications in November rose nearly 11 percent over October’s figure of almost 660,000 but 30,650 of the modifications started in the seven months since the program got off the ground are no longer active.  This is roughly the same number as have moved into permanent status.

In a written report to the House Financial Services Committee earlier this week, Assistant Treasury Secretary Herbert Allison warned that performance figures would be disappointing.  He said that, while most borrowers in trial programs are current on their payments, servicers blame the lack of conversions on missing documentation from borrowers while the borrowers and mortgage counselors assisting them are complaining that servicers are mishandling and losing data that is submitted.

There are some importantl things consumers need to do to increase their chances of success in obtaining a modification. Visit www.mattweidnerlaw.com for more information.

In a July 2009 report, the United States Government Accounting Office (GAO) issued an analysis and report detailing problems with the Home Affordable Modification Program, a program operated by the Department of Treasury under the Troubled Asset Relief Program (TARP), the HAMP program represents the US government’s primary response to the residential mortgage crisis.  The program is an abysmal failure and will continue to be so for the foreeable future.

The full text of the report can be found here at http://www.tarptales.org/files/reports/GAO%20-%20d09837.pdf The report is  a real hoot of a read because it details how $50 billion dollars of taxpayer money is being tossed around to the very companies that caused all this mess in the first place with little or no control over the money or how that money will be spent or accounted for.  The 68 page report is a case study in government incompetence and private industry opportunisim.  Rather that bother with all the details, just read the conclusion found at the end of the report which sums up the problems with the program:

Our analysis found weaknesses with the design and monitoring plans for the counseling feature of the first-lien modification program and the rationale for the HPDP program and with Treasury’s estimate of the number of borrowers that might be helped under the first-lien modification program. Furthermore, we identified weaknesses with HAMP’s management infrastructure and found that the development of some processes and internal controls was behind schedule.

Finally, we are concerned that Treasury is not fully vetting servicers with which they contract to make modifications. One of Treasury’s stated goals is to complete initial modifications quickly. But, unlike other TARP programs, such as the Capital Purchase Program, HAMP expenditures—which are projected to be up to $50 billion—are not investments that will be partially or fully repaid but expenditures that, once made, will not be recouped.

In plain language, the report admits US taxpayers are pumping billions of dollars to the mortgage lenders that caused the problems with residential real estate with no way to manage or account for that money.

Who benefits from the 50 billion in taxpayer dollars?

As of July 14, 2009, 27 servicers had executed HAMP servicer participation agreements with Fannie Mae, the HAMP
administrator. Almost $19 billion of the TARP funds had been obligated to these servicers as of July 14, 2009 (The list is a who’s who of the lenders that caused this mess in  the first place.)

Do normal citizens benefit from the program?

According to Treasury, participating servicers report that as of July 20, 2009 they had extended over 354,115 trial modification offers to borrowers and 180,305 trial modifications had begun. (So of the millons of homeowners in trouble, less than 200,000 have actually recieved benefits from the $50 billion taxpayers are pumping into the program.)

How many homeowners are in trouble that could/should be helped?

Using a variety of data sources constituting roughly 50.3  million loans nationwide, program officials project over
10 million borrowers (meet the qualifying terms in the HAMP guidelines and) are likely at risk of default/foreclosure. (S0 10 million are in trouble and 200,000 have been offered any assistance.)

Using limited data on these borrowers’  current debt-to-income ratios, Treasury projects about 80 percent
(8.4 million) of these borrowers have debt-to-income ratios greater than 31 percent, and thus are likely to have
unaffordable loans. (That’s 8.4 million homes that can’t be saved under this, the only government program.)

Using information from their simplified net present value (NPV) test model to determine borrowers whose loans
would benefit from modification, Treasury projects about 70 percent (3.9 million) of these borrowers would likely pass the test and be offered the 90-day loan modification trial.  (Don’t quite get the GAO math, but sounds like 3.9 million might benefit from some program…problem is, by their own numbers they have not been offered assistance.)

(Keep in mind that both the estimates provided above do not take into account the dramatic increase in unemployment which likely were not factored into those estimates.)

The US Government is going to toss out billions of dollars to servicers, but we know they’re in absolute chaos and turmoil and unable to handle their existing work, much less the work invovlved in restructuring loans.

Servicers are required to fulfill extensive program requirements, which for some servicers will necessitate increasing staffing and updating data collection systems.  However, Treasury and its financial agents are not consistently assessing the ability of prospective HAMP servicers to meet distinct HAMP requirements and guidelines during the program admittance process. In November 2008, the federal banking regulators stated that banking organizations needed to ensure that their servicers were sufficiently funded and staffed to work with borrowers to avoid
preventable foreclosures while implementing effective risk mitigation measures. However, in its March 2009 report, COP noted that servicers were generally understaffed, lacked the capacity to handle the pre-HAMP demand for loan workout requests, and had no apparent ability to handle a greater volume of loan modifications, such as that expected to be generated under HAMP.

Virtually every one of my customers who has attempted to obtain a modification has reported they cannot get any information out of their lender or servicer.  They mail or fax info many times, but this information is lost and must be resent.  Even when it is recieved, the lender or servicer cannot make a decision.  The GAO report confirms that the reason for this is gross incompetence and complete inability of the lenders to handle the task of modification…..billions of your money gone to waste.