Homeowner Revolution 2010

Tens of thousands of homeowners facing foreclosure are trying diligently to get a loan modification from their bank in an effort to keep their home. These homeowners are spending time and money faxing documents, mailing loan modification packages and spending hours on the phone only to be told that their application for a Loan Modification has been denied. Many of these homeowners have spent thousands of dollars hiring Loan Modification companies who are unsuccessful in their attempt to get a Loan Modification as well.

Remember the wonderful HAMP program that was created by the Government to help homeowners and preserve home ownership? Well the Banks are using this very program to force homeowners into foreclosure so they can capitalize on the Shared Loss Agreement that they have in place with the FDIC.

One of those banks is OneWest Bank FSB, under its ownership of IndyMac Mortgage Services, who has made the decision to use HAMP as a reason to not modify mortgages, stating that by following the guidelines of this program it prohibits them from doing it. This, according to them, is based on a servicing agreement between OneWest and the actually owner of the loan. The provision of “safe harbor” would have allowed modifications without the fear of lawsuits. However, Congress removed it. Lenders found their loophole and a way to cash in big on the sweet Shared Loss Agreement that they have in place with the FDIC. When OneWest took over Indymac, the FDIC and OneWest executed a “Shared-Loss Agreement” covering the sale. This Agreement would reimburse OneWest for any losses they suffered in foreclosing on a property. In the event of foreclosure, the FDIC would cover from 80%-95% of losses, using the original loan amount, and not the current balance. You can read more on the Shared Loss Agreement “Anatomy of a Government-Abetted Fraud: Why Indymac/ One west always forecloses”

IndyMac Mortgage Services, a division of One West Bank, cannot modify loans due to the rules and regulations established by HAMP, under the direction of the United States Treasury Department. HAMP, according to One West requires the servicer to comply with the terms of their servicing contract with the owner of the loan. So in laymen’s terms our Government created the HAMP program which requires the servicer (in this case One West Bank) to comply with the terms of their servicing contract with the Investor who owns your mortgage.

This contract is called “The Pooling and Servicing Agreement” (PSA). This is the agreement that dictates terms regarding how mortgages are pooled, securitized, sold to investors, and then serviced by other companies. And one of the terms many of these agreements contain makes it almost impossible for certain homeowners to be offered a modification. Some pooling and servicing agreements state that no more than 5% or 10% of the mortgages contained in the pool can be offered loan modifications in the case of default. This means that a homeowner applying for a loan modification after the 5% to 10% modification threshold has been met will automatically be turned down for a loan modification. So the US Treasury Department, in reporting that 9% of homeowners who qualify for plans have been given modifications, is simply reporting information that could have been estimated just by examining the structure of the mortgage industry. These PSAs set a limit to how many mortgage modifications can be offered by servicers, and these companies may face liability from the trusts or investors that own the underlying loans if they offer too many workout plans to borrowers. They may find themselves in breach of the servicing terms they agreed to, even if it would allow more homeowners to avoid foreclosure, and they are not willing to take this risk. Why would they want to take the risk when our Government, Our Tax Dollars are bailing them out and providing a Shared Loss Agreement from the FDIC that covers their losses? Indymac/ One West homeowners who have applied for a loan modification are getting denial letters that state they have been denied a loan modification because of One West’s contractual agreement with the Investor on their loan. This contractual agreement is the Pooling and Servicing Agreement (PSA).

Many borrowers would expect to not qualify for a loan modification based on income, employment or lack of equity in their home. Well think again….. Think Pooling and Servicing Agreement (PSA) and Shared Loss Agreement! Both were offered to the banks by our Government and both are forcing American Home Owners, American Tax Payers into unnecessary foreclosures.

At least let borrowers know from the beginning that they are not getting a loan modification. The knowledge from the very beginning of having no chance of qualifying would be much easier than the anxious months of phone calls and letters that in the end would lead down the same path of foreclosure.

IndyMac, bailed out this year by US taxpayers, who has now found a way to use a program set up by the United States Treasury Department, voted on by Congress and endorsed by our President against US homeowners. Then to top it all of the FDIC is covering their buts like a safety net with taxpayer money to once again bail them out through a Shared Loss Agreement.

Who is going to stop this madness? The Government has turned their backs, Attorneys simple “DON’T GET IT” and the media is not listening. According to Realtytrac.com there are currently 2,093,204 Foreclosure Homes on the market and 1 in every 418 housing units received a foreclosure filing in February 2010. These numbers do not include the millions of homeowners who have already lost their home to foreclosure or the thousands of homeowners who have recently lost their jobs and are headed to foreclosure.