I had a draining phone call today, the kind of phone call that makes me want to take the phone off the hook for the rest of the day. I had an inquiry about suing Bank of America because they denied this gentleman’s modification.
To make a long story short, a mortgage modification is granted when a bank gives someone a lower interest rate or a smaller payment in the hope they can at least pay that and avoid foreclosure. The reasons the banks do this ar
e threefold:
- They do not want to add another foreclosed property to their books. Think about it for a minute, if you are Bank of America and you already own 1.5 million vacant properties (they claim it is less than that but I’d bet my retirement plan that they are full of crap) and you were paying maintenance and taxes on those properties (that works out to around $5 billion a year), would you be hot to trot to foreclose on another property in a section of Reading that isn’t safe to walk around during the day? Probably not.
- They do not want to spend their money foreclosing on properties. It costs thousands of dollars to foreclose on a property, even if the borrower doesn’t put up a fight, and if the borrower hires a pit-bull like me (albeit a nice pit bull) it could cost them tens of thousands of dollars because while they may be entitled to foreclose, I’m going to make them prove it. If they can start getting some money from a borrower toward a mortgage rather than a legal bill from Phelan, Halinan and Schmieg (real good people, I like working with them a lot), its a win for them. My dad used to say some of something is better than all of nothing, and if the banks were free of shareholder demands, I imagine more modifications would be granted.
- There is something wrong with the original mortgage. The dirty little secret that isn’t such a secret anymore is that a lot of the mortgages the banks are now trying to foreclose on were made improperly. Some of them contain Truth in Lending Violations that can mean a debtor has actually paid more than they should have (hard as hell to prove but unpleasant to defend). Some of them were improperly executed. Some of them were assigned with robo-signed documents which makes the assignment invalid. If the bank is aware there is a problem with a mortgage, that may lean in your favor on getting a mortgage modifica
tion.
If after reviewing all three of those reasons the bank still denies your modification, you do not have a right to sue for the denial. The denial of a modification, in and of itself, does not create a cause of action (something you can sue someone for) against your mortgage lender.
There are other options available to you, but if you are reading this time may be short and if that is the case, don’t walk, but run to the phone and dial 610-928-1233 and set up a consultation.
I cannot stress to you, dear reader, how important time is in a foreclosure defense action. In Pennsylvania, the foreclosure action is filed and then if there is no response within 20 days, the lender can move for a default judgment. Once a default judgment is granted you have 10 days to file a motion to strike the default. After that deadline, it is very hard to strike a judgment. Although it takes 270 days minimum to foreclose in Pennsylvania, once the process starts it moves quickly.
You have options, and you do not need to do this alone. If you are facing foreclosure or have fallen behind on your mortgage and don’t know how to catch up, call 610-928-1233 and set an appointment.
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