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The Mortgage Modification Lie

By R. Grace Rodriguez, Esq.

I wrote to all of the U.S. Senators the following letter:

"I'm a 10 year real estate and bankruptcy attorney. I am in the trenches daily with the banks and loan servicers. I have experience and information about the bad faith loan modification tactics of most of the banks. My short and long story listed below so I don't take up too much of your time. At least I will have educated you so you can look for evidence of this in your own state. Somebody needs to know and understand what may really be going on and how your constituents are being harmed.

SHORT STORY: Banks need and want the foreclosures. I have directly evidence and can give you trustee sale nos where this has happened. Recent enmasse foreclosures where the notes are NOT reverting back to the bank/lender beneficiaries for the "Face Value" of the Note. Instead, competitor banks purchasing the note at 30-40% of face value of notes AND are about 50% under fair market of the home being foreclosed upon. They resale at current market value with nice tidy profit. Banks books start looking good to Asian and European investors one more time.

The problem is these are the same banks who claim they are trying to work with their borrowers to help them with loan modifications. But this is a lie because these same lenders refuse to communicate with the borrowers representatives. We can fax over to them 5 times financials and every fax is lost! When they do offer a modification it is one where the homeowner has to sign what amounts to a release of any and all FUTURE claim they have against the bank on the loan, including their rights to a future bankruptcy if necessary.

Allowing a CramDown would have stopped the banks from foreclosing and interferred with this profit making plan that it appears the banks are now engaging upon.

An even bigger problem is outright violation of California law in order to accomplish the above-identified scheme. Look at California Civil Code, Section 2923.6 states that the loan servicers are supposed to maximize profit and balance the interests to everyone (including the borrowers) in a security pool. The Investor's interests are far better served by offering loan modification on a loan where the security is a bit upside down now. Otherwise when house goes to foreclosure the investor takes a huge loss.

Conclusion: To discourage modification, bar a cramdown, the government is now the Banks' best friend ensuring a steady stream of foreclosures upon which banks can now maximize its personal profits. All of this at the expense of average American Homeowners and illegal! This is not fair. Its not right! How do we put a stop to this?!?

I have several cases (PROOF) that the bank denied loan modification to borrowers forcing them into foreclosure where it was subsequently purchased by a competitor bank. This is all pretty recent. I don't think most of the pundits or the politicos realize this is happening.

It will be too late before Obama or anyone can help us. I have this insane idea that if I get enough people to listen to me to see what is happening, maybe the cramdown might have a chance if brought to congress again? Maybe something else could be done to help the average person?

What do you think of my thoughts and ideas?

Thanks for reading.

R. Grace Rodriguez, Esq.
(323) 304-5496
http://www.lorgr.com

LONG STORY: Wrote this in my Blog Thursday: It explains it more precisely my theory of what is happening. http://letbksaveyou.blogspot.com/

I wonder if any of them will respond. You are all fee to copy and paste this letter if you think this is happening to you. I would love to hear from you if this is happened to you!

Full post as published by The Law of Second Chances on May 09, 2009 (boomark / email).