Dated April 15, 2009
In today's unstable economic environment the Federal Reserve Board, Office of the Comptroller of the Currency, and other Federal government agencies, as well as most States, including New Jersey, through then appropriate and authorized government agencies, are witnessed to be positioning themselves to even more closely scrutinize lending practices, and, although presently Loan Modifications are still voluntary to Lenders, there is pressure being brought to bear as well as incentives being placed on these Lenders to cooperate in supplying much needed assistance in helping homeowners to cope with the current financial crisis. Government authorities are urging the Lending industry to help and are offering significant incentives therefor, and it is well within the authority and acumen of appropriate legal counsel to assist in educating borrowers about and processing applications for available loan modification and applying pressures, if found helpful and in many cases such may be necessary, to get Lender cooperation. Such cooperation is necessary to help the consumer restructure or otherwise revamp its mortgage debt existence to avoid the consequences of default and it is just the right thing to do. That is not to say that all borrowers need assistance and is not meant to detract from borrowers priority responsibility to maintain good standing of their mortgage loan payment commitments, but is a reflection on the tough present economic environment where borrowers are susceptible to adverse economic conditions seemingly beyond their control, and having the Federal Government act as a watchdog against unfair advantage being taken by the financial community of such adversity being played out against the consumer by the credit industry. A summary of current and prevalent Federal Loan Modification and refinance programs is included herewith. Our firm is available at a reasonable fee schedule to review consumer mortgage loans to determine possible qualification for Federal and State loan modification programs and applicability of relevant regulation thereto and if there appears availability then to use compliance review and its applicability to combat and persuade for Lender cooperation in mortgage loan modification, if the Lender needs prodding. Hopefully they will cooperate just based on good will and government incentives. In either case we can lend a helping hand and an objective viewpoint and add an expediting factor.
It has been found to be a tough and formidable task determining what the line is and where it may be crossed between valid and predatory lending and determination as to which exists as to a particular existing loan and affect on continued affordability and cause for possible applicable government review. Possible restructuring to allow for affordability has suddenly come to the forefront in these recessionary times. Determining whether higher rates and fees and more onerous loan terms have become predatory and how they might now be avoided has been a fundamental cause in adopting appropriate regulation to respond to the current economic downturn and in particular the resultant housing crisis. Examples of what is being categorized and challenged as potential predatory lending protected against as common aspects of predatory lending statutes include:
Asset based lending
Prepayment penalties
Balloon payments
Negative amortization
Mandatory arbitration clauses
No call acceleration provisions
Financing of points and fees
Loan flipping
Our Firm's goal in offering relevant assistance is not prosecution of lenders or processing of consumer complaints against alleged predatory lending, but rather to, if found necessary or otherwise advantageous, utilize the possibility of and the existence of proscriptive practices having been utilized by a Lender in appropriate cases, and access to prohibitive regulation to curtail those practices and for use in avoiding them, request for review of such practices and associated documentation as a wedge if advantageous and necessary to further encouragement of Lender cooperation in Mortgage Loan Modification in lieu of potential for default and possible foreclosure.
In those cases where a modification may not be the available and/or the chosen remedy for mortgage loan default, then more consequential property transfer options could be explored to avoid foreclosure and associated damage to credit standing. Our firm can also assist in short sales, deeds in lieu of foreclosure, and other transfer alternatives and/or shared expense measures, including leasing buybacks and entity formation and participation alternatives.
Counsel should be contacted as early as possible in any foreclosure situation as there are many and various defenses to foreclosure that may apply and should be utilized but failure to plead them will effectively waive them, regardless of their ultimate effect.
This is a tough present economic environment and dealing with it may require creativity and legal assistance which our law firm is capable of providing.
Our rendition and summarization of predatory lending proscriptions stated herein is not and is not meant to be exhaustive in its coverage but rather is presented only as a manner of alerting the consumer to the existence of such and available prohibitive regulation to curtail such practices and for use in avoiding it and as a tool to use in our offer at assistance in reviewing application thereof to a consumer to use to assist in achieving loan modification as may be advantageous.
The recent Federal stimulus package includes extensive opportunity for lender participation in loan modification, as well as offering direct federal FHA agency participation lending for consideration in loan refinancing as an alternative to loan modification. Provisions for assistance through use of existing Lender Federal incentives for loan modification are being made available as mortgage modification alternatives for prime loans not in default but where the mortgage principal exceeds the home value (being referred to as "underwater homeowners), which is much the norm, in addition to focus of relief on the sub-prime loans not current in obligated payments to be made and in much more probability of foreclosure. This approach also to help conforming Borrowers who have made and continue to make genuine effort to stay current on their mortgage debt service, is refreshing. The regulatory relief focus is on restructuring qualifying loans to lower monthly debt service payments and the design is to accomplish such through a strategy of, in line of priority (i) lowering interest rate to as low as currently 2+% on at least a temporary basis (ii) extending the loan term and (iv) if still necessary, lowering principal. There is also refinancing relief available for many of this higher class of Borrower within the Federal stimulus package, and in any case communication with the Lender and discussion regarding loan modification is certainly not prohibited for those of us who are not behind in our mortgage payments but yet we are struggling too. An example is the Federal HOPE for Homeowners program basically involving Federal assisted FHA refinancing at reduced principal but involving Federal partnership in the resulting equity in the home. Such program has its pitfalls but with the right fit has distinct advantages. In general, however, within prescribed policy limits, loan modification and refinance is available for us good citizen borrowers. For the record, this author does not look favorably upon discriminating against this category of compliant homeowner, especially where the thought behind lack of availability of relief to they as are offered to sub-prime market participating loans is that we have sufficient incentives in keeping our homes and the ability to pay so as not to need assistance though tough so why incur the extreme expense which would be involved in helping us. We were happy to discover that the program did not proceed too far in that direction. Helping us proud mortgage compliant citizens may not be the emphasis but still the opportunity has been made available as part of our Federal Government's relief package and it is us proud Americans as much as anyone else who will help this Great Country recovers.
The advantage of seeking our assistance and the focus thereof is designed first to assist in evaluating the homeowner's qualifications for possible mortgage modification and/or other financing relief and helping to determine what credit may be available, if deemed to qualify for relief, although there is no guaranty that relief can be located; and second to help process such relief to closing thereon, and our fee schedule is designed accordingly. We do not look to prosecute offending Lenders but rather to use their alleged predatory practices, if and as same may be found to potentially exist, to influence, if necessary, such Lender to better assist the homeowner to find mortgage financing relief, whether such be through mortgage modification, refinancing, short sale, or other available resources. Questioning lenders on their negative lending practice may not be necessary, however, since we are witnessing many lenders being very cooperative in considering modification requests. Presently mortgage modification requests are numerous and growing and the Lender resources to assist are limited. Request to Lenders for assistance they are now given incentives to provide are voluminous and it is not and will not be unusual to experience drawbacks in Lender contact time and attention because of it being spread to hundreds of requests attempted by modification candidates for lending representatives and their relevant services. Presently we are told an average Lender could see its individual representative/servicer attempting to handle several hundred applicants at any given time. Good luck therefore getting them on the phone. The homeowner can use a helping hand, to stay on the case of the Lender and try to maintain good contact and helpful assistance. We can be there to help in that regard and to help in the processing of what relief we can help engender.
Do not be fooled by official looking notices and other gimmicks to get your attention and direct you to unofficial servicing sources seeking to charge you for these services that government agencies are advising you may not be necessary.
Legal representation is not however and should not be a factor being proscribed. We cannot guaranty successful evaluation and application but we feel our services will act as an advantage to the homeowner seeking mortgage financing relief, if only in informational guidance and objective assistance. We feel that legal guidance, application and assistance may open doors otherwise much more difficult to access.
In today's economic environment credit is tight, financing is very limited, and therefore legal assistance giving another hand to help guide a homeowner in its search for financial assistance can only help the situation and we are confident that we can provide such assistance in most eligible cases. Such assistance does not necessarily need to be accessed only to avoid default. Descriptions of further aspects of our firm's real estate practice helpful in general should be reviewed as summarized on our website for further insight.
Federal Guidelines on implementation incentive program were published March 4, 2009; the refinance option to have a present end date of June 2010; the modification option date being presently through December 2012. Modification sequence is reducing interest rate, extending term, and then if necessary forbearing principal. Qualification is fairly broad based. There are also deadlines on other Business Related Federal assistance programs, and New Jersey State is participating in establishing many of their own assistance programs. Our firm can help you locate and process through many of these advantageous programs.
There is Federal assistance available for the Small Business as well. SBA prerequisites have been eased and fees limited to accommodate application for the assistance available. The present leniency is set only temporary so it is advantageous to presently consider request for participation. A relevant Federal based website giving more detailed information is http://www.financialstability.gov/.
Contact our firm to speak with Randall J. Perry about your mortgage modification issues.
The Law Office of Randall J. Perry
44 Union Avenue
Rutherford, NJ 07070
Ph: (201) 939-7200
Fax: (201) 393-7348
E-mail: randall@randalljperry.com
We serve clients in Rutherford, New Jersey, and elsewhere through the state, but a potential client's business domicile need not be in New Jersey. We practice in Bergen, Essex, Hudson, and Passaic counties, including Bayonne, Camden, Clifton, East Orange, Edison, Elizabeth, Irvington, Jersey City, Newark, Passaic, Paterson, Toms River, Trenton, Union, Union City, Vineland, and Wayne, New Jersey. We are also licensed to practice in Pennsylvania and New York.