Posted by Stamper_WI on 4/17/09 7:59am
Msg #285446
On Loan modifications
I strongly urge you all to look into your state laws in regards who can do these and who can't. I made the inquiry to the Wisconsin Dept of Banking through the Dept of Finance and got a lot of information. It seems a particular comapany that we all know is not liscensed to do what they are doing in WI.
I added a page to my website about this with links to the liscensure page as well as a pdf on the part of the new WI law covering loan modifications. My name is linked to my profile where you can find the link to the website.
| Reply by Michelle/AL on 4/17/09 8:27am
Msg #285447
Not a bad idea, Stamper. Come to think of it, I don't
do any checking of licensing for any company that calls me. Hmmm....do you see modifications as being a whole different animal, needing more scrutiny?
| Reply by Stamper_WI on 4/17/09 8:32am
Msg #285448
Re: Not a bad idea, Stamper. Come to think of it, I don't
At this point I have done only the one application and it didn't sit right. That sent me off on this quest. So I have been turning them down. There really haven't been that many requests and what I have received were all from the same company. No actual modifications. It may be because I am a lightly populated area in comaprison to other parts of the state. If its coming directly from the lender and is not the application., I won't have a problem with it.
There are more, nice sound refinances though!
| Reply by Teddog/CO on 4/17/09 9:13am
Msg #285452
Stamper WI
Excellent idea Stamper. Like you I will only do actual modifications from a Lender. No applications! Already have had calls from a company already discussed (you all know who they are) here and turned them down. On this nice snowy day a little research sounds like a great idea to me. Could just be getting nervous in my old age. These companies taking someone's money with no assurance or actual date that any modifications will happen. If all the information is not given in black & white it has all the ear-marks of fraud. JMO I'm sure not going to collect checks for these crooks.
You all have a great day 
| Reply by Les_CO on 4/17/09 9:34am
Msg #285454
New TIL/RESPA Laws/May stop 21 Century?/ long
Issue Date: RESPA News Monthly
April 2009, Posted On: 4/13/2009
TILA reform 101: What lenders need to know
It is well-acknowledged that 2009 is turning out to be a significant year for compliance regarding federal law. The industry is faced with new Truth-in-Lending Act (TILA) and RESPA reform measures, resulting in an immediate need for implementation and compliance.
Recognizing this need for awareness and understanding, three industry experts spoke in an audio seminar at the end of March, which was hosted by a popular list serv, Reg ListServ LLC. The presenters included: Ken Block, vice president, compliance and assistant general counsel, Home Loan Center Inc., who detailed the TILA reform; Becca Tarbox, quality assurance and compliance for Guild Mortgage, who covered the Home Valuation Code of Conduct; and Ken Markison, associate vice president and regulatory counsel at the Mortgage Bankers Association, who covered new developments on Capital Hill and an overview of federal regulatory changes.
According to Block, there are two dates to keep in mind for the new TILA rules. One is July 30, 2009 — when the TILA amendments from the Mortgage Disclosure Improvement Act (MDIA) of 2008 go into effect — and Oct. 1, 2009, when the TILA final rule, written by the Federal Reserve Board, goes into effect.
The MDIA came from the Bush’s administration’s Housing and Economic Recovery Act of 2008. According to Block, there are a few differences between the amendments and the TILA final rule; however, there is some overlapping as well. Why the need for change?
“The goal of the amendment for the Truth-in-Lending Act final rule was to protect consumers in the mortgage market from unfair abusive or deceptive lending while preserving responsible lending and sustainable home ownership,” said Block. “Really, what we’re talking about here is treat our borrowers fairly, avoid all deceptive practices and act as responsible lenders.”
Three-seven-three rule
Currently, lenders provide disclosures under the Truth-in-Lending Act to consumers within three business days after the receipt of an application. According to Block, the new rule is going to change this process.
“It all turns on whether or not you accept any advance fees,” said Block. “The new rule basically says a lender cannot impose an advance fee, other than a fee for obtaining a consumer’s credit history, until after the consumer receives the disclosures required under TILA. The one exception they did make for us is we can collect a credit report fee so long as such fee is bona fide and reasonable in amount.”
An advance fee, for example could be an appraisal fee or lock-in fee, of which mortgage lenders may be collecting from consumers.
“If you place [the disclosures] in the mail, under these new rules, lenders must wait three business days prior to charging an advance fee to the consumer,” explained Block, and added that under both the MDIA and the TILA final rule, if a lender is going to place the TILA disclosures in the mail, the lender can charge the fee any time after midnight on the third day business day.
The seven-business-day rule came out in the Mortgage Disclosure Improvement Act amendment. This rule says a lender cannot go to the loan signing until seven business days after the disclosures have been mailed to the consumer.
“There is a practical impact here,” said Block. “Sometimes you can close a loan within a week for certain consumers, certain situations. But, under these new rules, you cannot go to the closing, to the signing, until about nine or 10 days, if you talk about calendar days from application to signing. That will impact some lenders.”
Block mentioned an exception to this rule. A waiver of the seven-day rule is allowed for a bona fide personal emergency. He, however, thinks lenders will heed caution on using this exception.
What will the challenge be for lenders to implementing this portion of the rule? Block said lenders will be forced to alter their advance fee processes or come up with other solutions to get disclosures into the hands of applicants sooner.
“If we’re meeting consumers face-to-face, we can hand them a set of disclosures, no problem. But if we’re dealing with consumers over the Internet, over the phone or by mail, that’s going to cause some hardships. We’ll need to promote solutions to meet the new requirements,” he noted.
Under the MDIA, a new disclosure statement will be required for lenders. According to Block, currently, a lender’s TILA redisclosure can occur with final loan documents at the closing. Under the new rules, however, if the annual percentage rate (APR) changes beyond the permitted tolerances, the lender must provide a new Truth-in-Lending disclosure not later than three business days prior to the loan signing.
“This new [disclosure] statement says, and I’ll quote it: ‘You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.’ Again, this meets the theme of the Truth-in-Lending Act amendment that we encourage shopping. So the consumer needs to realize that even though they’ve received this disclosure, they’re still able to consider offers from other lenders,” said Block.
The TILA final rule says the disclosure requirements apply to both purchase and refinance loans. Block said similarly, under the MDIA — and this is a big change for lenders — the disclosure requirements apply to any transactions secured by any dwelling, for example, a vacation home. Currently, lenders can limit the provision of TILA disclosures to the consumer’s principle dwelling. Block added that the disclosure requirements do not apply to home equity lines of credit.
Higher priced mortgage loans
The TILA final rule also established a new category of loans called higher priced mortgage loans, and a new threshold applies as well. A new index has been created called the “average prime offer rate.”
“We’re all, for the most part, very familiar with the Section 32 indexes and applicable treasuries that we use to measure things, but now we have a new category called ‘average prime offer rate,’” said Block. “A loan will be considered a high priced mortgage loan if the APR is 1.5 percent or more above this index for comparable loan transaction. For seconds, instead of 1.5, we use the 3.5 percent.”
Block added that the average prime offer rate will be derived from average interest rates, points and other pricing terms offered by a representative sample of creditors on low-risk mortgages.
“We believe we will be using the Freddie Mac Primary Mortgage Market Survey for the initial setting of this rate,” he said.
There are restrictions that apply to these loans. According to Block, it would be considered a violation of TILA for any higher priced mortgage loan to be made solely based on the collateral value without regard to the borrower’s ability to repay. Also, if you have a higher priced mortgage loan, then you cannot use stated income, and if there is a prepayment penalty being imposed, it is restricted and limited to two years max. Furthermore, Block said taxes and insurance must be escrowed on all higher priced mortgage loans, and a lender cannot structure the loan as a home equity line of credit solely to avoid these higher priced mortgage loan restrictions.
These requirements go into effect Oct. 1, 2009.
The reality
So, what are lenders faced with regarding these new TILA rules? They will have to figure out: advance fees, how they will get disclosures to consumers more quickly, how redisclosure requirements will be done earlier in the transaction and how they will deal with higher priced mortgages and what impact that will have.
One other major concern that has sprung up continuously in conversations regarding the new TILA rules is their timing with the new RESPA requirements.
“We have the new TILA rules…, but we also have the RESPA new [good faith estimate] requirements and new HUD-1 requirements that will come into play Jan. 1, 2010,” noted Block. “A lot of that sort of overlaps and will affect how we handle our disclosures in TILA.
Ken Markison, associate vice president and regulatory counsel, Mortgage Bankers Association, agreed.
“The MBA has been very clear and was clear last week in testimony that what needs to be done is to bring the TILA and RESPA disclosures together,” said Markison. “That is, bring the whole reform process together so that we end up with a good set of disclosures for consumers and don’t unduly bill consumers for the cost of implementing something two times instead of one.”
| Reply by Linda Hubbell on 4/17/09 9:45am
Msg #285456
Not sure, Les...a quick read I see
it seems to be lender oriented...lender, lender, lender...I didn't see any mention of modifications and/or loan modification companies, foreclosure rescue companies, etc., etc...
Yes, it does say it applies to any transaction "secured by any dwelling" but in the situation of a modification the security interest is already in place - it's just being modified...
My .02 FWIW
| Reply by Stamper_WI on 4/17/09 9:51am
Msg #285458
Re: Not sure, Les...a quick read I see
This is directed at the "helper" companies not the actual lender that does the modification
Here is what the helper's do ( more accurately don't do) All stuff the homeowner probably has already done.
"A fee of $2,768.52 for the following Service:
• Request adjusting, elimination or repayment plans on any delinquent or past due balances.
• Request Current Status on Credit Report to all three (3) agencies (not guaranteed).
• Request adjusting to current and future rate of interest charge and monthly payments.
• Request loan balance amount to be adjusted if needed due to Loan to Value.
• Request loan to be converted to one longer Fixed Term
| Reply by Teddog/CO on 4/17/09 10:21am
Msg #285463
A little off the modification topic. Food for thought.
While the lenders and the government drag their feet to do modifications for BWR's that are sinking fast in this economy. BWR's circumstances have changed through no fault of their own, health, job loss,...
Every late payment to cars, homes and credit cards just keep lowering their credit scores. Putting the BWR in a "no win, no win" situation. They can't re-fi because now their credit scores are dropping like a rock.
JMO Are lenders just "setting-up" people to go into foreclosure when in fact lenders can help people save their homes with modifications to their loans. Food for thought, do lenders want to foreclose and hang onto these homes and resell when the markets re-coup. Lenders set people up with poor lending practices and it appears to me JMO lenders are just setting people up again for the royal @crew job. I would call that fraud and take the government bailout money to boot. It's no wonder they are show record profits for this quarter.
I fear that we are going to go back to the 70's and 80's when interest rates where sky high and to buy a home you will need some outragous down payment. Again JMO there will be NO middle class left in USA, just the haves and have nots.
| Reply by Stamper_WI on 4/17/09 10:30am
Msg #285466
Re: A little off the modification topic. Food for thought.
Obama's program started Wed. Hopefully we will start to see them
| Reply by Teddog/CO on 4/17/09 10:38am
Msg #285469
HI Stamper. Wow I sure hope so!
They better get their butts in gear fast. I fear we will be seeing more then "Tea Parties" veryyy soon. Americans just don't like living in Tent Cities and going hungry.
| Reply by Stamper_WI on 4/17/09 10:51am
Msg #285473
6 companies so far
receiving funds for modification
"The refinancing plan is limited to borrowers who owe up to 5 percent more than their home's current value. The administration has estimated the program could help 9 million struggling homeowners avoid foreclosure."
http://www.king5.com/business/stories/NW_041509BUB-AP-mortgage-bailout-companies-TP.da8d2f7a.html
http://www.huffingtonpost.com/2009/04/15/six-companies-to-get-10-b_n_187532.html
| Reply by ReneeK_MI on 4/17/09 10:41am
Msg #285470
As I posted elsewhere, my daughter got one
directly from Chase, just a couple calls and some paperwork, was pretty much a cake-walk. He's now on his 4th or 5th paycut (Chrysler/contract IT), they were given a 4.75-ish (don't remember exactly) rate from original of 6%. (By the way, no way would anyone be able to identify my daughter using MY name, so ix-nay that whole conversation.)
Sometimes it's as simple as asking for what you want or need. From what I've seen, people DON'T ask, they hide and they worry and they fret, but they don't pick up the phone BEFORE things get too toxic to fix.
| Reply by MistarellaFL on 4/17/09 10:51am
Msg #285474
Re: As I posted elsewhere, my daughter got one
<<<people DON'T ask, they hide and they worry and they fret, but they don't pick up the phone BEFORE things get too toxic to fix.>>>
While I somewhat agree with that statement, I can't completely agree.
Last summer I was doing alot of work for NCCI, for their modification department, making contact with delinquent brws and offering them a modification solution.
I spoke with hundreds of local borrowers who had been trying to deal directly with their
lenders regularly, but couldn't get past the collection departments. They were asking,
but weren't getting any response, other than the standard collection speils.
Brws were telling me that they couldn't believe that after all the time they had spent
attempting to solve their dilemma directly with the lender, that the lender was paying
a company to knock on their door and offer them what they had been asking for, for months.
| Reply by Teddog/CO on 4/17/09 11:05am
Msg #285478
MistarellaFL
How very true. The very first person to call when you know you are having problems is your lender. Getting the lenders to co-operate is a whole different program.
| Reply by ReneeK_MI on 4/17/09 11:05am
Msg #285479
Ahh - here's further info, fyi
My 'kids' called the lender directly, not the servicing dept. and not the collections dept. They called and asked for "modification" dept. This was a little bit of a tangle, and they did experience the left hand not having a clue what the right hand was doing. Lender has a modification dept - mod dept kept assuring them, saying 'ignore collection dept, we can't stop them until the mod is completed.'
| Reply by Teddog/CO on 4/17/09 10:59am
Msg #285476
Re: As I posted elsewhere, my daughter got one
Hi ReneeK,
Your daughter is a lucky gal. There are thousands of BWR's that can't even get their lenders to call them back. Some of these lenders are just transfering BWR's to dead end extensions and voice mails that are always filled. My neighbor has been doing battle with Ditech since October and their lawyer is hot on Ditech's trail. Contacting FTC, State of Colorado and regulators, endless letters to Ditech,... It's just not a pretty picture for a majority of Bwr's. My neighbors both got laid off from their high paying tech jobs and have been paying on that house for 14 years. They have found employment for less then 1/2 of their orginial salaries. Hopefully Obama's news regarding modifications will save them. They are great neighbors.
| Reply by ReneeK_MI on 4/17/09 11:18am
Msg #285480
Yes, I agree and believe you're so correct ...
They are/were VERY lucky - although I don't believe in "luck". Maybe a payback from the Bank of Karma. However, they are still just one more paycut (or worse) away from simply not being able to afford ANY kind of pymt.
| Reply by MikeC/NY on 4/17/09 4:58pm
Msg #285518
Re: A little off the modification topic. Food for thought.
"JMO Are lenders just "setting-up" people to go into foreclosure when in fact lenders can help people save their homes with modifications to their loans. Food for thought, do lenders want to foreclose and hang onto these homes and resell when the markets re-coup."
I don't think this is the case - most lenders don't WANT to foreclose, because then they're stuck with the inventory and it costs them to maintain it. It will be years before the markets in some areas of the country get back to the prices seen several years ago, and that's really because those prices were totally unrealistic. I doubt that the lenders want to sit on vacant houses for that long. Historically, real estate values double every 10 years or so; what we saw in the boom years blew that out of the water. What we're seeing now is not a collapse, but a market adjustment to where prices SHOULD be. Of course, people who bought at the height of the market don't see it that way...
In NY, foreclosure is not an easy thing to do - it usually takes about a year, and lately it's up to 18 months or more. A law was recently passed here that requires a preliminary conference between sub-prime lenders and borrowers before a foreclosure action can even be started; the intent is to try to reach an agreement and modify the loan if at all possible. I am not a big fan of the NY legislature, which has to be the most dysfunctional in the country, but every so often they get one right...
| Reply by ReneeK_MI on 4/17/09 10:33am
Msg #285468
Couple additions to consider ...
The modification applications do not require a notary public, and those who have done these for That Company have said they were 'required' to present themselves "as a representative". Oh boy, doesn't THAT open a can o' liability worms? How does anyone think they can pull the "just a notary" card on THAT?!
When they call ME they hear WHY I am not accepting any type of work or connection from/to them.
Excellent stuff, great work Zana! =)
| Reply by Stamper_WI on 4/17/09 10:41am
Msg #285471
Re: Couple additions to consider ...
Thats what got me going. I did not want anything to do with appearing to condone this. That is the position I was put in. I had already told the company I was not their Rep. But what they told the homeowner was that I was. I straightened them out on that first thing.
| Reply by Stamper_WI on 4/17/09 1:21pm
Msg #285498
Just checked the reports on my website
This month alone, over half arrived at my website with keywords involving loan modifications in Wi
Here are some of the queries:
Loan modification companies in WI
list of suspected fraudulent loan modification company
Loan Modifications WI
wisconsin loan modification law
loan modification, wisconsin
Wi LAw enforcement Home loans
Half of them seem to be disgrunteled. 2,3,&5
| Reply by Stamper_WI on 4/17/09 1:34pm
Msg #285500
Re: Just checked the reports on my website
Guess I can't count 2,4,6. Darn bifocals!
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