From the April 4, 2009 Washington Post
Mortgage lenders have boosted their foreclosure-prevention efforts, but homeowners nonetheless are increasingly falling into delinquency even after receiving help on their loans, according to a government report issued yesterday.
The report, by the Office of Thrift Supervision and the Office of the Comptroller of the Currency, which regulate mortgage lenders, illustrates the challenges facing industry and government and government efforts to tackle the foreclosure crisis. Foreclosure rates are expected to continue to increase as the economy falters and the labor market weakens. It could take months for the Obama administration’s prescription for the foreclosure crisis to begin to have an impact.
Looks like the banks are still not stemming the rising tide of foreclosures, and that more than ever, borrowers need strong advocates in negotiating terms with the bank. Even modified loans are failing. Once modified, though, any defenses the borrower had to the original loan, such as TILA, HOEPA, RESPA, or other violaionts, that may have given the borrower the right to rescind the original loan or to get money damages against the bank, are waived. That means the borrower is sitting with a modified loan that he or she still can’t pay and now has none of his or her original defenses to the original loan. Now more than ever it is essential that anyone negotiating loan modifications or representing borrowers in distress know what rights the borrower has before modifying the loan. Once modified, those rights are likely gone for good.
Remember: Audit your loan to know specifically what is wrong with it before signing off on any loan modification.