Foreclosure Help ?

If you are looking for the Government to help with your foreclosure fears you may as well stop searching the net. There is none. Not real help, not the type you’re really looking for. While many of these sites imply help, you will find none is available. Unless you are, as the Government assumes, just plain stupid and can not take care of yourself. For the record, the government does not provide grants or loans to individuals; so if you are looking for a check, drop that idea.

The most you will find provided on a myriad of government sites, once you sift through all the minutiae, is credit counseling. All of it geared, it would appear, towards helping the lenders not you. The government assumes you are not smart enough to know how to pay your bills correctly or properly allocate the available income you have in the appropriate manner so they, in their infinite wisdom, will tell you exactly how they want you to do it. And again this may not be to your benefit.

Take for example the story of a Florida couple (hereafter called Dick & Jane to protect their identities) that turned to their local government funded community legal services organization for assistance in dealing with a less than reputable lender. This particular lender has already been fined by the Feds nine (9) million dollars for not properly servicing government backed loans and also had their corporate offices raided for suspicion other violations the first week of August 2009. {UPDATE: This mortgage company is now defunct and all its executives are sitting in jail convicted of myriad of charges.}

Dick & Jane got into this “trouble” by no real fault of their own. Dick was laid off from his job at a Fortune 100 company in early 2009 losing a rather comfortable income. The layoff due to, according to his separation letter, “current economic conditions.” Interestingly enough this very same company, which has other divisions that supply the Auto industry, was forced by the Automakers Unions to fire all temporary contract employees including Dick & Jane’s son shortly after the election of Barrack Obama. It was however widely rumored that this action was coming once McCain clenched the nomination and the markets began to tank. (But that and the mysterious disappearance of trillions of dollars from the market is another story)

Following this loss Dick garnered the maximum benefit from Florida Unemployment Compensation, a whopping $275.00 per week, an amount woefully inadequate to provide the necessities of a household let alone the mortgage, insurance, taxes, etcetera, the total of which was less than 20% of his working income. Consider that Dick has paid into "unemployment insurance" for more than thirty years.

Jane is working part time 15 hours per week as a restaurant server earning approximately $800.00 per month, which is, under the table, and is arguably non-taxable since it is below $8350.00 IRS 10% threshold. So between the unemployment and Jane’s tips they were able to keep food in the refrigerator, gas in the car and the lights on. Sound familiar? Paying a mortgage, with the taxes and insurance escrow included, was over $1200.00 per month and is impossible.

Dick has written his lender multiple times requesting mitigation options and information for their FHA Mortgage. He also sent two (2) checks in substantial amounts covering monthly principle and interest in a effort to stay current but these checks were refused and returned by the lender. Fearing foreclosure will be eminent at the 90 day late point, Dick & Jane specifically request legal assistance at their County’s Legal Aid Office. They are informed of this “fabulous” new grant from the Federal Government that will help them greatly. The grant is the 50 million dollar National Foreclosure Mitigation Counseling Grant, sounds great right? Well following some very useless intake paperwork, which in typical bureaucratic fashion, took three appointments to fill out, they finally have an appointment with the Attorney. Mind you that Dick and Jane’s original request was for legal assistance to deal with an unresponsive and assumingly disreputable lender.

Well Dick and Jane, both well educated and experienced middle-aged responsible adults are shown into a closet of an office where a pimply faced, twenty-something recent law school graduate sits behind a grade school teacher’s desk flipping through all of the intake paperwork. The Attorney says, “ Well I’ve looked through your financial statement and it appears you have a problem.”

Well duh.

“I suggest you begin making payments on your secured loans, like your house or you’re going to lose it”.

Again duh.

“I also suggest you stop paying your unsecured and non essential bills like your phone and cable bill.”

Dick and Jane have bundled service which includes landline for 911, satellite TV and most importantly for Dick’s job search, Internet access; all of which they are under contract for and purchase cheaper than just the satellite alone. They have also carefully crafted separate, individual lines of credit history just in case financial trouble does hit, one such line would not be affected. They did so by keeping secured and unsecured credit individually. (A future post, ladies this one could be important to you)

The attorney then says, “also you have to do what the lender tells you to do.”

Well gee that’s to their advantage, just hand over your house now. Here Mr. Lender this all my equity and everything I worked for, go ahead you take it we’ll just live on the street.

“Further I urge Jane to get a real job and start paying taxes.”

Jane’s part time earnings average around $20.00 to $30.00 per hour. Not exactly the type of a job you quit when you are a full time Mom, just so some liberal ACORN-er can get more taxpayer money.

Dick informs the “attorney with an agenda” they do not need, require or even asked for credit counseling. In fact, he specifically informed the intake clerk that if the grant is all counseling we don’t want to waste our time. We are well aware of our status and responsibilities. We came here only for legal assistance in dealing with our lender, which it appears to us, is not complying with FHA mortgage rules. We need an advocate not a Mommy.

The attorney replies. “ Oh I can’t give you legal advice.”

Why are we here? Oh yeah, for legal help.

Following a bit of research the attorney is correct about one thing. The National Foreclosure Mitigation Counseling Grant is to pay for credit counseling only, up to maximum of $350.00 per qualifying household. The money is to pay for the time & training of the counselor and in no way can go to any person or lender for any reason.

Therefore, until real legislative helps arrives forget the government helping you, this 50 million dollars is to be spread amongst organizations that provide counseling services. Oh I forgot, if all the funds are not used they are to be kept by that organization or agency and redistributed to other resources. By the way, the length of Dick & Jane’s Phase 1 counseling appointment was less than 10 minutes, calculated out that is a counseling fee rate of $900.00 per hour. (Phase 1 counseling allotment is $150.00 per household)

A follow up letter received by Dick and Jane outlines the above including the liberal idiocy of Jane giving up her $20.00 + an hour job to take a low, but tax paying job. Also in this letter, this government-funded agency had the audacity and temerity to solicit a contribution to “help other clients.

The conclusion arrived to via the research done into this Federal Grant and knowing Dick and Jane’s story is this program like many other Government programs, disguised as help for you, really is just another lobbyist aided government tactic to help lenders and fund the agendas of political groups. (AKA Buy Votes) .

If your looking for help, as Dick & Jane found out, the government will provide none. Do not waste your time and energy. There might be help somewhere I just haven’t found it.

This post has been written to prevent you from putting false hope in all the Government implications of help. In foreclosure matters time is of the essence wasting it is not in your best interest. If you have a reputable lender, deal with them. It is the only way to mitigate your issues. I do suggest you try to keep all correspondence in writing, even if you talk to your lender’s agent always confirm the conversation and your understanding of it in a follow up letter.

One rule of the business world applies; document everything, “if it wasn’t written it wasn’t said.”

As a further update and perhaps some hope for others, Dick and Jane’s home was foreclosed on, however the Bank that assumed their mortgage via MERS and iniated this foreclosure action lost the battle in court. The bank’s foreclosure suit against Dick and Jane was summarily dismissed without predjudice because the Bank did not have the right or the proper documents proving the right to foreclose.

The best course of action is to consult an Attorney (a real one), especially if your mortgage has been “assumed” by another lender via MERS. Be sure that your attorney researches Landmark Bank vs. Kessler. In this case it was adjudged by the Kansas Supreme Court that mortgage reassignment via MERS is unconstitutional and foreclosure actions can only be brought by the lender of record.

Dick and Jane are still in their home two years later, and though they await further actions by a Bank that may elect to try to foreclose, their defensive war chest is full since there initial foreclosure case was dismissed solely because the foreclosing bank could not produce the original note.