Distressed homeowners tend to get the runaround from mortgage servicers. Some of the worst offenders are also many of the most common mortgage loan servicers in this country. If you have a home loan, chances are it’s serviced by Wells Fargo, JP Morgan Chase, Ocwen, PHH Mortgage Servicing, PNC Bank, BMO Harris, Seterus, Selene, Specialized Loan Servicers, Shellpoint Mortgage Servicing, Cenlar, Loan Depot, Bank of America, Fifth Third, Rushmore Loan Management Services, CitiMortgage or Mr. Cooper (formerly called Nationstar—they re-branded, but you know what they say about lipstick on a pig…!)
The Mortgage Servicing Industry is rotten to the core. It lies, steals and cheats, and that’s on a good day. The servicers exist to manage the loan payment process for the benefit of the owners of the loan. That is not the homeowner. They own the home. But an investor owns the loan; mortgage loans are one of the most common class of investments today. Loans or pieces of loans are sold by the bank who gave it to you. They are packaged together with other loans and sold to investors as a lucrative and safe investment product—which it usually is. This complicated scheme is called loan securitization.
But while these mortgage servicers exist to interface between the loan owner and the homeowner, they are not servicing the loan for the benefit of the homeowner. They are servicing it for the benefit of the loan owner. And this has bad consequences for the consumer, especially when the servicer doesn’t want to comply with the federal regulations that they are bound to abide by.
Why? Because servicers get enhanced fees for even just servicing a mortgage loan that is in default. And if a property securing a loan goes to foreclosure sale, that is a veritable fee bonanza for servicers.
If you fall behind or fully default on your loan, the servicer can and will sue to foreclose the mortgage, but that is not the end of the story. In many cases, it’s just the beginning. A foreclosure lawsuit does not mean you have to give up the land, at least not right away, and in many cases, not at all. Not if you work with an experienced foreclosure lawyer who knows the mortgage servicing regulations better than the mortgage servicer does.
The federal Mortgage Servicing Rules, commonly called “Regulation X,” afford Illinois homeowners a good deal of protection. Chiefly, all servicers have to review a distressed or delinquent borrower for all loss mitigation options available to them. Loss mitigation is the industry and legal term for what a loan investor (through their loan servicer—likely one of the big ones listed at the top of this post) must do to minimize its own losses before they take legal action to take their collateral (foreclose on a home). Servicers’ loss mitigation obligations are the distressed homeowner’s best friend. They are your chance to work something out, get back on track, and in many cases, save your home.
Maybe you were denied a loan modification in the past. If you are denied due to an investor restriction, the servicer was required to disclose the specific restrictions and back it up with documentary evidence that it exists, if you know how to ask for it. If you do not understand what the investor restriction was, chances are there was not a good faith reason for the denial and you might be able to get it reversed.
Lou Brydges & Associates is a law firm helping homeowners understand the foreclosure process in Illinois. We defend foreclosures and pursue all loss mitigation options such as loan modifications and loan restructuring. In certain instances (not all), a loan modification may reduce or forebear some of the principal balance of your loan. If a loan modification is not possible (it’s not for everybody) we can help to facilitate the most graceful exit from your property possible, capturing any equity you have on the way out. Our office handles short sales, traditional sales, deeds in lieu of foreclosure and consent foreclosures. Every foreclosure situation is unique and we can help you find the right solution for your family.
Maybe you’re heading into foreclosure and your intention is to give up the land eventually because you can no longer afford the loan, but you’re not quite ready to do so yet—maybe you want to wait until the kids are out of school, until a sick relative recovers, or any number of other reasons why you can’t leave your home yet. Until you are ready to leave, we may be able to keep you in the home with litigation tactics while you prepare and save money for your next stage in life. We often are able to negotiate relocation expenses – cash paid to you by the servicer that you can to put towards moving out and moving on.
Lou Brydges & Associates has been helping to de-stress distressed homeowners for over a decade. We service clients all over Chicagoland and the collar counties: Cook, Lake, DuPage, Will, Kane, Kendall McHenry Counties, and others. Click or call to contact us today for a free one-hour solution. We look forward to hearing about your unique financial circumstances and helping you fashion the solution that’s right for you.