Mortgage Servicer Refuses Loan Modification Request

[PatzOasis]

What is the name of your state (only U.S. law)?

California

I own a home in Riverside County, California.

[Zigner]

They are not required to comply with your request.

You are contractually required to maintain your payments.

[Indaygo]

GMAC was my lender as well. We had 3 short-sale offers submitted with no response from GMAC. They never responded to our calls, or offers, and on 10/23/08, took the home via foreclosure. (Fortunately, I have a second home) They could have had a short-sale, but instead, did nothing. They refused to work with me to refinance, modify, etc., and so I stopped making the payments. Good luck.

[Zigner]

Originally Posted by Indaygo

GMAC was my lender as well. We had 3 short-sale offers submitted with no response from GMAC. They never responded to our calls, or offers, and on 10/23/08, took the home via foreclosure. (Fortunately, I have a second home) They could have had a short-sale, but instead, did nothing. They refused to work with me to refinance, modify, etc., and so I stopped making the payments. Good luck.

Yeah! Because why should YOU take responsibility for your own obligations?!? Let the bank eat it!

[HUD-1]

They are under no legal requirement to modify your loan. They would do so only to mitigate their losses.

[PatzOasis]

Originally Posted by Zigner

They are not required to comply with your request.

You are contractually required to maintain your payments.

I understand, but aren't you simply stating the obvious, without regard to the extraordinary measures that may be necessary, in these extraordinary times? Is the mortgage servicer on solid legal ground, concerning every aspect of this issue?

Your reply does repesent the reason I've not yet retained an attorney. I'm clearly dealing with an "outside the box" situation. Surely you realize that the specific mortgage issues I'm personally dealing with, are creating an increasingly blurred real estate/mortgage legal landscape. I don't believe for a moment, that 'mortgage servicers' are immune from legal challenge, based solely upon your comment(s), "They are not required to comply with your request. You are contractually required to maintain your payments."

Thank you for your reply.

[Silverplum]

Originally Posted by PatzOasis

I understand, but aren't you simply stating the obvious, without regard to the extraordinary measures that may be necessary, in these extraordinary times? Is the mortgage servicer on solid legal ground, concerning every aspect of this issue?

Your reply does repesent the reason I've not yet retained an attorney. I'm clearly dealing with an "outside the box" situation. Surely you realize that the specific mortgage issues I'm personally dealing with, are creating an increasingly blurred real estate/mortgage legal landscape. I don't believe for a moment, that 'mortgage servicers' are immune from legal challenge, based solely upon your comment(s), "They are not required to comply with your request. You are contractually required to maintain your payments."

Thank you for your reply.

Okay, then. How about you believe whatever you want?

[tranquility]

There is currently a discussion on the mailing list "brokerdirt" of property law professors and property attorneys regarding loan modifications. It seems they are generally disfavored even when the financial aspects work out in the bank's favor. There are too many changes and legal issues to be worth the risk for the relatively small benefit to the bank.

[PatzOasis]

Originally Posted by tranquility

There is currently a discussion on the mailing list "brokerdirt" of property law professors and property attorneys regarding loan modifications. It seems they are generally disfavored even when the financial aspects work out in the bank's favor. There are too many changes and legal issues to be worth the risk for the relatively small benefit to the bank.

The distressed asset valuation problem will continue to drag down the economy and be a drain on taxpayers, until the mortgage servicers are forced to modify the principal balance of loans. I, and others like me, need to decide when to stop making monthly mortgage payments into the asset 'abyss'....now that the 'asset' is worth half of what we owe on it.

I don't deny that this is a terrible dilemma for everyone concerned. The problem has become a logjam at the mortgage servicer level, and until that logjam is broken up....by establishing realistic asset values and modifiying loans accordingly....our entire global economy remains in jeopardy.

I believe that the courts need to become involved, in order to break the logjam. The situation requires discussion AND action.

[tranquility]

The courts cannot become involved at this time as that would affect the right to contract. There is currently talk of changing the bankruptcy code to allow the BK courts to do what you propose (aka "cramdown"), but we are nowhere near a bill as yet.

[Zigner]

Originally Posted by PatzOasis

...now that the 'asset' is worth half of what we owe on it.

Are you of the opinion that you can renegotiate the balance due on your new car loan because it loses a huge chunk of value upon exiting the lot?
Are you of the opinion that you can renegotiate your credit card balance because the big screen tv you bought is now worth pennies on the dollar?

The real question is: Can you still afford to make your mortgage payment? If so, stick it out. Stick to your commitments!

[nextwife]

And what about the homeowners whose homes are also worth half of what they paid, but came in with a large down payment or paid cash, or simply didn't use credit cards, and instead paid down their mortgages? You think the LESS responsible borrowers are "entitled" to have a portion of their CURRENTLY lower value erased because it is SOMEONE ELSES money, while those whose value went down, but have small mortgages simply accept THEIR loss in value? What if you stay 10 years and it DOUBLES over what you paid, will you then want to pay the lender based on it's value when YOU sell??

What if it was YOU who lent money, and the asset the borrower obtained wasn't worth as much to them now? Should they just get to walk away from what they borrowed from YOU?

If I buy a huge TV, and then it's worth less, should I expect the creditor to just "write down" my loan to the current value? What about a car? Where do people get off thinking they should ONLY have a responsibility to pay on their mortgage if the value goes up??????

[nextwife]

Originally Posted by Zigner

Are you of the opinion that you can renegotiate the balance due on your new car loan because it loses a huge chunk of value upon exiting the lot?
Are you of the opinion that you can renegotiate your credit card balance because the big screen tv you bought is now worth pennies on the dollar?

The real question is: Can you still afford to make your mortgage payment? If so, stick it out. Stick to your commitments!

OMG! You posted after I started writing, and said basically the same thing! I had to stop, mid-post, to go tuck kiddo into bed and say goodnight.

Shall we go on?

The cruise I took wasn't worth it to me because I got seasick, so I want it reduced on my credit card. I broke up with my boyfriend, and the Rolex I got him as a gift isn't worth anything to me anymore, so I want the debt knocked down. . . .

[PatzOasis]

Originally Posted by nextwife

And what about the homeowners whose homes are also worth half of what they paid, but came in with a large down payment or paid cash, or simply didn't use credit cards, and instead paid down their mortgages?

You have intermingled 'good' and 'bad' examples. I won't bother with the bad examples, because they're just silly. What comes to mind regarding the examples that do have some similarity to my situation, you appear to be suggesting that because the people you mention are currently living with the reality of large losses, I should just resign myself to loss also? If every person in the examples you mentioned, had an opportunity to go back and change the outcome and not realize large losses.....do you think any of them would pass on the opportunity to do so? Your idealistic approach makes sense in a 'perfect world', but doesn't cut it in the currently deteriorating economic climate.

[ShyCat]

Loan modification is intended for those who demonstrably could not make their mortgage payments, not for people who can but would rather not. You wanna play the game, you gotta play by the rules and that means missed payments, ruined credit score and crossed fingers that it'll work.