Notice of Auction Sale During Pending Modification Process???

[sandyclaus]

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

My family is having an issue right now, and was hoping to get some advice on how to proceed.

We have been in the loan modification process since February. The problem? The bank seems to be having an issue with figuring out her income because they can't figure out how she gets paid.

The borrower gets paid in an unorthodox way - she works as a nurse for a registry, she:

• she works at different locations, based on the needs of the registry on any particular day - like a temporary assignment
• gets paid an hourly wage plus travel expenses
• receives pay on a pay card (debit card) within hours of turning in a timecard via fax
• receives one or more paycheck stubs on a weekly basis - one for each day she worked, but all dated on the same date (the stub processing date)
• her hourly pay is taxed
• her travel pay is NOT taxed

Despite many attempts at explaining how the pay works (including at least 100 phone calls, letters from the borrower, and letters from the borrower's employer), the bank simply cannot figure out her actual usable income in order to process the modification. All of her paycheck stubs, pay card records, and every other requested document to support her income has been submitted time and time again. Our biggest fear is that the modification will be denied due to the bank's inability to add the numbers and figure it out. We have been assured that they have not yet DENIED the modification and it is supposed to be pending. Meanwhile, due to the legal ramifications, of course the bank is refusing to accept any partial payments towards the mortgage and will only accept the full past due amount back to February.

The kicker is that about a week ago, we found a notice on the door stating that the bank was proceeding with a sale at auction, indicating that the foreclosure is moving forward. We live in California, and there is new legislation that takes effect in January that prohibits lenders from foreclosing while a loan modification is pending. The problem is that the system doesn't even show a modification has been requested yet. Forms have been submitted to the bank but the point of contact with the bank STILL HAS NOT SUBMITTED IT FOR APPROVAL. He has all that paperwork and is still holding onto it, and the systems don't show that a modification has even been requested for our loan.

Is there ANYONE out there who has a clue what we can do to stop this? Is there any law in force that protects the house from being sold pending the modification process we are still in the midst of?

ANYTHING you can suggest would be terrific.

 

[Mass_Shyster]

• We have been in the loan modification process since February.
• The problem is that the system doesn't even show a modification has been requested yet.

1) File for an injunction enjoining the bank from foreclosing on the house in violation of the new law. Show the correspondance with the bank as evidence of the ongoing loan modification.

2) If owner cannot pay the arrears, she may qualify for a chapter 13 bankruptcy, which would immediately halt the forclosure process.

 

[sandyclaus]

Thanks, Steve.

The new law does not take effect until January 13, 2013. My question with regard to that was whether or not there are current protections of any sort in place for this situation? As it was explained by the bank (by two different people), a note in their system that a modification is in process/pending prevents them from taking further action to foreclose. How convenient it is that the rep that is handling the modification application process hasn't documented that a modification is in process (the "flag" isn't set in their system), and therefore, the foreclosure process is advancing. Yes, there is a paper trail, but their system doesn't reflect that because the rep hasn't actually submitted the completed paperwork to begin the approval process - he's just gathered it and held it.

Bankruptcy MAY be an option, but so is money. Unfortunately, the SIL hasn't had regular work with the registry over the last month (she has worked 3 times in the last 3 weeks), and therefore the funds to pay for either a bankruptcy OR an injunction are going to be very difficult to come by.

Any self-help suggestions?

 

[tranquility]

If the bank is one covered by the federal consent decree, I believe that also has provisions against dual-tracking. I know B of A is one of the banks, but don't know the others.

(On a sadder, side note, if SIL's income is so intermittent that she has only worked 3 times in the last 3 weeks, the modification may be denied and foreclosure can continue no matter the law.)

 

[Mass_Shyster]

If there's a new law going into effect, I doubt there's any other protection in place, but that's only a wild guess on my part.

I would put together a spreadsheet of earnings showing (across the top) gross pay, withholdings and mileage reimbursements all as different columns. One row for each deposit, with subtotals on everything by month. Put ALL of her information (Name, address, property address, loan number, etc) on the top of every page, and number the pages 1 of 4, 2 of 4, etc.


Income Summary for Jane Doe, 123 Main Street, Anytown, CA, 98765 Loan #: 1234456 Page 1 of 4

Date	Deposit Amt	Gross Pay	Fed Tax	State Tax	FICA	Net Pay	Mileage
01/01	$100.00	$100.00	$1.00	$1.00	$1.00	$97.00	$0
01/02	$55.00	$0	$0	$0	$0	$0	$55.00
01/03	$123.00	$100	$1.00	$1.00	$1.00	$97.00	$23
January Total	$278.00	$200	$2	$2	$2	$194	$78
02/01	$100.00	$100.00	$1.00	$1.00	$1.00	$97.00	$0
02/02	$55.00	$0	$0	$0	$0	$0	$55.00
02/03	$123.00	$100	$1.00	$1.00	$97.00	$23
February Total	$278.00	$200	$2	$2	$2	$194	$78

(Make yours so the columns line up)

 

[sandyclaus]

If the bank is one covered by the federal consent decree, I believe that also has provisions against dual-tracking. I know B of A is one of the banks, but don't know the others.

(On a sadder, side note, if SIL's income is so intermittent that she has only worked 3 times in the last 3 weeks, the modification may be denied and foreclosure can continue no matter the law.)

The loan is currently being serviced by Ocwen, which I understand to be part of the Wells Fargo family, and the very bank that issued the loan. According to the info I found, Wells Fargo is indeed subject to the decree. If you could help me understand the dual-tracking concept that the federal consent decree is supposed to provide a provision for, that would be AWESOME.

As for the income issue, that's temporary and only affects her for the past couple of months. It doesn't explain why Ocwen has not tracked the modification application from February until then. As we understand it, the issue with them actually submitting and approving the modification has to do with income, but only because they don't seem to be able understand how to calculate the income she has, which has been otherwise been MORE than sufficient to approve the mod.

 

[sandyclaus]

If there's a new law going into effect, I doubt there's any other protection in place, but that's only a wild guess on my part.

I would put together a spreadsheet of earnings showing (across the top) gross pay, withholdings and mileage reimbursements all as different columns. One row for each deposit, with subtotals on everything by month. Put ALL of her information (Name, address, property address, loan number, etc) on the top of every page, and number the pages 1 of 4, 2 of 4, etc.


Income Summary for Jane Doe, 123 Main Street, Anytown, CA, 98765 Loan #: 1234456 Page 1 of 4

Date	Deposit Amt	Gross Pay	Fed Tax	State Tax	FICA	Net Pay	Mileage
01/01	$100.00	$100.00	$1.00	$1.00	$1.00	$97.00	$0
01/02	$55.00	$0	$0	$0	$0	$0	$55.00
01/03	$123.00	$100	$1.00	$1.00	$1.00	$97.00	$23
January Total	$278.00	$200	$2	$2	$2	$194	$78
02/01	$100.00	$100.00	$1.00	$1.00	$1.00	$97.00	$0
02/02	$55.00	$0	$0	$0	$0	$0	$55.00
02/03	$123.00	$100	$1.00	$1.00	$97.00	$23
February Total	$278.00	$200	$2	$2	$2	$194	$78

(Make yours so the columns line up)

Been there, done that. We have made multiple spreadsheets, provided all pay receipts, everything. It is also important to note that the rep who is currently the point of contact for her loan mod is in India (outsourcing at its finest), and there may well be a language barrier in the explanation. We also know that when documents are sent to complete the application, they go here to the states, and since the point of contact isn't here, all he gets is an interpretation from someone else in the company and not the actual docs to back it up. Ultimately HE (the point of contact) is in charge of forwarding the application to get the process going. He isn't doing that because of the missing information needed to clarify the situation.

 

[tranquility]

The loan is currently being serviced by Ocwen, which I understand to be part of the Wells Fargo family, and the very bank that issued the loan. According to the info I found, Wells Fargo is indeed subject to the decree. If you could help me understand the dual-tracking concept that the federal consent decree is supposed to provide a provision for, that would be AWESOME.

As for the income issue, that's temporary and only affects her for the past couple of months. It doesn't explain why Ocwen has not tracked the modification application from February until then. As we understand it, the issue with them actually submitting and approving the modification has to do with income, but only because they don't seem to be able understand how to calculate the income she has, which has been otherwise been MORE than sufficient to approve the mod.

Sorry. I tried to find the exact wording of the law to be enacted and the consent decree and they are a little hard to find the relevant portions. Like taxes, there is an interaction among many different portions of the law/agreement that requires looking up and understanding that portion as well, before going back to the previous portion to find some clarity. Then, another reference to another portion. To really make an argument, you need an understanding I just can't give you without a ton of study. (Even then, who knows?)

For the basic issue, it seems there cannot be a "material" furthering of the foreclosure process when the modification is in process and before there is an answer. Some articles felt that was a huge wiggle room error that needed to be corrected while others didn't even mention the fact. Since it is so new an untested in the courts, I'm not sure a clear answer would be available in time to help.

As to the more than enough income, the mortgage hasn't been paid since February and, because of this month's work schedule there is not enough money for a foreclosure attorney for an injunction or for a BK attorney. I sympathize, and maybe Antigone* would know better, but that seems a problem.

 

[sandyclaus]

Update

All of the information provided was pretty much as I expected. The info on the federal consent decree seems to be the most pertinent. Many thanks.

We actually have a website for Californians that help them explore options to save a house pending foreclosure. The site, keepyourhomecalifornia.org, offers several, two of which are very promising:

• Unemployment Mortgage Assistance, which offers mortgage payment assistance up to $3,000 a month for up to 9 months for those who become involuntarily unemployed and who are receiving California EDD Unemployment benefits; and
• Mortgage Reinstatement Assistance Program, which offers a one-time payment of up to $25,000 to cover principal, interest, taxes and insurance, as well as any homeowner's association dues.

The site offers a toll-free number to speak with a counselor, and references to local attorneys who can assist for a reduced fee. We have a meeting tomorrow. The goal is simply to stop the foreclosure sale while we figure out and exhaust all other available options. We don't feel like being out on the streets come New Year's Day... especially over something that we don't feel should ever have happened (at least not yet).