Mortgage Loan Modifications
By Kurt O'Keefe, Detroit Consumer Attorney on Jan 22, 2009 in Uncategorized
Mortgage companies took turns with their announcements of billions of dollars allocated to mortgage modification to help homeowners avoid foreclosure. No need for Congress to get involved, we will help people in these hard times.
Well, #1 mortgage orignator Countrywide now says those statements were “mere commercial puffery” and “only Countrywide’s vague advertisements.”
That is what its lawyers told a New Hampshire Court this week.
The lawyer for the homeowners who responded to the public relations avalanche of “we will work with you” says: “Countrywide is saying, ‘We don’t have any obligation or even necessarily the intention of actually modifying these loans,’ and yet they’re representing that they do.” Nationally, these mortgage modifications just are not happening.
What is needed to allow people to stay in their homes is to re-write interest rates, balances and monthly payments. Most mortgage companies will not do that, maybe lowering the monthly payment for a short time, but adding any missed amount to the balance and extending the loan, according to statistics compiled by the National Association of Consumer Bankruptcy Attorneys.
Chapter 13 bankruptcy reform proposals pending in Congress would allow bankruptcy courts to do what is needed to prevent foreclosure, lower mortgage balances to the value of the home.
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