February 24, 2009
When a borrower enters into a forbearance agreement with a debt collector (loan servicer) any and all amounts that may be stated as due or past due within the agreement, are still subject to validation under RESPA Section 6 and/or Section 809 of the Fair Debt Collection Practices Act. Or, does signing the agreement “verify” the debt forever, thus precluding any and all future request for validation or explanation?
As you may well know, a forbearance agreement, written by the loan servicer or debt collector on the eve of a foreclosure sale, is always, or most often, favoring the financial rewards of the servicer and seldom, if ever, the borrower.
Our servicer, SN Servicing, Inc., claims once you are forced into an agreement and sign it, as in our case under duress, you forfeit all rights to debt validation. Your signature validates any and all sums contained or referred to within the documents and you surrender all statutory rights, both Federally and those within applicable State Statutes.
Without the clearly defined legal right to have the debt factually and accurately documented, either before or after signing, has and will lead to continued abuses of the borrowers by the servicers.
Without proper regulation the forbearance agreement, in the hands of the unscrupulous collector in this devastated financial market, will become no more than a “ransom note” demanding payment of any and all sums they choose to fabricate, metaphorically, presented in a box with the severed ear of a loved one. You either accept their demands for payment or lose that which you love so dearly and have struggled for so many years to maintain.
Where can I get a clarification of this question? Thank you again for your assistance.
February 3, 2009
I can not afford to pay my mortgage an retire in 6 year on my pension. I have an V A loan, with Citimortgage of Citigroup.
If I stop paying and notify them that I can afford the payment. What could happen, credit wise can I repair it. Or could judgement against me or wage bank account or ect.
What the least and most that could happen and how to deal with it.
December 26, 2008
It seems to be standard operating procedure for lenders to force borrowers to sign away their rights in the form of a (sneaky) waiver when entering into a workout to retain the home (i.e. forbearance agreement, loan modification, etc). Well, it appears these waivers are not enforceable – or at least with regards to federal laws that affect the “public interest” such as the TILA. In Vermurlen v. Ameriquest Mortgage Company, No. 1:06-cv-828, 2007 the borrower entered into a forbearance agreement and Ameriquest included the following waiver:
“Effective upon the execution hereof, and notwithstanding any failure of Borrowers to satisfy any of the conditions precedent set forth above, Borrowers hereby agree that, without any further act, Lender is fully and forever released and discharged from any and all claims for damages or losses to Borrower’s property or person (whether these damages or losses are known or unknown, foreseen or unforeseen, or patent or latent) including, without limitation, tort claims, demands, actions and causes of action of any nature, whatsoever arising under or relating to the Loan Documents or any of the transactions related thereto, prior to the date hereof, …”
The court noted that “[i]n Brooklyn Savings Bank v. O’Neil, 324 U.S. 697 (1945), the Supreme Court addressed the question of waiver under the Fair Labor Standards Act. The Court held that “a statutory right conferred on a private party, but affecting the public interest, may not be waived or released if such waiver or release contravenes the statutory policy”…“The public benefits from enforcement of TILA because it creates a system of disclosure that improves the bargaining posture of all borrowers.” Therefore, such a waiver is unenforceable with regards to the TILA.
While the TILA rescission claim was dismissed for other reasons in Vermurlen; nevertheless, this is helpful case law for others who no doubt will find themselves once again battling against their lender after a completed loan modification down the road when a similar waiver was included.
This author is not an attorney and this information should not be considered legal advice. Please consult an attorney for legal advice.
December 9, 2008
I understand RESPA< Tila, etc. under each I can question my mortgage loan history via a Qualified Written Request, or that's what I thought. I got a loan in 1996, no problems until it was sold in 1999. Within 5 months, after making the $3,100.00/mo pymts. payments, my loan servicer filed a NOD for $46,000.00 and sold the loan.
Facing a sale date the new servicer offered a forbearance agreement and promised a "loan audit". I accepted and the audit never came. I did the QWR, etc. and paid $90,000.00 in 9 months, all the time asking about the "audit", each payment postponing the sale 30 days.
I finally protested and threatened suit. They re-noticed the sale and demanded $74,000.00.
I protested and the day before the sale, another Forbearance agreement in 2001 with another "audit" promise. Same thing all over. I paid,protested, QWR. etc.
I stopped paying and they re-noticed the sale. Again they offered a forbearance agreement in 2002, this time $552,700.00 in arrears. That was the original loan in 1996.
I crossed out the wrong amount and with the officers consent for an "audit" sent them $13,000.00 as a deposit for the "audit". They sold the loan.
New servicer, same stuff all again. I had the loan audited by a nationally know audit firm and I was way ahead. The new servicer wasn't impressed and filed another NOD.
I filed a lawsuit.
The suit came down to the 2 last agreements. Which one is enforceable? Was it the 2001 that was replaced by the 2002 that was confirmed by the former bank officer or the 2002 that had nothing in arrears and promised a Federal and State mandated debt verification audit?
Guess what, the Court ruled that a forbearance agreement is not enforceable unless signed by both parties. Based on that decision it could not be the unsigned 2002 agreement, even with the verification of the bank that drafted it, it had to be the 2001 unsigned agreement.
My question is, how can a Court enforce an unsigned agreement when they just declared that an agreement had to be signed to be enforceable? With that question, how can a State Court bar me from my Federal rights under RESPA, etc. via a QWR?
The other problem is since I am the first case in California of this type, what is going to happen to all of the borrowers that are getting these agreements and do not know they are unenforceable against the lender?
When the economy recovers the banks will come back and with my case, void all of the agreements and immediately claim all of the deferred or reduced payments.
October 28, 2008
I’m in forbearance and in an adjustable rate mortgage that will jump again to 10.125 in December? I would like my interst rate lowered, but can’t refinance. We can afford our home, but with the jump in interest and my husband being out of work for the past year because of his back we are in fear of losing our home.
October 12, 2008
My original mortgage company went belly up and my mortgage was sold to a servicing company.
I was working under a forbearance with my original mortgage company and now the servicing company is demanding I make full payment of the past due amount or foreclosure.
I employed New Hope Modification and they basically took my money and did nothing. I am now facing foreclosure.
My credit is not good, but I am now collecting a retirement check, plus I am self-employed and have doubled my income. Is there any company out there that can help me keep my home.
I have tried to find out if they do second mortgages in Texas to run along with the original mortgage, but I can’t get any help. I have read about all these new programs, but no one seems to be able to help me with any of it.
March 28, 2008
My husband and I just completed a refi on our home. We start payments in roughly 30 days. In the meantime my husband tested dirty on a drug screen from work twice. He will likely be losing his job, I can’t afford the payment now on only my income, he can’t get another job if he can’t pass a drug screen. Basically I’m looking at walking away. (there are other problems). That’s not my question, only the background.
What happens if we do not pay the mortgage? When the house forecloses is there any way that I won’t be dragged down into the muck because of his stupidity? Will the finance company come after me? Will the only take the house and sell it? Can I quit claim deed the house to him and absolve my liability?
January 10, 2008
We currently have a horrible adjustable arm mortgage we were about to refinance when yesterday my husband has been laid off from his job. Is ther any way to get the bank to lower the monthly payments (2,300)
January 2, 2008
Boston.com reports: “An estimated 2 million American homeowners face increased monthly mortgage payments this year. Many cannot afford the increased payment, or find buyers for their homes. They face foreclosure.”
BrokenCredit.com reports: The How To Avoid Foreclosure Free Online Seminar is now available.
December 19, 2007
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I am currently 45 days past due on my mortgage payment due to unemployment, my mortgage company sent me a demand letter, asking for the 2 payments otherwise it Could be sent to a outside agency for collection and or forclosure. I plan on sending a payment in to them on Fri.which will cover my nov. payment. i would only then be due for dec. any suggestions.
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