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Thursday, August 20, 2009

Loan Modifications...Just Window Dressing

I have long maintained that Loan Modifications offered by "the" banks are no more then 'window dressing'. Propaganda by our "too big to fail" financial institutions who have profited and continue to profit through foreclosures. They have no real interest - or intent - on helping the public out of the crisis they created.

There should be more main stream media coverage and exposure like the one in the

In a recent story published in, the "voice of the Mid-Columbia/kennewick, Pasco and Richland, Washington", they tell real stories of real people who have suffered this deceit. Herein lies the truth of loan modifications. Stories that are all to familiar.

Homeowners tell how banks failed to modify mortgages
by Kevin G. Hall.

Nearly three years into the deepest U.S. housing slump in generations, lenders are modifying only a small number of problem mortgages, and rising foreclosures are restraining the economy's recovery.

The administration thinks that about 2.7 million U.S. homeowners are at least two months behind on their mortgage payments, roughly equal to the population of Kansas. Yet only 9 percent of eligible borrowers had been offered trial loan modifications through June. (emphasis added)

Through emails and calls received by McClatchy's Washington Bureau and other interviews they evidently conducted there emerged a common theme;

Virtually all say they were encouraged, directly or indirectly, by their lenders to fall behind on their mortgage payments in order to qualify for loan modifications. Then the modifications never came.(emphasis added)

Editor's Note: When we speak of "the lenders" or "the bank" in reference to collections or loan modifications we are talking about the bank's servicing company. This requires an explanation as to who they really are.

A servicing company is a separate legal entitiy. A different corporation often containing the name of the bank that owns it as a wholly owned subsidiary. It is not the bank and does not act on behalf of "the" bank.

Is short, the servicing company is a collection agency under contract with the true owner of a mortgage note to collect the payments and keep an accounting. They then disburse the funds collected to those that own the actual mortgage. They DO NOT own any mortgages and most mortgages were sold by the original lender - "the" bank - to a securitization company - one of the Wall Street banks(ters) who in turn sold shares of a pool of mortgages to investors world wide.

Here are excerpts from the article which you can view in full by clicking here.
A work-from-home psychotherapist and Realtor, Helen Rudinsky, who's now 53, bought property in the nation's capital in June 2004.

A few years later, she gave birth to a boy who was diagnosed with autism. She's temporarily moved to Bend, Ore., seeking easier access to expensive testing and therapy for her child.

Rudinsky contacted Wells Fargo last October about mortgage options...
...She said that a Wells Fargo employee advised her that only loans that fell behind on payments were reviewed for modification.
Rudinsky had never missed a payment, had a credit score of 770...
...She took the employee's response as a suggestion to miss payments, and as a solution to her problem.

...Rudinsky called many times a week but got nowhere
..."Every time I call them, they either say they need more documents or that I am fine and I should hear from them,"
... "I've talked to over 50 Wells Fargo people around the country, and I am starting to wonder if I will ever get anywhere."

n May, she was told that she was approved for a program with interest payments potentially as low as 2 percent, she said. More documents, more back and forth, and Rudinsky said she was assured that things were on track and that the foreclosure process was on hold. To her shock, nearly 10 months after her initial call to Wells Fargo for help, her home suddenly headed for auction. Her frantic calls and e-mails were ignored.
To Read the Full Article and Horror here

When the economy soured late last year, she lost her job and couldn't pay her bills. She contacted her lender, IndyMac, and was told that she'd get no help until she fell four months behind on payments, she said.

"I needed the help then, not four months later," Steigner said. Nevertheless, she followed instructions, fell behind and still got no help, she said. Instead, she filed for personal bankruptcy. Once the courts completed her case early this year, her lender sought her out to discuss a modification again.

Steigner sent two months of payments in a bank-drafted certified check dated May 22. On June 8, it was returned with a letter that said the bank draft had to say "cashier's check."

Steigner had the check reissued as an official cashier's check and sent it back. It was returned to her again on June 25 with a letter that said that the loan modification campaign had expired.

Soon after, a note was posted on Steigner's front door that said that her home would go to auction

"They gave me the loan modification, and then they reneged on it, and now my house is going to auction.
To Read the Full Article and Horror here

Editor's Note: Ms. Steigner was originally dealing with Indymac bank that was seized by and taken over by the FDIC. The FDIC then assigned another bank to work on these deals - OneWest Bank.

OneWest Bank doesn't have its own spokesman; it hired the San Francisco-based public relations firm Sard Verbinnen for that.

Imagine, a bank that hires an independant spokesperson - not even a bank employee to speak for them.

Phil Stubblefield, 61, arrived in loan-modification hell quite by accident. His ex-wife died of heart failure April 20, and her Sacramento, Calif., home and Countrywide mortgage passed to their daughters,...

Stubblefield reached out in May to Bank of America, which had bought the disgraced Countrywide in January 2008, as it faced bankruptcy because of problems with its loan portfolio....

"Virtue was met with no help at all. The only recommendation was, 'We can help you when the loan goes into default,' " said Stubblefield,...
..."That's when I said, 'That's easy; then they'll talk to us.' "

What especially irks Stubblefield, who worked for eight years as a mortgage broker, are the comments from lenders that they're doing everything possible to keep people in their homes (emphasis added) and out of foreclosure.

"It comes off to me that it's just window dressing and speech that doesn't translate to anything," he said. "No action."
To Read the Full Article and Horror here

Frank X owns the "worst house in a nice neighborhood" in a New York suburb. He and his wife are Wall Street veterans, and they shared their plight only on the condition that their surname be withheld in order to protect their privacy. His wife didn't want her first name used, either.

Three years ago they had a son, and his wife went on maternity leave. She later returned to work part time just as the bottom started falling out of the financial sector. Her hours were slashed. Frank, a financial consultant who works from home, also saw his income drop with the slump, and he feared that his wife might get laid off.

Late last year, they contacted Wachovia, a national bank based in Charlotte, N.C., that Wells Fargo purchased around that time, to see what could be done in case of a layoff.

A bank representative, Frank said, suggested that they miss a couple of payments in order to qualify for loan modification...
...they found the suggestion unattractive.

However, they'd lost more than half their income, lacked enough equity in the home to refinance...
...The couple took a leap of faith and stopped paying; they haven't stopped falling yet.

In late July, Frank was promised that a new program would be out in days. Then it was to be August; now, maybe September. His wife asked the mortgage servicer to stop calling her office because she lacks privacy to discuss the matter, yet threatening calls keep coming to her there several times a week.(Editor's Note: This is illegal)

"I've been promised and promised and promised. I've robbed Peter to pay Paul, and we're still in this situation," Frank said. "If what their own representative told me (last year) was true, they would have already done something for me."
To Read the Full Article and Horror here

Wells Fargo, Bank of America, Indymac, Wachovia and even the FDIC along with all the other banks(ters) all seem to operate with absolutely no concern for the people or their customers or the nation for that matter. To think that they are the ones who created this crisis in the first place making billions of dollars in the process and have devised another even more predatory plan to make even more billions is unconscionable.

Lying, cheating and stealing is their mode of operation. Making matters worse they actually teach their employees how to lie, cheat and steal.

Many of these employees are new to the workplace and young. Is this the type of training we want our future bankers and business people to learn?

We are speaking of institutions that were once revered in the community, whose employees had integrity and institutions we trusted with our money. Now they have become the enemy employing tactics which are deceitful laced with greed. No concern for our nation, its' people or the economy.

They are continuing the rape and pillage of the American people, in fact, using the money - our money - given them by our government to do so. Is this ironic or what? Our money being used to take even more of our money from us.

Where are the people we elected to oversee and regulate them? Is it not the purpose of our Congress and our Administration to protect the people? Am I missing something here?

Are these financial giants, these "too big to fail" organizations planning a quiet coup to take over this country or have they already done so? In the words of Meyer Rothschild - the creator of the Central Banking System we call the Federal Reserve - "let me control the money of a nation and I care not who makes its' laws". He said this in the late 1700's when he originated the first Central Bank in England - which his family still controls. Is there a plan being executed here?

The only way I see to right the wrongs that are upon us is to fight back. We need to fight back against these banks, become more vocal with stories such as the one referenced here.

Fight your foreclosoure. They are illegal. The banks(ters) are scamming us, stealing our wealth and taking control of our property. If they win we all lose.
Revolutionary? Perhaps but a peaceful one not against our government but a patriotic one against those private corporate intitutions who would - are - ruining this great nation of ours. Let your elected officials - local, state and federal - know you know what is happening. Ask them to do their jobs and protect the people.

Fight Back...Be Vocal
If you are in foreclosure, your defending it on sound legal grounds will help right these wrongs and help bring this nation and the economy back on course.


  1. I enjoy your articles, Larry. I wish the forum were more active, you bring up some really interesting stuff.

  2. Thank you for your comment Dawn. Perhaps my views and opinions don't contain enough gossip for people to get involved in.

    From the beginning my effort was to expose the truth and make people aware of what is happening here. Maybe more of a "bashing" blog would create more dialogue. But "bashing" is not what this is about.

    You can help and perhaps pass this blog along to others and encourage them to participate. I would like nothing more then to gat a good dialogue going.