With so many states strapped for cash the settlement will no doubt be a welcomed pay day. Similarly with the election year ahead the incumbent wants signs the economy is recovering well before November rolls around. External pressure aside the American people are ready to move on with their lives and get back to work.  It is unclear how resolving claims against the big banks will allow this to happen, but the link between the two is front and center in the media.

What the economy needs to move forward is trust and how the settlement will begin to rebuild the people’s trust in our economic system again is unclear.  While resolving disputes without litigation is beneficial I can’t help but think there is an opportunity in the settlement being overlooked.

Sponsored by HUD, the Making Home Affordable Program, HOPE NOW and NeighborWorks America, admission is free.

You can either bring documents showing your household income and expenses such as your last two paychecks; information about each of your mortgages including lines of credit; statements for each of your other debts; and bank account statements, or, you can access and complete the Request for Modification form found at MakingHomeAffordable.gov.

There are helpful videos at www.youtube.com/user/MakingHomeAffordable.

You can also call 1 888 995- 4673 for more information.

The application for a review is available online at www. smcare.org.  Or call the assessor’s office at 650 363 4500.

There is no charge for the review.  But the deadline is Tuesday, February 15th.

“Foreclosure Mediation Programs: Can Bankruptcy Courts Limit Homeowner and Investor Losses?”

Senate Judiciary Committee – Full Committee

http://judiciary.senate.gov/hearings/hearing.cfm?id=4960

DATE:February 1, 2011
TIME:10:00 AM
ROOM:Dirksen-226

OFFICIAL HEARING NOTICE / WITNESS LIST:
January 25, 2011

NOTICE OF COMMITTEE HEARING

The Senate Committee on the Judiciary has scheduled a hearing entitled “Foreclosure Mediation Programs: Can Bankruptcy Courts Limit Homeowner and Investor Losses?” for Tuesday, February 1, 2011 at 10:00 a.m. in Room 226 of the Dirksen Senate Office Building.

Senator Whitehouse to preside.
By order of the Chairman.
Witness List
Hearing before the Senate Committee on the Judiciary On
“Foreclosure Mediation Programs: Can Bankruptcy Courts Limit Homeowner and Investor Losses?”
Tuesday, February 1, 2011 – 10:00 a.m.
Dirksen Senate Office Building, Room 226

The Honorable Robert Drain
United States Bankruptcy Judge
Southern District of New York

John Rao, Attorney
National Consumer Law Center
Boston, MA

Larry Britt, Homeowner
Riverside, RI

Dr. Anthony B. Sanders
Professor and Senior Scholar
The Mercatus Center, George Mason University
Fairfax, VA

Andrew M. Grossman
Visiting Legal Fellow
The Heritage Foundation
Washington, DC

The only genuine accomplishment  of HAMP is the reminder that only 31% of  gross household income should be spent on housing.  In every other way, the program has been too little and what it provides is too often illusory.

Certainly here in California, we absolutely lost track of that budgetary rule of thumb.  Housing costs often soared above 50% of income.  We rationalized that the house was an investment, that California real estate always goes up, and our home was our retirement plan.  All of those rationalizations have soured.

The HAMP target for loan modification is a monthly payment, including property taxes, of 31% of the household’s gross income.  Applied to many of my clients, after deducting California property taxes, the resulting mortgage payment is often half of the  contractual payment.   It often seems that  it is that very disparity between contract and budget target that dooms the modification.

But I think the HAMP exercise is the first time too many homeowners have encountered the idea that housing expense should not overwhelm all other necessary expenses.  Further, that first of all, the mortgage payment is buying housing, not a piece of the Golden State, or arrival in the middle class, or any other abstract value.  It’s a roof over your head, first and foremost.

Have a story tip about foreclosures?

Are you a homeowner who got foreclosed upon AFTER participating in a trial/temporary modification? Are you a current or former loan servicer with inside knowledge of why so many homeowners are being denied modifications and getting foreclosed upon? If so, we want to hear from you.

Please contact NBCNewsInvestigates@nbcuni.com or click on the link below.

Substantive information only; no opinions please.

All you need to do is take one look at a voluminous pooling and servicing agreement on the Security and Exchange Commission’s website to see just how much legalese was used to cover their proverbial back sides.  I took a look at one for a client just the other day and it was over 700 pages long.

One of my favorite pieces to this puzzle is looking at the power point presentation given to the SEC by the Mortgage Bankers Association in 2004.  Take a look at pages 11 and 12 detailing the problems the Mortgage Bankers Association saw and their proposed changes to solve the problems.

Big banks have done such a good job driving up dividends to shareholders by taking control of the market and finding every opportunity for arbitrage that it will take at least a century for the American people to regain any amount of faith in the system.  When debtors and creditors alike are up in arms wondering what has gone wrong, someone or some thing really pulled a fast one on us all.

As consumers try to negotiate this mess, they will believe nothing they are told and resort to good old fashioned sayings I remember my grandfather uttering  like “I don’t trust him as far as I can throw him.”

Of course the courtroom is open to bring these folks to justice one at a time.  But justice is expensive and often as economically wasteful as the tactics used to create the claims.  The bankruptcy court would be as good a venue as any to deal with these issues in turn, providing for a compromise and valuing a homeowner’s property at the market value.  It may not be a complete solution but it sure would get people focusing on what is important again right quick.  And that, my fellow Americans, would buy us all more than any $600 billion bail out ever did.

“We don’t believe the procedural errors in these affidavits led to inappropriate foreclosures,” Gina Proia, a spokeswoman for Ally, says. “We believe the accuracy of the factual loan information contained in the affidavits was not affected by whether or not the signer had personal knowledge of the precise details,” JPMorgan says in a statement.  quoted on MSNBC

Whoa!  I’m interested in the integrity of the process.  Isn’t that the essence of the 5th Amendment to our constitution?   No property shall be taken without due process.

It’s a step down a slippery slope to say, yeah, we swore falsely to facilitate foreclosing on this house but it doesn’t matter.  To whom doesn’t it matter?   And that assumes that the lender’s underlying proposition is correct, that despite not having the note, or verifying what the internal processes report, we are entitled to take your house.

In my bankruptcy practice, I see the junior version of the robo-signing phenomenon, where sworn declarations are filed with the court seeking relief from the automatic stay.  It is clear to me that the person signing them has no personal knowledge of the facts in the declaration:  not only no personal knowledge, but not even a once over familiarity with what’s being signed.  More importantly, a fair number of these sworn declarations are wrong about the payments made, or not made, on the mortgage.

Which brings me to The Big Picture which is soliciting examples of foreclosure errors:

• wrong house,
• wrong loan,
• wrong bank, or
• wrong person.

If you have a personal story to contribute, let’s get it out there and debunk the idea that accuracy and process aren’t important.

With uncertainty in title to real property, the market for foreclosed properties is sure to dive deeper before anything that even looks like a recovery comes into sight.

With all that has transpired over the past couple of years I am beginning to think that the corporations and leaders of our country have all but forgotten about the value of a job well done.  Somewhere along the line we traded quality for lower cost and simply lost sight of what is important.

Years before the Constitution was written our founding fathers put in place a system to track the ownership of property.  With the creation of MERS, finding out who has a secured interest in real property has become difficult, to say the least.

When title insurers refuse to stand behind title to property,  it is time to get back to basics to instill confidence in a system that is no longer working for the very people who need it most.

Growing up I was taught to leave things better than I found them and put a little bit of me into everything I do.  In doing so, I was taught that we live on, not in words, but in our deeds.  Without reliability in what we do, who among us will believe a word we have to say and how long will it take to re-build the reputation of a system that is vital to our society?

You can use NACBA’s toll free phone number to find your Congressman and be automatically connected with the office.

Here’s how:

1. Phone toll free at: 877.354.4958

2. Put in your zip code

3. When you reach the receptionist:

• State your name
• Say that you are a constituent
• Ask the Representative to vote FOR the Conyers-Turner-Lofgren amendment (#201) to the Financial Services Reform bill.
• This amendment will cost taxpayers NOTHING and will save millions of homes from foreclosure

We need an alternative to the farsical voluntary mortgage modification programs.  Speak up, today, for a meaningful alternative.