If only every state regulated lenders like New York; If only every lender did a better job than Ocwen

The  New York’s Department of Financial Services announced this week that Ocwen Financial was guilty of various regular practices of  non-compliance with recent servicing reforms required of all lenders.   Ocwen apparently initiated way too many “hair trigger” foreclosures even while customers were seeking modifications or permission for short sales.   In the news release from the NY Dept of Financial Services, the Superintendent also said that “Ocwen sometimes failed to provide a single point of contact for borrowers, pursued foreclosure actions on borrowers seeking loan modifications, failed to conduct an independent review of loan mod denials, and failed to ensure that borrower and loan information was accurate and up to date.”  In Ocwen’s defense, they were one of the first lenders to voluntarily submit to the delinquent loan guidelines implemented in New York.   But they allegedly had no comment on the charges of the NYDFS when inquiry was made.

Managing the volume or non-performing loans or under-performing loans is no easy task.  Bank of America is reported to have 42,000 employees in its loan resolution department and that lender still manages to stay at the top of most lists for customer adverse practices.   Clearly Ocwen is not alone with the problem of too many points of contact and the right and left hands not communicating as between mortgage work-out departments and mortgage foreclosure departments.   New York’s consumer oriented lender regulation can add expense to the cost of real estate borrowing in that state, but for those homeowners in other states facing foreclosure, they might well wish they had the protections that New York state residents have.

Wishing won’t take the place of letting your state legislators know what abuses you may have suffered on your home mortgage.   Nor will even great state protections like those in New York take the place of having a trained, experienced legal advocate in your corner.    The consequences of being steam rolled by your lender’s foreclosure department can last the rest of your life!

One important “take-away point” for today is that if  you need help working out a mortgage with your lender that no longer workable, don’t settle for the first “SSN” (short sale negotiator) that you meet or that your realtor may refer you to.   You have the right to interview as many SSNs as you need to interview in order to be comfortable entrusting them with your financial future.

Anyone can claim the title of an SSN and there are no legitimate or significant qualification programs or governmental accountability mechanisms to protect consumers from unqualified or dishonest SSNs.   California may be the exception in this regard.  If you don’t think the choice of a good SSN is a serious choice, run a search on SSN abuses in California!  They do have more than their share of distressed real estate there but they also have a very active consumer protection and state enforcement level.

Among SSNs you will have the option to hire, many listing agents offer the service as part of their overall package.  If you choose this sort of arrangement, make sure your Listing Agent is either:   (1) independently wealthy;   or (2)   part of a team so that their marketing and other traditional realtor activities on your behalf are not neglected while they spend hours on the phone with your lender.  Realtors can also acquire differing sets of letters  to add after their other realtor designations that purport to make them experts SSNs, but most of these designations can be acquired with a weekend course that arms the agents with a set of forms and “one size fits all” approach to negotiating terms of short sales and deficiencies.   Even conscientious agents or “lay SSNs” who study the process and try to stay current  on the ever changing trends cannot take the place of a lawfirm that understands the many areas of the law that can come into play when mortgage default occurs.   While not every loan workout solution requires it, your best counsel will come from a team with an understanding  not only of short sales, but also of modifications, collections and the FDCPA, bankruptcy, filing for emergency injunctions, and many other areas of the law.  The shocking fact is that there is very little difference between the fees of inexperienced lay SSNs and lawyers who handle lender negotiations as part of a holistic approach to using the law to protect the consumer within the bigger picture of life.

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