Why would lenders modify your loan?

Incentives. According to USA Today, the plan also includes incentives to encourage mortgage servicers ? who collect fees for refinanced and delinquent mortgages ? to work with qualified borrowers to modify loans. Servicers will get $1,000 for each eligible modification they make, and another $1,000 a year for three years as long as the homeowner remains current on payments. Homeowners who stay in their properties and are current will get a monthly balance reduction to help reduce their loan principal. That will amount to up to $1,000 a year for five years.

Also, banks would rather have you stay in your home ? even if they?re not making the full amount they signed up for ? rather than have the house go to foreclosure. They stand to lose more if you foreclosure than if your loan is modified.

27 thoughts on “Why would lenders modify your loan?

  1. I am current on my loan, my credit score is in the upper 700′s, my mortgage is 298% underwater. I qualify for the new underwater/reduce principle program that was introduced on September 7, 2010 pending Chase’s participation in the program. After calling Chase Mortgage for a week, I was informed today that Chase is declining to participate. Why would they? Would they rather have homes on default when home owners walk away from them, then keep honest hardworking home owners in the home? The new program seems like a no brainer, I just don’t understand the reasoning for NOT participating.

    • Because they get six grand $6,000 to foreclose, and they get your house for free! Sweet deal, eh?

      Here’s what the banks got: At the closing table, they got you to sign a Note and give them a Security interest in your home. They represented themselves to be your “lender” so you thought they actually loaned you some cash money. Nope, they didn’t.
      What they did was, endorse and deposit your Note (which is a negotiable instrument) and with that deposit created an asset on their balance sheet, along with a demand account or a liability on their balance sheet in an equal amount. So who is the borrower? Chase is. They didn’t invest a single penny of theirs in your home, just a credit on a bookkeeping ledger. They then used a check drawn on that account they created and didn’t tell you about to pay the previous owner of your home off. Now over the course of the years that you pay on the “loan” you are giving them three times the amount you “borrowed” in your interest payments. So…they get to steal your house when you refuse to pay anymore, even though they didn’t invest a penny in it. Sound ridiculous? Can’t be true, you say? Read A History of Money and Banking by Murray N Rothbard, The Trillion Dollar Conspiracy, by Jim Mars or the sworn affidavit of Walker F. Todd in BankOne, NA vs. Harshavardhan and Pratima Dave.
      Banks create money out of thin air and let you labor for 30 years to pay back what they didn’t lend you, and if you stop paying they steal your home, even though they don’t have a vested financial interest in it. This is the most unbelievable heist and ponzi I’ve ever heard of and it’s all true. Read the Federal Reserve’s own report if you don’t believe me.

      • nora, i read one of your other posts about chase selling 99% of their notes….how do i find out who owns mine? i have been fighting chase going on 3 years this month & cannot do it anymore, i’m out of options.

  2. My current attorney says to proceed with a mod only as a stall tactic prior to foreclosure. He says lenders, especially Chase Home Mortgage, only go through the process to satisfy the govt., the end result is usually no modification.

    Here’s my experience w/Chase: bit.ly/bStNMk

    //dc

  3. I completed a modification that made my mortgage worse. I was rudely told, if you dont like it, too bad, what else can you do. (Im not kidding). They sent me another request for paperwork for another modification before I even made my first payment. They took a decent mortgage and turned it into a balloon mortgage. Ever since October, they havent wanted a payment from me because I am in “modification”. But then again, the other half of the people tell me Im not in modification. I ask them why they asked me for more paperwork, they tell me it was a mass generated mailing. I ask then, why I was told I was in modification, they ask for proof of who told me that. That is when I get my handy dandy Chase Home Finance Sucks notebook out and tell them the exact date, time, phone number and persons name that I spoke to. Their only answer then is that they dont know why someone told me that and that they will escalate it and get back to me. They never get back to me.

  4. I am just starting what I am afraid will be a long horrible process with Chase Mortgage. I have been making my payments on my mortgage ….at times past the due date, but each time with the penalty fee – in December I received a letter indicating that I was in foreclosure because I was 4 months behind on my mortgage- this is not true. I called Chase and they offered a modification and explained the process that was very confusing – I went on line and looked at the check list of requirements- i am tempted to follow though with this, but have big concerns- I wonder where the money I sent in went…and why I think I am up to date on my mortgage and Chase thinks I am 4 months behind. i have the bank records documenting when my payments were made- Chase told me my latest payment would be returned to me until this was sorted out- after reading a number of horror stories, I am freaking out…and don’t know what to do.

    • My wife and I have been in a very much similar situation as you. We started with a local bank in-turn, our mortgage was sold to WaMu. When Washington Mutual went under it appears JPMorgan Chase currently has our mortgage. But, WaMu lost 2x of our payments. Which was 2 months of payments WAMU lost. We immediately filed Bankruptcy, Chapter 13 which meant we had to pay more just to keep our house plus pay the Trustee. We completed bankruptcy on Jan.2011 and filed for Loan Modification. But, we pay them with WESTERN UNION “Quick Send” form. Any amount of money we WIRE is not returned, thus, they can’t say we didn’t pay them. We often DO NOT HAVE the FULL AMOUNT, so we wire A LARGE MAJORITY of the monthly payment and send the rest later, via WESTERN UNION.

      Just a quick note, try wiring your money Western Union using Quick Send form.
      by; Brother Darryl in NC

  5. This is totally bogus! There are incentives for lenders to foreclose. You obviously don’t understand what’s going on.
    Here’s a breaddown: Your “lender” is not your Lender. Your loan was converted to stock and sold to suckers as Mortgage Backed Securities. Your lender CAN’T modify your loan, because they no longer own your note. The notes were transfered to a depositor and then to a trust. From that point forward they forever lost control of the asset, since it was transfered, “without recourse”. Says so right in the PSA and the Prospectus. (find these at sec.gov)

    Your “lender” wants you to believe they can enter into a modificatio with you, but they legally can’t.
    When the loan has been in default for 90 days, your “lender” gets to make a claim against insurance they took out on your loan, for 30 times the face value. The investors get paid off, at that point…you no longer owe ANYBODY. Not a soul in the world can bring a legal foreclosure action against you, but the banks will stop at nothing to prevent you from knowing about it. They falsify documents, forge signatures, and reverse engineer Chains of Title. Until the courts understand it all, they will continue to allow these thieves to foreclose on you. Your assignment, should you choose to accept it….get the evidence. File a civil action. Win your house back free and clear, or keep them from stealing it in the first place!
    good luck, Mr. Phelps.

  6. I’m curious – has anyone rec’d the unemployment forbearance program from Chase? We were just approved for it and then my husband went back to work. In theory we are now eligible for a loan mod not the EDD forbearance. After reading all about the people not getting loan mods I’m tempted to not say anything about him going back to work and taking advantage of the unemployment package for as long as I can – what can they do to me, take my house? Any thoughts? I just want to keep our home……..

  7. I would not say a word to Chase about this. They will screw up all the paperwork and you will have to start over. NOBODY CAN LIVE THREW THAT!

  8. Well, there’s a bombshell article on Neil Garfield’s Livinglies weblog concerning American Home Mortgage Servicing (AHMS) and Lender Processing Services that you need to read.!!!!

    All “loans” were funded by undisclosed third parties before closing through standing agreements. Investors money funded our “loans” in exchange for a bond and a percentage interest, and the “loans” were pre-sold to investors before the documents were signed at closing. They generated documents “as necessary” to facilitate foreclosure actions, there were no legitimate assignments or transfers!

    If this can be proven with documentation, we have the one defense that can never be challenged in court…non-perfected liens. They are all defective and void ab initio. (from the beginning) That means that “loans” were originated in fraud since they failed to disclose that the funding came from a party other than the one named in the contract, and your “lender” was simply a crooked broker. I believe this has real potential to break the foreclosure machine.

    Any contract initiated in fraud is null and void. Most likely, every one who has been foreclosed on owns their home in fee simple. In fact, the banks made so much money off of your loan through insurance, credit default swaps, bail-out money and default servicing fees, they have been more than paid in full. If the money that was hidden from you was applied to your “loan” balance, they’d owe YOU money, not the other way round. Go to livinglies and read, Bombshell Admission of Failed Securitization Process in AHMS…

  9. There are new developments! After reading a half dozen books on money and how its created, I am convinced that “securitization” was only a firewall to keep the “borrowers” separated from the MBS investors.

    The banks never transfering the Notes was not because they were “lost”. The banks did take money from investors in advance of the loans closing, but that money was used to pay investors who’d already bought into the ponzi scheme! The banks didn’t use the investor’s money to fund the loans…they used the borrower’s Note to fund the loan, and because they didn’t lend you one penny of their money, your contract is VOID, the security interest is unenforceable and you own your home by default. No one else can make a claim!!!
    The whole concept was TAX EVASION, and they are about to get what they deserve; long jail sentences. They claimed they were insolvent so the taxpayers would bail them out: that was a lie! They collected on all those insurance policies, both private mortgage and pool ins. They got all the principle & interest payments, cross collateralization proceeds, TARP funds, FDIC reimbursements…I mean they really planned this thing. It’s unbelievable how much they profited off of each “loan” they didn’t make. And now they are trying to steal with impunity, all the homes they don’t own. (wow.) Fight them! Don’t give them any more free houses!

  10. I lives in Florida and my loan is 332% under the water. I filled paperwork for MOD, and they keep losing my documents. I sent them certified letters, they came back to me. I called 888-708-4434 and the lady Katie, after a heated conversations, she told me if I can’t take it like a man, then leave the house” I left numerious messages for Brian Sission, Peter Dallinger and no one returned the call. I am current with the mortgage but I don’t have a job since August. I don’t know what am I going to do after I finish the $3000 from the saving account. I am going to take sell pieces of the drywall until I can stay in the house. I have this house for the past 6 years.

  11. Er…did you read any of the posts here?
    You must not have, or you’d realize you aren’t going to get a “loan” modification from Chase!~ It’s pure profit for them if they foreclose, cause they didn’t lend you any money. The article at the top is totally wrong where it says it is better for them if you stay in your home…they want to kick you out into the street! They get a lot more money and they get it immediately if they foreclose; there’s little profit in mods.
    They will continue to take your money, and they’ll continue to lose your paperwork. What you need to do is STOP PAYING THEM. Demand that they produce the Note you signed at closing, and an accounting history for your loan. Notify their registered agent for your state, not someone at the bank who will deny service.

    You can find their registered agent by searching the .gov website for your state. If they do business in your state (they do) they have to employ a registered agent.

    Stay in your house. Don’t let them steal it, because they don’t have a penny of their money invested in your house. Read up on their crimes and stop dumping your money down a rabbit hole. Save the money you have left for an attorney’s retainer and SUE THEM. Find a litigator or a contract specialist, don’t bother trying to find a real estate attorney. Florida has a few good foreclosure attorneys, but they are not cheap. The banks are committing fraud on the court by foreclosing on properties they don’t hold legal title to, and it is your duty to stop them! Look for information–there’s tons of it. Start with the affidavit of Walker F Todd, a veteran of the banking industry who testified that the banks didn’t lend any real money, they lent credit. (but you paid them over the years in REAL money) here’s the link:
    http://www.fourwinds10.net/resources/uploads/pdf/Walker%20Todd%20Affidavit%20complete%20signed%20copy%20with%20Decision.pdf

  12. Very interesting what has been said in this blog. I only have a question: At the time of the closing the bank paid to the seller (builder or developer) with real money. Was this bank money? If so, the bank holds the legal title? Who holds the legal title?

  13. Caro,
    At closing, where you were led to believe you were a borrower for a mortgage, the bank hid from you the true facts; you generated a Note that was pre-sold to investors as Mortgage Backed Securities if your loan was closed from around 2000 to 2008, give or take. Since under these circumstances (fraudulent inducement) you were not told about the true nature of the transaction, the security interest (Deed of Trust or Security Deed) is unenforceable because the Note and Deed were separated. This is called Bifurcation. With a non-perfected lien on your property, the bank has no claim that will stand up in court. The bank didn’t lend any “real money”, just used your credit file and Note to make money off of you in the
    fractional reserve banking system.
    Investors, who were paid undisclosed amounts, not only from the payment stream from your loan (while you make payments) but from insurance proceeds, TARP money, credit default swaps, hedge funds, multi-level broker yield spread premiums, FDIC reimbursement, were paid off according to the terms of their certificates. They have no real monetary loss, and therefore no real claim against your property.
    So lets see…the bank has no legitimate claim because they misled you and defrauded you, and didn’t lend any real money. The investors who were paid out of the ponzi scheme have no legitimate claim. You on the other hand, have possession of the property and real money tied up in it, both through your payments, taxes and insurance, down payment, etc. So it looks like you are the only one with a real investment, risk of monetary loss or a vested interest, so I believe you HOLD LEGAL TITLE. The banks by law cannot lend depositor’s money, and they lent you their credit, which is illegal. You have a defendable title.

  14. Nora,
    I am a bit confused? I am in default on a mortgage that is upside down and Chase says I am in active foreclosure but I have yet to receive any documentation. Secondly, it has been 18 months yet nobody knows why or when they are going to finalize this. In the mean time, I keep wondering if my house falls in this category you speak of. I refinanced to get a fixed interest rate thru Countrywide who is out of biz. How do I know if my home is wrapped up in one of these securities, what do I need to do to find out and then what do I do about it?

    • You should receive a Notice of Default. It will include thousands of dollars in fees and charges, for which they provide no explanation.

      If you closed between 1999 and 2007, it was most likely one of the “securitized” loans. Securitization never really happened, though. It was a smokescreen to hide their fraud. Investors put up pools of money, which the banks were supposed to use to fund loans. Instead of funding the loans, the banks skimmed billions of the money, and passed all the tax liability on to the investors.

      You can stop Chase from foreclosing. Use the Administrative Default Process, file Chapter 13 Bankrupcy, or just sue them in Superior Court. Once you receive the Notice of Default, you decide how to proceed. No one can say how long it will be, and you should remember that you are dealing with liars and thieves when you have any dealing s with Chase.

  15. These comments are overgeneralized. I have clients who have gotten permanent loan mods with Chase, even with principal reduction. But the process requires extreme persistence, up to three years.

    Best chance for mod is if servicer actually owns loan. Not all loans were securitized. But even if securitized, mods are still possible.

    Don’t believe anyone who says you are going to get a house free of the lien. I know of only one case where that happened, and that borrower had equity. Many people grab onto preliminary, procedural rulings in cases as if the cases were final. Appellate cases have been mostly against the borrowers. Even where borrowers “win”, it often just means that the servicer must go back and correct the paperwork.

    • We can dream of this happening. Like most of us dream that Chase will help us. Even after the O.C.C filed against Chase with a slap on the back. It will still take over three years to even hope to get a modification. How do we make this a faster process so more people can save their homes? We know now that Government will not help us. I filed with the O.C.C and other Government agency’s. Yes I was one of the lucky ones, but I also had fraud on my side. Just wish one Attorney would stand up to them, maybe one in Windsor! :).

  16. Paul W:
    You obviously didn’t read all the posts on this site from anxiety ridden “borrowers” who after years of trying are closer to being thrown in the street, than they are to a modification.
    They are agry at the affrontery and arrogance Chase displays…heartlessness and greed that motivates them to disparage and denigrate those “borrowers” as if they had perpetrated a huge fraud against the bank, instead of the other way around.

    With a criminal history like Chase has–everything from being instrumental in the murder of the bolshieveks–to bribing government officials, laundering money for drug cartels, and wiring money to enemies with weapons of mass destruction–it is painfully apparent just what sort of evil we’re dealing with.

    Overgeneralized? I think we can generally make the statement that Chase bank is run by criminals. They took money from the government on the condition that they would modify loans and help troubled “borrowers”. They did so poorly, and failed to modify so few loans, that the government witheld payment from them and sanctioned them for poor performance, when they failed to meet even the minimum standards of the Hamp program and Making Homes Affordable.

    You will need to prove to us that there are any cases where loans were modified and Chase didn’t later come back and yank it off the table without explanation.
    You will need to show figures that substantiate what you claim. We can list way more cases than will fit in this post, where Chase lost in court, demanded that the cases be sealed to prevent the general public from knowing the true nature of the banking system in this country, and the outrageous lengths Chase will go to in order to steal homes.
    We take umbrage at your statement that we want a free home. We wouldn’t have tried so hard to get a mod if that baloney was true. Many people re-submitted their documents as many as SEVEN TIMES. Chase is stealing homes with impunity thanks to a corrupt government, corrupt legal system, and a bought and paid for congress. That’s who wants a free house, that they have nothing invested in!

    Which branch of Chase do you work for, Paul W? Admin, please post his IP address; betcha Paul W is employed to spew propaganda for Chase.

  17. lori,
    If you have time to invest, you may be able to search SEC records online and find information about your loan. You can also use the Fannie Mae and Freddie Mac loan lookup tool to see if they claim ownership of your loan. But the best way to confirm that it’s been sold is to consult the mandatory notices of change in servicer you may have received. Even if you didn’t receive any notices, that’s still no proof they own your loan.
    The fact is, you don’t want to prove that your loan was securitized…you want to prove that your lien was never perfected. You know if you’ve read my other posts that securitization was a scam. None of the stuff they led us to believe actually happened. It was all smoke and mirrors to hide massive fraud. You didn’t get a “loan” either. In reality, you supplied a Note to a middleman who had no financial interest in the transaction other than to earn a fee for brokering the deal. Because the Note and Deed of Trust (or mortgage or Security Deed, depending on what state you live in,) were separated, they can never fix it, or legally foreclose on you. These two items that prove an obligation that arises out of operation of law must stay together for either to be enforceable, and they became misaligned when you closed and the Note was sold forward to populate pools of loans. That left the lien null and void, under the statutes. Here’s a link to an article that will explain in detail how and why you want to prove the lien was never perfected:

    http://livinglies.wordpress.com/2011/08/22/how-do-i-prove-my-loan-was-securitized/

    If you want to stop fighting them, and get on with your life then just sue them in a Court of law. The recent settlement did not allow them to deny wrongdoing anymore, and it gave private law suits some legitimacy whereas in the past it was a coin toss. If you present your case correctly, and ask for money damages, Chase will likely settle, abandon their claim or dismiss. You can then file a Quiet Title action and they are history, as far as trying to collect on the debt.
    If your resources are limited and an attorney is out of the question, buy yourself a copy of Jurisdictionary and study it until you understand how to win, then sue pro se. If you have 401K money or some liquidity, hire an attorney from the list on Neil Garfield’s site or get a personal referral to one who will fight for his clients. You will prevail if you present your case correctly, I believe, since they can’t repair the facts: they defrauded you. In all of the cases I have personal experience with, they were forced to dismiss do to lack of standing or they dismissed because they were challenged in Court and the property wasn’t worth the money it would cost them in litigation to steal it. Point here: Challenge their claim!

  18. Is there a way to get my property back after bankruptcy?, it’s been in foreclosure for years, i bought it in 2007 and soon after lost my job and my savings and was force to move away, so the property has been vacant for the past 4 years and the bank haven’t sold it yet,i included the property in the bankruptcy.