IS HAMP A TRAP?

by Wes Barnard

HAMP to me is a trap. The banks actually cannot prove that you owe them anything since they have lost the documents and are now busy forging new ones.

HAMP is just another refinance gimmick to establish once again that you owe the banks mortgage payments. If you push the banks for validation of the debt and they are unable to do so, that approach seems brighter than pushing the banks to refinance the debt.

How about you?

EDITOR’S COMMENT: I AGREE WITH WES. Some Judges are using HAMP to buy more time before they have to rule on facts and law that are unfamiliar to them, so they force people into modification the way they do with mediation. Judges like that because a good percentage of the time a forced mediation results in a settlement. But with HAMP it is different. As Judge Baum in Phoenix has said on record, HAMP approvals seem to be haphazard.

The essential point Wes is making is that by merely entering into the process without objection you might be admitting the status of the party as a lender, holder of the note or someone with authority to foreclose. Thus you might be waiving your essential defenses, and forced to wait until the property goes to auction before you can raise wrongful foreclosure etc.

The real problem is that you can’t settle with someone who doesn’t have a claim against you. To the Judge that sounds like gibberish. So you have to be clear that they are not saying there isn’t some claim here, although you can’t determine the value of it, you are just saying that if you are going to spend your time going through HAMP, the party with whom you are being ordered to engage must be the decider.

The essential question is “DOES THIS PARTY HAVE THE AUTHORITY TO EXECUTE AND RECORD A SATISFACTION OF MORTGAGE AND RETURN THE NOTE AS PAID?”

If the answer is yes, then you have the right party to settle or modify the mortgage. If the answer is no, you already know that they are going to tell you at the end of the deal that you didn’t qualify. That makes it look like there is something wrong with the homeowner when the real fact is that the party communicating the rejection of HAMP modification or settlement didn’t have the authority to do anything anyway.

The proof of the pudding is what most of the Judges are coming to realize — nearly all modifications are rejected. They accept a handful to make it look like they have the authority and they do whatever they need to do behind the scenes to make it look real. But when all is said and done, even if with a principal reduction or principal correction, if the parties do not have a court order declaring the status of the chain of title, the modification or settlement is going to cause title problem down the road when the homeowner goes to sell or refinance the property.

If they encounter problems and they don’t have title insurance that covers this situation they are going to come back looking for the lawyer they were once so happy with and ask him or her to fix it — but they can’t fix it without a Judge signing an order that is a declaration of the rights of parties and the status of the title, and a certified copy of the Final Order is then recorded in county property recording office.

The moral of the story is that you can’t finesse title. You either have it or you don’t. But you can finesse people and Judges are people too.

Tags: HAMP, modifications
Posted in bubble, Corruption, Eviction, securities fraud |