It's time that you get the straight scoop on loan modification and why sometimes, you get an answer and sometimes you get no answer. In a recent article, the Bank of America was sued by some of the certificate holders of mortgage notes. In one of my earlier articles I described how certificate holders invest into ABS (Asset Based Trusts) and simply look for a return on their investment.
Your mortgage note which is securitized or purchased by many different investors means that no one can legally produce the note and still be considered the individual owner. Now, there are various systems in place whereby the trustee is given the power to move non-performing mortgage notes in and out of a trust. You see, with this ability, when the trust was first created, the trustee had in place "prime paper" or top of the line, "good credit" notes. This was used to get a great, Standard and Poors or Moodys credit rating for the trust.
With this, the investors flocked to the window to purchase these certificates, because they were rated; excellent by the rating services. Here is where the "rubber meets the road". The, trustee, within the language of the "pooling and services" agreement has the authority to move notes in and out of the trust. Now, by moving sub-prime paper into the trust, he knew that the chances of those notes becoming delinquent was a reality. He also had insurance in place so that when the homeowner defaulted on the loan, the certificate holders never lost a dime. This is why AIG ran out of cash.
Here is what really happens in the loan modification scenario, but your media does NOTHING to inform you, even though it is public information. The government says to the banks, "If you modify a loan, we will pay you $1,000.00 to do this". This money belongs to the American people. This is your money. Now, along comes Wells Fargo, Bank of America or one of the big banks that took government (your money) as a bail-out and they agree to modify loans for their customers.
Read VERY CAREFULLY. You won't believe this. As long as they take an application, the government pays them $450.00 Upon proof to the government that they completed the modification the government pays an additional $550.00. That is now a total of $1,000.00. BUT, lets say that prior to the loan modification your monthly payment was $1,350.00 and they come back with a modification of a monthly payment of $1,345.00. WOW! This does you NO GOOD at all. BUT, they did comply with the requirements of the government and lo and behold they have figured out a way to earn an additional $1,000.00 and do NOTHING. You are the victim of another scam.
Earlier, I related to Bank of America being sued by some of the certificate holders or investors of these notes. Bank of America modified a number of loans, but they legally could not do this as they did not own the notes. They needed the permission of the trustee of the Asset Based Trust who in turn either had the written permission of the owners of these notes or could easily obtain that permission.
When Bank of America modified those mortgages, even though they never owned them, they virtually committed fraud. Again, the American people are left clueless and can only believe what they hear from their neighbors or what is shown on the TV.
Your country and mine are being influenced by many that realize "you don't read" and therefore they can do things right before your eyes and you won't have a clue. Let me ask you something. If, I came to your doorstep on payday night (Friday) and said, "I need some money. Give me $300.00". How long would it take you to throw me off the porch, kick me in the butt and chase me off of your property?
Well, my friend, because you won't read and are too busy complaining and not knowing what goes on in the world, I don't even need to show up on your porch to steal $300.00. I don't even need a gun. I'll just either steal your identity or if you already owe me money from a sale of something, I'll just file a bad report to the credit bureaus, that will lower your credit scores and in that way, you will have to pay a higher rate of interest when you buy something. That is the system and its about time you start learning as there are NO CREDIT COPS to complain to.
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