Battling the Banks with HAMP UPDATE

Recently we have explored the benefits and pitfalls of the HAMP program, and at times it can seem like a distressed homeowner has no hope when the banks make all the rules and then break these rules at will. Fortunately, that is not always the case.

In Putnam County, New York Michael B Schulman and Associates were able to score a major victory for the little guy against the corporate behemoths who all too often run roughshod over average, middle class Americans.

In that case, the defendants endured a tumultuous run of bad luck that started with their involvement with a ponzi scheme in which they lost most of their life’s savings. This initial financial misfortune put the defendants, a normal working class family with two children, on the edge of homelessness, as they fell behind on their mortgage. But they still had hope when they had found a “white knight” in the form a man who offered his services to get them a loan modification to save their home.

That “white knight” quickly morphed into a villain, however, as he pocketed the family’s money for himself as part of a multiple state mortgage modification scam that defrauded dozens of families of hundreds of thousands of dollars before the FBI caught up to him.

Unfortunately, that arrest gave little comfort to the defendants. They had relied on the fraudster and now were in full-blown foreclosure and having never answered the court in the case, they were on the verge of losing their home. It was at this point where, with the help of Michael B Schulman and Associates, they applied for a HAMP loan modification. With adequate income and the home within the appropriate property value metrics, it had every indication of being an easy approval.

However, the bank denied the defendant’s application, and not only that, but they only did so after taking months and months to render a decision. The time during which the court action should have been stayed as a settlement was worked out, but the Court instead ruled against the defendants, granting the bank’s motion for an Order of Reference, normally a death knell for the homeowner, within days of the bank denying the HAMP application.

Such a sudden change of events took the defendants by surprise and spiked the curiosity of Michael B Schulman and Associates. This scenario should not have happened. There had to be a reason for such a whirlwind of events to transpire, and sure enough there was.

The bank that was at the center of the foreclosure had sold the note and mortgage along the way as the court action progressed. In fact, the mortgage and note were sold four times since the original court papers were filed with the Putnam County Clerk. Compounding the issue was the fact that neither the court or the defendants were never told that the mortgage and note had been sold.

The entire time that they were trying to get a loan modification in good faith, the bank never owned the mortgage or the note, and yet continued to “negotiate” with the family.

Obviously, the bank was not playing fair. But would they get away with it, as they have gotten away with so much in the past? Not this time.

Michael B Schulman and Associates was able to bring an order to show cause before the Court in Putnam County asking the Court to vacate the default judgment and order of reference in the case and effectively start the case over.

This would allow the defendant family to go through the foreclosure action with an attorney and allow them to negotiate a loan modification in good faith with the actual owner of the mortgage and note. The Court granted the application.

The family that has endured so much hardship at the hands of fraudsters and then dirty dealing by the banks will now get the chance to triumph over their adversity and force the bank to treat them fairly and to get the HAMP loan modification that they deserve to save their home.

 

“Battling the Banks with HAMP UPDATE” was written by Michael B. Schulman, Managing Attorney.

Read our previous article detailing the HAMP program, “Don’t Let the Banks Win, Get Home Help With HAMP,” here.