These applications are referred to by various names, such as the “Request for Modification and Affidavit” (“RMA”), the “710 Form”, and the “Uniform Borrower Assistance Form”. Regardless of what it’s called, or even if the information is being provided verbally, gross monthly income (“GMI”) and the total monthly expenses (“TME”) have to be provided accurately but also with an understanding of what can, and what should, be included and excluded. If you think the loan servicer is going to advise you properly on this, or if you think it’s a no-brainer, you’re almost definitely wrong. Also, did you know that it may not only be the borrower’s income which can be considered…?
One of the most common questions that I and other lawyers in my firm are asked by borrowers is weather a foreclosure action will start or commence even if the borrower is supposedly being considered for a mortgage loan modification or other type of mortgage relief such as a forbearance plan, a short sale, or a deed in lieu of foreclosure. Of course a relevant and important follow up question is why lenders continue to foreclose even if a mortgage relief option is supposedly in the works.
Unfortunately, in almost every circumstance, a mortgage lender/servicer such as Bank of America, Citibank, Chase, GMAC, and Wells Fargo will commence or continue foreclosure activities even while representatives of such loan servicers continue to tell the borrower that they are being considered for a modification, or even on the verge of receiving a final mortgage relief offer. Many of our clients have expressed that they feel as though the lender is dangling a carrot out in front of them with the one hand, while whipping them with the other. Many borrowers have expressed that they feel as though lenders are intentionally leading them on about the possibility of a mortgage relief option, just so the borrower is lulled into a false sense of security while the lender continues to foreclose.
I have one very important suggestion for you. I have handled numerous cases in which the mortgage lender or servicer has actually, from its standpoint, halted or even dismissed a foreclosure action but has either failed to communicate that to its foreclosure lawyers or to the borrower or the attorney for the borrower. If you are facing foreclosure, be sure to attempt to have direct contact with the entities who are prosecuting the foreclosure, or have your attorney do the same if you are represented. It is important to – as best as you can – make sure that you are as well informed as possible. Yes, of course, getting information out of these lenders is almost impossible at times, but it is important that you keep making the effort.
In order to be fair, we have to consider the reasons why mortgage loan lenders and servicers may continue to foreclose even though mortgage relief options are being considered. As in almost all legal matters which involve opposing sides, one side may wish to impose pressure on the other in order to get what it wants. From a strategical perspective, an attorney advising the lender may very well advise the lender to keep the pressure on for a number of reasons. Since some borrowers are unable to comply with the terms of a mortgage relief opportunity, and others simply turn down opportunities for mortgage relief, the bank may be best served by continuing a foreclosure action until a mortgage relief option is finalized. Keep in mind that the banks can typically take a situation to the very edge of a foreclosure sale yet not execute that sale if some final resolution short of foreclosure can be reached.
Let me make one final comment on this topic. You should be aware that there are numerous prohibitions against foreclosure under certain circumstances. These prohibitions may be found in federal law, state law, federal government program guidelines, court orders, court settlements, etc. Further information on this specific topic will be provided in on our website, including pages which discuss prohibitions against foreclosure contained within the Making Home Affordable program.
McGrath & Spielberger, PLLC provides assistance to borrowers in need of mortgage relief services, such as mortgage loan modification, foreclosure negotiation, refinancing, and deed-in-lieu or other negotiated settlement resolutions.