It shouldn’t come as any big surprise that when someone gets into trouble with a sub-prime loan a successful restructuring is difficult at best. USAToday.com thinks this issue warrants a front-page article. The article doesn’t read as if it were written by someone with real experience in the trenches with sub-prime borrowers. The focus seems to be that these aren’t FHA loans, and FHA loss mitigation regulations are not applicable. To my mind, article this makes certain assumptions that I don’t think can be made.
First, this assumes that FHA loss mitigation procedures are being applied in every FHA loan delinquency; and it assumes that they are being applied evenly and correctly. I don’t think that is a fair assumption.
To me, the real point of this article is my post from yesterday. Read the note. Read the mortgage. Everytime. Then, send a QWR to the servicer requesting a payment history, a copy of the servicing and pooling agreement and copies of any applicable loss mitigation procedures. Everytime.
Do I do this? Not often. Generally when clients come to me they are beyond this point, but I am starting to look more carefully at loan docs when faced with motions for relief. In a response I filed on Friday I asked for my fees, and I asked for an order finding that the servicer is not entitled to an attorney’s fee to be assessed against the account. Why? Because I had read the note and mortgage and neither the servicer nor his attorney had.
Read the note. Read the mortgage. Investigate the loss mitigation procedures included in the pooling and servicing agreement. Then, ask for fees.