This is a weekly column by Sandusky attorney Dan McGookey, devoted to telling true stories of homeowners who have been victimized by a lending system that makes it profitable to foreclose.T he names used have been changed for privacy purposes. This is Sarah's Tale.
Two weeks ago, I spent an hour with Sarah, going over the background of her troubled mortgage, and explaining what she could do presently to lay the groundwork for success in her fight to save her home, even though she has not been sued for foreclosure. Even though she has struggled immensely to keep up with her monthly mortgage payments, she has fallen two months behind, as her 9% interest rate, resulting in payments of over $2,000 a month has been breaking her back financially. Not surprising, her bank, HSBB, is totally unforgiving and not willing to decrease her interest rate, which is almost four times the going rate.
Why? Because as I’ve said so often in this column, it is profitable for banks to foreclose in the world of securitized lending, where your bank doesn’t own your loan, but will actually get paid through insurance or other sources if the foreclosure goes through.(See next week’s story for good proof of this.) I believe that this is the cardinal truth for any homeowner working with their bank to get mortgage relief to know, and explains why the only modification such a homeowner is likely to achieve without some “pushing back”, is one that is ultimately designed to fail.
So what can someone like Sarah do while waiting for the foreclosure shoe to drop? I believe the answer is to document, document, document every attempt you make with your bank to resolve your situation. These documents can prove to be invaluable if and when a foreclosure ultimately follows. This is so since every foreclosure is an equitable action, meaning that the bank must prove that it treated you fairly or, to say it another way, has come to court with clean hands. But be careful of one thing while you are trying in good faith to work with your bank to get relief – chances are great that it is unwilling to give you a great loan modification, one that is built to succeed, because it is profitable to foreclose.
Note from the author: If you have questions or comments regarding this or any Foreclosure Story article, please visit www.mcgookeylaw.com
Town Hall Meeting Update: Have an adjustable rate mortgage? Come in and find out about yet another weapon to add to your arsenal in your fight to save your home.
Next week: Do you have any doubt about the profitability of foreclosure from the banks? Read next week’s story.
Copyright 2012 Daniel L. McGookey