{"id":306,"date":"2010-06-18T07:35:17","date_gmt":"2010-06-18T14:35:17","guid":{"rendered":"http:\/\/fiduciarydutiesblog.com\/?p=306"},"modified":"2010-06-18T07:35:17","modified_gmt":"2010-06-18T14:35:17","slug":"lenders-behaving-badly","status":"publish","type":"post","link":"https:\/\/fresnolawyerblog.com\/?p=306","title":{"rendered":"Lenders Behaving Badly"},"content":{"rendered":"

Professor Brent T. White from The University of Arizona Law School has followed up his report issued last fall regarding troubled loans.\u00a0 Prof. White personally communicated with more than 350 individuals regarding their mortgage problems.<\/p>\n

His new report raises a number of troubling issues, but none more so than the dissembling tactics of lenders.<\/p>\n

Writes Prof. White, \u201cThe reason that many strategic defaulters struggle so long before deciding to default is that fear and anxiety are not typically enough in isolation to cause them to stop making payments.\u00a0 Rather such anxiety more frequently serves as a call to action, driving homeowners to try to do something about their situation \u2013 such as contacting their lender to try to work out a loan modification or a short sale.<\/p>\n

\u201cIn fact, not a single strategic defaulter in the 356 accounts reviewed for this article reported having stopped paying their mortgages without first contacting their lender . . . Many underwater homeowners who seek help from their lenders, however, are turned away at the door. As one homeowner explains, \u2018I called my lender and ask if I could discuss a loan modification and they said absolutely not.\u2019\u00a0 Lenders give numerous reasons for this, most commonly that homeowners are current on their mortgages.\u201d<\/p>\n

If you are current on your loan, regardless of the financial struggles to maintain the loan, you will never get your loan modified<\/strong>.\u00a0 \u201cThe fact being a \u2018responsible\u2019 borrower is the surest way not to get a loan modification can be a rude awakening for many homeowners.\u201d<\/p>\n

\"Da<\/a><\/p>\n

Prof White continues.\u00a0 \u201cThis is because most lenders don\u2019t modify mortgages or agree to short sales for homeowners who might continue making their payments absent such accommodation. The best predictor that a homeowner will continue making payments is a good credit score and a past history of making their payments.\u00a0 Homeowners with such characteristics thus have little chance of getting help unless they first miss some payments, and they are frequently told this by the loan servicing personnel who take their calls.\u201d<\/p>\n

Worse yet, \u201cThe loan modification process turns out, however, to be immensely frustrating[.]\u00a0\u00a0 Homeowners are frequently unable to reach anyone to discuss their applications\u2019 status[.]\u00a0 Their paperwork is \u2018lost\u2019 repeatedly[.]\u00a0 They are treated rudely and lied to[.]\u00a0 Worse, after months of frustration, most homeowners learn that their lender is not willing to work with them after all.\u201d<\/p>\n

Prof. White is not exaggerating.\u00a0 I have yet to meet a borrower with anything positive to say about the loan modification process.\u00a0 As a society, we are not serious about helping borrowers with troubled home loans.<\/p>\n

Brent T. White, Take this House and Shove it: The Emotional Drivers of Strategic Default<\/strong> (May 2010)<\/p>\n","protected":false},"excerpt":{"rendered":"

Professor Brent T. White from The University of Arizona Law School has followed up his report issued last fall regarding troubled loans.\u00a0 Prof. White personally communicated with more than 350 individuals regarding their mortgage problems. His new report raises a number of troubling issues, but none more so than the dissembling tactics of lenders. Writes […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,6,8],"tags":[],"class_list":["post-306","post","type-post","status-publish","format-standard","hentry","category-developments","category-economics","category-real-property"],"_links":{"self":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/306"}],"collection":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=306"}],"version-history":[{"count":0,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=\/wp\/v2\/posts\/306\/revisions"}],"wp:attachment":[{"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=306"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=306"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fresnolawyerblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=306"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}