San Diego Housing Market News and Analysis

The story is an accurate portrayal of the utter RH/LH incompetence of the banking/mortgage industry. If this "straight out of the gate" atty wants to handle cases like this and thinks they're worth the $$, then, more power to him.

THE LIPKIN FAMILY'S STORY WOULD BE DIFFERENT IF WELLS FARGO FORECLOSED TODAY.

On October 13, Governor Schwarzenegger signed SB 94, coauthored by the chairman of the California Senate banking committee, Senator Ron Calderon, and Senator Lou Correa of Anaheim. The bill prohibits anyone from accepting advance fees for working on loan modifications—meaning the Lipkins could not have legally hired Ali unless he was willing to work months without pay. The legislation is intended to prevent predatory loan modification scams from taking advantage of homeowners. But the language lumps lawyers with brokers, meaning lawyers will be unable to charge retainers. The bill is likely to reduce the supply of lawyers working on loan modifications, and thus decrease the actual number of modified loans, because lawyers can now ask for money only after their job is finished—successfully or not. This could mean months of work in the hope that at the end, a client who is by definition a credit risk will find the money to pay. SB 94 will, though, impede certain types of fraud. The law would have prevented the Lipkins' trouble with Rodis Law Group, the lawyers the family retained before they found Wajahat. Ron Rodis was disbarred October 15, and Rodis Law Group is under Federal Trade Commission investigation...

Reading this story was akin to a flashback of my life between 2008 and 2010. I too, assisted other borrowers in attempting to obtain a loan mod under HAMP or to obtain a "cash for keys" benefit from "deed-in-lieu" programs. Even after SB-94 was signed, I took another case like this but no up-front money. My "up-front" retainer prior to that was only $400, lol.

I WAS able to obtain postponements of sale dates but in the few cases I worked on, the borrowers were foreclosed upon. One, however, did receive a relocation allowance of $3K one week AFTER the trustees' deed was recorded (back to bene). However, I was/am not an attorney, like Ali here, and was NEVER afraid and knew what I was doing. Since I was NOT an attorney, however, I was unable to send demand letters threatening lawsuits and BK in order to stay the sale. In addition, I always had the borrower on speakerphone with me when I conversed with their lenders directly, AS WELL as a signed faxed authorization faxed to them days/weeks prior. I handled lenders' contractors with a faxed authorization alone.

No more. Just the psychic "wearing down" is more than I need at this late date. This is w-a-a-a-a-y too much work for the pay you receive.

...Their home, meanwhile, which was originally valued at $585,000, had depreciated severely in three scant years. It was now essentially worthless at $270,000. . .

A family that only had three days until eviction last July, now has a new, 40 year contract. Although the bank didn't agree to a principal reduction—very few banks agree to a principal reduction nowadays—they extended the terms of the contract by 15 years and lowered the interest thus making the monthly payments affordable and reasonable. My clients were paying nearly $4,100 a month on a ludicrous 8.095% interest rate. Their current payment is now $2340/month with a 2% interest rate. The interest rate will cap at 4.35% on the 8th year and remain for the remainder of the contract...

(emphasis added)

I am just failing to see how these borrowers have actually been "helped." Is "HAMP" really the be-all and end-all for borrowers like this (bought with NINA mtgs in 2007)? Sacramento is a fairly cheap county to rent/buy in. Wouldn't these borrowers have been better off letting their property go back to the 1st TD holder and then either renting it back from them or renting another house?

IMHO, HAMP is a "ripoff" and only benefits the lender(s). Why throw so much taxpayer money at it? Just foreclose and get it over with so all affected persons can start their respective "clocks" ticking sooner.

Piggs, you gotta ask yourself - how are these borrowers "better off" now??

I went to law school with the author. The wrestling a s**t covered bear reference was actually our property professor's analogy of how we would feel after taking his final exam.

"You may get out alive, but you won't feel good about it."

i subscribe to mcsweeneys on my iphone and often laugh out fucking loud reading it. there was an article on there about a pseudo letter from the front to the family on a guy playing call of duty that even made my kids howl with laughter.

mcsweeneys is excellent... i recommend th eiphone app

The punchline is the Lipkins merely got a reamortized loan over 40 years (so a 45 year total term) and a reduced rate slowly building to ~4.5%

And this is described as a victory for the homeowner?

It's a good thing people are bad at math I guess. The bank won.

If the Lipkins didn't spend $1 on lawyers and tried short selling (turn around on access to loans is faster).. they'd be way ahead financially by now. And depending on a host of factors (if the demonstrated hardship was enough) they could even have purchased another home by now for lower cost and a 30 yr term.

BG - I agree. IMO, a 40-year loan is not helping anyone. They should've walked and worked on their credit, then buy a home for 250k at a 30-year fixed, even at 5% and they would be better off.

I hope this is truly an amazing home that they LOVE. I could not imagine trapping myself like that.

Edit: I'm in the process of reading this. I got to the part that Natalie was as a mortgage processor for a division of Countrywide Financial. And she still did a no doc ARM? Man. People are just as dumb as rocks. She's in the industry. WTH.

Before coming to me
in utter desperation, the Lipkins, like so
many Americans, tried in vain to negotiate
with their bank directly. They were told that
a “negotiator” had been assigned to their file
and was “reviewing it.” Trying to reach this
mythical negotiator by phone proved more
difficult than finding Bigfoot

LOL.

Yes, jp, not sure if it was an OPTION ARM, but probably. If so, this dumb couple just "elected" to pay Opt 1 or 2 instead of Option 3 (the fully amortized rate). That's probably how their "payment shock" happened (neg am), lol. Of course, it was probably preventable.

Also, I stated the buyers had purchased in 2007. 2007 was the year Ali got his bar license. The article doesn't actually specify, but from the timeline, it now appears to me that they bought sometime in late 2005.

Who the [email protected] would pay that much for a tract house in Sacramento??

You actually have to try this yourself to believe it, jp. The depth and breadth of utter incompetency displayed by the "big bank" personnel dealing with these loans would knock your socks off!!

I just got to the part where he indicated he made 26k a month when in reality it was his yearly salary. HELLOOO!! And they arrogantly demand the bank act appropriately and quickly help them do a mod. {shaking my head and sighing}

BG,

The HAMP program -- and all the other programs and bailouts that were purported to "help homeowners" -- were designed specifically to help banks from the very beginning. It was ALWAYS about saving the banks, not the numb-skulls who overpaid and over-HELOC'ed during the bubble. The PTB focused on the "helping homeowners" part because that was the only politically viable way to convince taxpayers (at least the less intelligent ones) to fork over trillions of dollars in bailout money and guarantees to the financial industry.

Agreed. Very clear that's their intention. And for anyone paying attention then they said you have to help the banks in order for the banks to help the people. Bunch of BS.

The story made for interesting reading and a colorful story but I still can't get over how they were painted as victims by the big bad bank. Granted, a percentage of fault can be blamed on predatory lending but WTH happened to personal responsibility. I have no sympathy for people that can't do simple math and realize what kind of predicament they are going to be in if the house doesn't keep escalating with the bubble. I mean, you read what the guy said, "I'll buy you a Lamborghini...." Doesn't sound like them most financial savvy person. A lot of these people knew it was probably too good to be true when signing the docs and did it because everyone else was...like they mentioned in the article. Now they cry foul when shite hit the fan. You can't have your cake and eat it. I'm no fan of banks...however, if you are that stupid to follow the rest off the cliff, I can't have sympathy.