Episode 4- Myths About Loan Modification
This Episode of “Use the Law”, Las Vegas Nevada attorney David Rahm discusses the Myths of Loan Modification in Las Vegas, Nevada.
Podcast Transcript:
There are a lot of common myths out in the industry about loan modifications and mediation. One of them is that in Nevada, the lender has to quote, “Produce the Note!”
Myth Number 1- The Lender Must Produce the Note!- The Produce the Note idea started because when a party’s original lender made the loan, they may have turned around and sold it to a larger bank, and they may have turned around and sold it to a large investment house like Merrill Lynch, Bear Sterns or Leehman Brothers, who may have turned around and put into a syndicated package of ten thousand loans from all across the country. Then sold that syndication, very similar to a real estate investment trust investment; where you could buy shares in that syndication. The way they sold them five years ago, it seemed like it was a great investment. One could make three times as much money as you could at the bank, with no risk! The logic was, who’s not going to make their house payment? Well, times have changed! A lot of people are not making their house payments. So in Ohio and in Pennsylvania (and a few other States), there were some State and federal judges who told parties who wanted to come in and foreclose people;
“Before you can foreclose them, you have to produce the original note and the deed of trust, and any assignments from the first lender, to the big bank, to Fannie Mae or Freddie Mac, to the big investment house, and out into syndication. Because, how do we know you really own their mortgage, and we’re not going to let you to foreclose their house if you really don’t own the mortgage.”
That happened in a couple of States in the 2006 to the 2007 time frame. That’s where the Produce the Note language came from.
Today, in Nevada, there is no requirement to “Produce the Note”. There was a federal case decided in Southern Nevada in early 2009 where the federal judge determined there is no requirement to produce the note. At mediation, because of a statute, the bank does have the requirement to “Produce the Note”.
If you are going to a loan modification company or an attorney who is telling you they are going to fight to keep your house by sending out a qualified written request for all your information, and find out what the bank did wrong on the loan, and if they committed fraud, and then we are going to ask them to produce the note; you are totally wasting your time and your money and the net result is very likely going to be that you are going to loose your house!
The second thing I want to talk about is the topic I briefly mentioned above, and that is Sending out a Qualified Written Request, and asking the bank to send to your loan modification company or your attorney all of the loan documents pertaining to your original loan. That’s fine! This law office has done the same thing many times. The problem is, in Nevada, lenders and escrow companies, and title companies, and loan officers, and escrow officers have limited, if any, fiduciary duties to borrowers. That means, It is a let the “buyer beware” State! If you go get a mortgage, it’s presumed you know what you are getting yourself into. It is not the escrow officer’s duty to explain it to you. It is not the loan officer’s duty to explain it to you or make sure those terms are acceptable to you. It’s your duty to know (the borrower)!
So if you ask for a qualified written request, and you get all the documents from the bank, and you see that they forgot to have you sign this document or they fail to do something that is minor in the scheme of things, there are people out there that are telling you:
“Ah, you can use that to get out of your whole loan. You can get the bank to write off your whole loan!”
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Well, I have been an attorney in Nevada for seventeen years working primarily in the area of real estate law, and I have represented well over one hundred homeowners in Las Vegas and other parts of Nevada in loan modification and the mediation process. I have also represented approximately 15 to 20 of them in litigation in District Court and Federal Court in the Southern District of Nevada. I know other attorneys, some of who have filed as many as three hundred lawsuits in this area. I have not heard of a single case where the plaintiff (homeowner) prevailed based on a fraud theory. Not a single one! There may be some, but there aren’t very many. It is not a useful area for you to expend your efforts and your money trying to save your home.
The bottom line is that you are highly unlikely in litigation, or in a demand letter, or in any communications with the bank, to get them to write down your principal balance, to get them to write off your mortgage, to get them to do anything useful to you; pertaining to an error that was made in your closing documents or anything pertaining to a fraud claim. It just isn’t happening. I know cause I have represented clients in this area, and at the end of the day, we’ve ended up getting them loan modifications because that was the only thing that was available to them.
So I caution you! Don’t get ripped off an inexperienced attorney. By an unlicensed loan modification company. If you are going to look at this area of law, or if you are going to seek information on how to save your home; if you are going to find a clean way of breaking from your home and giving it back to the bank, then make sure you go to a licensed Nevada attorney that knows something about real estate law. They must have experience in real estate law and have actually helped homeowners just like you! Don’t make the mistake of going to an unlicensed loan modification company, or an out of State loan modification company, and don’t go to a local loan modification company who tells you, “Oh yeah we are backed by an attorney and we’ve got an attorney here, but you don’t actually meet with the attorney.”
You can come to my office and have a FREE Consultation with me (David Rahm), because I will find out what your circumstances are, and determine what the best course of action is. That is the only way, you can effectively protect your rights!
Call David Rahm for a FREE CONSULTATION at 702-369-4663
Mediation
More about Mediation to come.
Episode 2- The Short Sale
This Episode of “Use the Law”, Las Vegas Nevada attorney David Rahm discusses the advantages and disadvantages of a short sale.
Podcast Transcript:
The Law Offices of the David Rahm Law Group receive phone calls every day from realtors wanting to know if we will negotiate, on their behalf to the bank, to obtain a short sale. Generally, we say no! The reason why is because the short sale process, is a long process. It can be a long process and with some banks it takes as long as 8 or 9 months to get them to approve a short sale. Realtors tell homeowners, desperate homeowners all the time, “put your house up for a short sale.” Now we have no problem with that. We recommend that as well. But the problem is that even if you find a short sale buyer, with so many house on the market and not that many people chasing them; even if you find a short sale buyer, then you’ve got to submit the offer to your existing lender and get them to approve the short sale. And you also have to be very careful to make sure that they’re going to agree to write off the difference instead of coming after you for the deficiency if you sell the house for less than what is owed against the home.
Realtors are not attorneys! They are not qualified to negotiate on your behalf with the bank. Many will tell you they can. But, they are not experienced negotiators in this area.
I would caution you (the homeowner) that if you decide to do a short sale that you need to understand who your lender is, and what their process for approving a short sale is; and make sure that you can get your house sold and closed before it gets foreclosed.
I have many examples of clients coming to me and saying,
“I put my house on the market. I quit making my payments. The bank told me to quit making my payments. They told me they would approve a short sale, and now they are trying to evict me; and they never approved my short sale.”
The banks are flooded with requests for short sales, and in many cases that is a process that can take three to six to nine months to get approved. The problem is if you are in default on your mortgage the odds are just as good you’re going to get foreclosed and evicted from your house before the short sale gets approved.
The other problem you have is the prospective buyer doesn’t want to stick around for six or eight months while you try and get a short sale approved. So a short sale is a valuable alternative to foreclosure. It is a valuable alternative to Deed in Lie of foreclosure. But it has its limitations, so you need to be sure that when you decide to go into a short sale you understand the process and how long it is likely to take to get your bank to approve it.
If you would like to have a FREE CONSULTATION with our Law Office we will help you in that process. The short sale being one alternative, and a loan modification and possibly mediation, and possibly bankruptcy being other alternatives.
You should look at and consider all of your alternatives before you decide how to proceed.
To Schedule a FREE CONSULTATION, you can call us at 702-369-4663
Episode 1- Bankruptcy, Your Last Resort!
On this program of Use the Law, Las Vegas Nevada attorney David Rahm discusses why he believes bankruptcy should be used as a last resort if you are in danger of loosing your home to foreclosure. Rahm states that loan modification with the representation of an experienced real estate attorney will, in most cases, yield the best results.
Podcast Transcript:
A lot of clients come into see me (The David Rahm Law Office). They’ve already been to see two or three other lawyers, and almost uniformly they tell me, “the other attorney told me to file bankruptcy!” In my mind, that’s an alternative for you (the homeowner), and it certainly is a constitutional right you have, but it should be the last alternative for you; not the first alternative!
Once you file bankruptcy that may protect you and your house for a period of months. But after that, the banks going to get a Lift of the Stay, your going to have to re-affirm your loan, and you are either going to keep your house under the current loan you have, or most likely, you’re going to loose your house.
I like to meet every client in person for FREE before we determine how to proceed with your case. But generally, the best way to proceed is to find out the clients particular circumstances. Find out what the circumstances are of their primary residence (and any other homes or businesses they might own and properties they might own), and determine what they want to accomplish. And what is possible to accomplish.
I do not like to give people false promises! I tell you what I am going to be able to do for you, and I am usually able to do what I tell you I am going to do! If anybody makes a promise to you; a guarantee about a result, don’t walk out of their office, RUN OUT OF THEIR OFFICE! Because they can’t guarantee what another human being is going to agree to do, and neither can I. But I can guarantee you this:
- We are experienced
- We know what we are doing
- We’ve done this many times before with homeowners and business owners and commercial tenants JUST LIKE YOU!
Bankruptcy should be your last choice, not your first choice!
If you can go into a loan modification and if you can knock your payment down as much as 50% in most cases (that’s been our experience), then a loan modification might be the appropriate first step for you.
If for some reason the loan modification doesn’t work for you, or becomes burdensome, then the second step is to go to mediation. A loan modification gets you out of default, if you are in default. If you then go back into default, you can go to mediation. If the mediation process works out, then great! If it doesn’t work out, now you’ve got to make a decision. Do I want to keep paying under my original terms, under a loan modification, or under a mediation settlement? Or, do I want to stay in my house as long as I can before I ultimately have to leave? Those are your alternatives.
- Step one, “The Loan Modification”
- Step two, “The Mediation”
- Step three, “Ultimately deciding what you want to do
- Step four is “Bankruptcy”
If you have to file bankruptcy, or if you need file bankruptcy because of large credit card debts or medical bills something like that. That is the appropriate time to use the bankruptcy right you are entitled to. It is wrong to use it first because it is a short term fix when the alternatives we offer can keep you in your home for as long as two years with minimal payments.
If you would like to have a FREE CONSULTATION with our Law Office we will help you in that process. You should look at and consider all of your alternatives before you decide how to proceed.
To Schedule a FREE CONSULTATION, you can call us at 702-369-4663
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09-04-2009 New Online Video Ad
Attorney David Rahm has over 17 years of experience as a lawyer, and for years has been doing both residential and commercial real estate law. He has a successful proven track record of loan modification in Las Vegas, and is offering new clients a free consultation with him. He looks at each case individually and works with the client to decide the best possible solution. He can help you reduce your interest rate, represent homeowners in mediation, extend loan payments, and in some cases reduce the principal balance. Call 703-369-4663 for a FREE CONSULTATION. You must be a Nevada homeowner, or visit http://www.DrLawLV.com for more information. The David Rahm Law Group has a great reputation and is ready to help you now! Se Habla Espanol!
