March 28, 2017

Two Weeks in the Life of Mandelman Matters

Lately it has occurred to me that no one really has any idea what I do with my days… and way too many nights.  I know that people read the articles I write, or maybe listen to a podcast I produce, but that’s only a part of what consumes my time.

I haven’t wanted to tell everyone how I’ve been spending most of my time either, primarily because I intensely dislike even potentially being seen as tooting my own horn, and because I was afraid to say something that would encourage hundreds of calls and emails from homeowners all in need of help at the same time.  I am, after all, still just one person.

This past week, however, I started to think that maybe I should tell everyone what I’ve been doing with my days because maybe it would be uplifting to some people… I don’t know… maybe it would show that there is some hope of tomorrow being better than yesterday, and that I don’t just sit around writing about all the bad stuff going on… although that is part of what I do… tell the truth about what’s going on in our country or our world.

But, most of my time is spent helping homeowners in some way, including saving homes from foreclosure or trustee sale, or stopping homeowners from being evicted… or, well… all kinds of stuff like that.  Don’t get me wrong… I don’t fill out paperwork or anything like that.  I do my work by talking on the phone or writing.

And no one pays me for what I do.

It’s hard to describe what I do when I say I help homeowners.  I’m not a lawyer and I never offer anything close to legal advice.  I’m not a mortgage expert either.  I think my value is that I share knowledge, information and perspective on what people are going through and what their options are.  I offer my 2¢ if asked.  And I do a lot of listening.

I think it would be easiest if I told you about the last two weeks. 

It all starts with the homeowners who either email or call me… I sit down with my coffee and say… “It’s Groundhog Day,” as my email opens.

Last week, I had three calls related to homeowners in their 80s, and so far, I’ve been able to help save all three from a pending foreclosure sale or, in two instances, eviction.

This crisis is most tragic when you see it impact the elderly.  I mean, kids being affected is no fun either, but kids can endure more than we adults ever thought about, and bounce right back.  Eighty year-olds are kind of set in their ways, as well they should be.

And I just don’t think we can evict 85 year-olds… no matter what.  Last week, I had one 84 year-old woman from Glendale.  She may be getting up there in years, but she’s sure able to talk loudly and clearly, and has no trouble giving me an earful.  I know she doesn’t use a computer, otherwise I’d be afraid to say anything… lol… and besides, I do like her.

She may sound angry about things, but you can tell she’s only angry because she’s afraid.  Her income is only $700 a month and her mortgage is about $350,000.  When I heard that for the first time my stomach sank.  Oh my God, was all I could think to myself.  How the heck do things like this happen?  Who gave this woman with income of $700 a month a $350,000 mortgage?  And why isn’t that illegal?

To make matters worse, her $350,000 loan was the result of a cash-out refi, and she took over $200k out of her equity at the time.  She spent the money living for the last five or six years.

The only good news was that her servicer wasn’t Wells Fargo, it was Bank of America, and when I heard that, I was relieved to say the least.

I called BofA right after I hung up after talking to her the very first time.  She was about to get a Notice of Sale on her door, and I told BofA we had to stop that from happening or she’d have to move in with me and they, thank goodness, agreed.  The woman’s son passed away years ago, and she said she had no family and nowhere to go.  What were we going to do here, carry her frail body out kicking and screaming?  Come on now, that doesn’t ever happen, does it?

BofA went to work trying to find alternatives, but with her income at $700 a month, even if they were to write the loan down to $100,000, she still couldn’t afford the payment.  I tried bringing up the idea of a roommate, but she started yelling at me about how she needs the bathroom when she needs the bathroom, so I backed down immediately thinking, “Too much information.”

I tried contacting various state agencies and charities to see if there was anything she could apply for assistance-wise or any state programs that helped in such situations, but found nothing.  We really don’t take care of our elderly population very well in this country.  I even tried contacting Katie Porter who is California’s monitor for the National Mortgage Settlement, but she didn’t have any brilliant ideas either.

BofA told me to try throwing some money at her… I tried $20k in moving out cash, thinking she could use the money to pay her rent for more than a year perhaps.  But that didn’t fly either.  I told her BofA would likely write down the loan, and she says she’s trying to get some money to buy the place somehow, and although I can’t imagine how, I’m going along with it.

I told her to use my name if anyone should call and try to scare her or bother her.  I think very highly of Bank of America these days, but no one’s foreclosure machine is set up to be compassionate or particularly gentle with the elderly.  It’s funny, she wards off all callers by saying Martin Andelman is handling things for her, and it’s been working, which is amazing.  She draws my name like a gun.

So, last week she got a notice on her door from a local Realtor who must work with BofA.  She called to tell me and I called the Realtor to get him to stand down.  I explained the situation, gave him a BofA contact to check with and he seemed to be okay with backing off.

Whew… another bullet dodged.  BofA asked me what I’d suggest in this case and I said I’d like to pretend we never found her.  So, for now anyway, she’s in the Mandelman – We never found this homeowner file.  LOL.  I’m sure Bank of America will come up with something, but she’ll just stay where she is for the foreseeable future.

So, one up… one saved.  But, I still can’t but wonder how those loans were ever originated.  You don’t give a loan like that to someone that age who has $700 a month in income.  I’ve asked lawyers about it, and I know there’s nothing that can be done at this point, but still… if we fix anything it would be nice if passed laws that prevented that from happening again.

Of course, we do know how it happened, right?  Some mortgage broker saw a commission check instead of his grandmother and went for it.  No doubt it was someone who was Born to Loan… so, sing it with me… to the tune of “Born to Run” by THE BOSSBruce Springsteen and the E Street Band… come on, you’ve got a couple of extra minutes… it’ll be fun…

 

 

 Next up?

The next octogenarian I heard from this past week was 87 years old, and recently had a stroke.  It was her son that was calling, and she had a lock out date set for July 2nd.  Do we haul them out on stretchers now when we evict.  Because we really need another vacant home in El Monte.

The son had been going through the run-around supreme for over two years, the home had unexpectedly sold last January, and he had been following the advice of a lawyer I know ever since.  He started with Countrywide, then went to BofA, then switched to Saxon, and then to Ocwen. Each time he thought he was close to getting the loan modified, and then he’d have a new servicer with which to start all over.

So, it was Ocwen… whew!  Give me an Ocwen or BofA… or even a One West any day of the week.  At one point, Saxon had even given him a written modification offer, but then they sold the property 48 hours later.  You know the story… it’s like… why can’t we stop doing that?

So, obviously no one is evicting an 87 year-old with 24-hour a day nursing care, who is recovering from a stroke.  I called BofA first, hoping they would be the investor and got lucky… they do own the loan.

They said they were okay with whatever we needed to do, and told me to call Ocwen.  I’m sure I’ll talk with Ocwen’s General Counsel on Monday and we’ll come up with a way to modify this loan so that she can remain in the home.  At least her income is $2500 a month, plus her son can subsidize.  Her loan is not chopped liver though at just under $600k.

I find Ocwen to always be more than reasonable and in fact very helpful.  I realize I’m not just calling the main customer service number, so I’m sure it’s easier for me than it would be for others, but I’ve been to their servicing facility in West Palm Beach and everyone seemed very together and on top of things.  So, I’m confident that my 87 year-old is in the saved column.

My third close encounter of the elderly kind was with a woman in Tennessee who is taking care of two elderly parents, both with Alzheimer’s.  The Daily Double, I thought to myself.

This woman is a very caring and dedicated daughter to be doing what she’s doing, but she’s too trusting.  She’s been ripped off by at least two scammers, and I think the real number is three.  The most recent one is here in Southern California and they got her for about $7,000.  I’d expose them now, but I’m going to check them out first.

The worst part is that we’re talking about a $135,000 loan on a home that’s worth about half that amount.  Oh, and she’s BofA too, with decent income… about $3500 all in.  So, I’m sure we’ll be able to come up with something, and until then BofA said they’d just put her into the “Didn’t find her yet” file.

That’s not everything I worked on last week, but it was a triple-header of 80 year-olds about to get evicted, and working with BofA, we saved all three, so it was memorable.

The week before I was able to help a lawyer get a wrongful foreclosure that was sold to a bona fide third party, returned to its original owner.  And it was Bank of America to the rescue once again.  It’s always nice when I can help someone avoid going to court.

 

 

I also was involved in getting a modification for a well-known consumer advocate, and you won’t believe it, but… are you ready for this?  The loan’s owner… Wells Fargo.  And the loan was marked, “non-delegated,” which means that all decisions have to be made by Wells… the servicer has no power to modify anything.

The hardship in this case was extreme… and you don’t want to know more.  She’s an amazing woman and is back to her life, and all I kept thinking was that she doesn’t deserve the Wells Fargo treatment.

So, I spent a significant amount of time explaining the situation to the people at her servicer, to make sure they understood the nature of the problem.  I was sure that this woman would be watching every move the banks made, as she is a well-known and experienced consumer advocate in another industry, and certainly had plenty of media and political contacts.

The servicer packaged the whole thing and submitted it to Wells for a decision.  It took a while to get everything together that was needed and it went right down to the wire, with one sale date requiring postponement, which we couldn’t get done until the absolute last minute and it drove everyone involved insane.  But, it all worked out in the end, and the homeowner is happy.

We were working with a $900,000 Option Arm with a current interest rate of 2.65% and still, the servicer managed to make a successful case to get her payment lowered, and then it comes up over like three years or so and stays fixed at under four percent.  I don’t think she realizes what a miracle it was that it got done.

 

 

And the last, but not least, was my miracle case.

It was an eviction set for less than a week away.  A super nice couple, he’s a firefighter; she was laid off about eight months ago and hasn’t been able to find another job.  They have young children, and frankly not enough income for the size of the loan.  About $3,000 a month with a $455,000 mortgage, so… yikes… not good.

What happened renewed my faith in people and even bankers.  It’s not the first time that I’ve seen Bank of America do something above and beyond the call even though there was no one watching, but it was exceptional nonetheless.

Once I saw BofA modify a loan for a retired widower/disabled vet, with a one-tenth of one percent interest rate, fixed for 40 years.  Amazing, I know.  I accused them of showing off and they laughed.  I’ve also seen them grant principal reductions that cut the price of a home in half.

But this time, they came though without even being asked.  The bought the loan from Freddie Mac, wrote it down, and made it possible for my firefighter and his young family to remain in their home, when they were already in boxes thinking they would have to leave.

I don’t mind telling you that the experience brought tears to my eyes.  BofA didn’t have to do it… no one was watching… and they did it anyway.

Truth be told, I’ve seen Bank of America do impressive things a hundred times over the last few months, but Ocwen and One West have also proven to be banks I can pretty much trust to do whatever they can for a homeowner.

I know, I’m going to get emails saying I’m out of my mind, or someone will accuse me of having been bought off by the bankers, but I can assure you that neither is the case.  Over the last few months, I’ve gotten to know servicing from the inside and although there have been all sorts of problems, things are much better.

The problem is, as I’ve explained to my contacts at BofA and Ocwen… even though servicers are improving, homeowners, in many ways, are getting worse.

I certainly understand it… homeowners have all heard more than their share of horror stories about applying for loan modifications, so it’s no wonder more are turning to litigation, or not getting in touch with their servicer until it’s absolutely necessary.  And that’s not a good thing for anyone.

So, I’m working with BofA and Ocwen to develop more ways that I can help more people.

For now, I’m contacting lawyers I know all over the country and seeing if I can help them get sustainable modifications for their clients without the need for litigation or a maddening application process.  And I’m helping the homeowners that reach out to me.

And it’s working… it’s working very well, at least as far as my two or three favorite servicers are concerned.  I’m hoping that ultimately I can help show the industry a better way to interact with homeowners and a better way for homeowners to approach their servicers.

Just so everyone knows, no one asked me to write this, in fact it’s very important that I tell everyone that past results are no assurance of future performance. One of the things I’ve learned about loan modifications and foreclosures is that we’ve all underestimated how difficult the problem has been, and is.  Up until this crisis, we’ve never had a tsunami of foreclosures… under one percent to under two percent, sure.  But, no one ever planned for this to happen.

In the past, when people lost their job or got hit with some other significant life event, they sold their home or borrowed against the equity in order to get through the rough patch.  Today, that’s not possible.  Today, people who would never have come close to foreclosure at any other time in recent history are finding themselves forced to think about what was previously unthinkable.

Over the last two years, Bank of America has hired an inconceivable 55,000 employees to support their loss mitigation efforts, and the bank is spending $2 billion a quarter.  I’ve seen dozens of significant principal reductions come out of BofA in the last 30 days, but there are more restrictions on modifying loans than I thought there were.  Fannie and Freddie are notoriously difficult to deal with, and there are non-delegated loans that only the investor can approve.

Ocwen’s SAM program, which stands for “Shared Appreciation Modification,” has been doing thousands of modifications with principal reductions this past year.  Ocwen’s senior management makes it clear that they want pools of performing loans, and don’t foreclose unless there’s no other option available.

But both Bank of America and Ocwen are quick to point out that they do make mistakes.  Every time I’ve brought something that appeared to have slipped through the cracks, if it was their screw up, they’ve both been quick to admit it and correct it.  But loan modifications are never going to be perfect or fair… they’re like snowflakes… each one is unique in countless ways.

But, although I can tell you about BOA, Ocwen, or to some degree One West, I can’t defend or explain the behavior of all of the servicers.  Not even close.

I can’t figure out Wells Fargo’s behavior to save my life… and then they modify a loan without a problem and leave me scratching my head.  And I just saw SunTrust deny a woman in her 70s… a woman who has lived in her home for 41 years… got denied because according to SunTrust, she was short by less than $50 a month.

There’s no question about it, we’ve got a long way to go before everything could be described as going swimmingly, but at least six years into this mess, I don’t feel like we’re not running in place anymore.

And for me… it’s been all in a day’s work.

Mandelman out.

NOTE:

If you’ve had a recent experience with a loan modification, good or bad, I want to hear what’s going on out there.  Write to me at [email protected].

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