Obama’s Campaign Against Mortgage Modifications

Posted on April 13, 2009. Filed under: Bailout, Banking, Foreclosure Defense, Loan Modification, Mortgage Audit, Mortgage Law, Politics | Tags: , , , , , , , , , |

President Obama has apparently embarked upon a campaign to put all private sector loan modification firms out of business because some are apparently scams. It’s a curious approach when you consider that there have been and continue to be countless stock market related scams in this country, but I can’t remember a president telling me not to pay my financial advisor as a result.

Speaking on the subject of his housing rescue plan, which will, once it’s available, offer to modify certain mortgages, the president has said on several occasions: “If you have to pay, walk away.” So, the fact that they charge a fee makes them a scam? And here I always thought that it was charging a fee and not delivering a service that was a problem. Just the fact that a firm charges a fee… well, not so much, right?

If the president is right about the whole charging a fee issue, then why does the California Department of Real Estate tell homeowners that they should be sure to use a loan modification firm that uses its “Advance Fee Agreement”? I’m confused.

President Obama has also said that people don’t need to pay a fee to have their loan modified because they can simply call their banks directly. I was curious about this, so I went to IndyMac Federal’s Website that advertises their new streamlined loan modification service. Here’s what it says in the first three paragraphs:

“The goal of this streamlined loan modification program is to achieve improved value for IndyMac Federal. IndyMac Federal will only make modification offers to borrowers where doing so will achieve an improved value for IndyMac Federal.”

Unusually forthcoming, if you ask me. The bank is telling you right up front that they’re happy to negotiate a modification of your mortgage in their best interests, certainly not yours. And that’s what they should be doing, I suppose. But as a homeowner, don’t I want someone who knows mortgage modifications to be negotiating on my behalf?

Telling me I don’t need to pay an expert to represent me with my bank seems like the police telling me that I don’t need an attorney after I’ve been arrested because I can just ask the District Attorney any legal questions I might have. Gee, thanks for the advice, but I think I’ll go ahead and call my own lawyer anyway, okay?

via Obama’s Campaign Against Mortgage Modifications » Mandelman Matters.


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2 Responses to “Obama’s Campaign Against Mortgage Modifications”

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Can you provide links to how Obama is going to “pull all private sector loan modification forms”.
That will never happen. If so, it would have already taken place in the Debt Settlement vertical. Debt is a same model and is highly regulated, which loan mods should also. There a ton of scammers out there and it is unfortunate. This is why Obama also stated the facts: You can do it on your own, why pay? True statement, but clearly he is not going to eliminate a business model that is keeping the economy with extra jobs.

just my two cents

Obama seems too close to the banking industry and some of his actions appear biased and in favor of lenders. Why would a president tell homeowners not to hire an advocate to help them negotiate a favorable modification? We can all file our own tax returns too but some of us choose to pay someone else to do it for us. How would it look if the IRS told you not to hire a CPA because you can file by yourself?

Obama’s comments have further tainted the already damaged image of the mod industry and this can only lead to the elimination of private modification companies.

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