Loan Modification Perils

Charles R. Gallagher III 

They finally admitted it! After a recent deposition, counsel for the bank candidly said, "Of course we use financials for loss mitigation purposes to target suitable judgment debtors" for post judgment execution." After hearing the implausible party line mantra ad nauseam, that confidential personal financial disclosure would only be used to determine what loss mitigation options best fit the homeowners needs, finally a bank attorney was honest about the true reason banks seek financials from homeowners in foreclosure.

So what is loss mitigation underwriting? What is really necessary to determine of a mortgage modification is feasible? Sadly, loss mitigation is more art than science. Some lenders need three months to underwrite, while others need a month, some need a week and still others can underwrite on the fly in hour. Loss mitigation underwriting is the process in which the bank determines what, if any, foreclosure alternative best fits the homeowner. Options include a modification of the mortgage, short-sale, or a deed-in-lieu of foreclosure. The catch is that in order to be "eligible for review" the bank or servicer will require that you provide confidential financial information (tax returns, bank account statements, hardship letters, etc.) all in the name of evaluation of which assistance best helps the homeowner.

There is no uniform mandatory standard for loss mitigation underwriting. Making maters worse, there is no mechanism for oversight to police that loss mitigation underwriting follows some identified methodology. There is nothing to prevent banks from pulling numbers out of a hat forcing to keep a straight face as they assure you their offer was the result of a rigorous and detailed analysis. So what is the harm if banks misuse such confidential financial information? Well its no different than if you have provided your opponent in war the proverbial missile codes in advance of your attack. Armed with your tax returns and bank accounts, bank can carefully select who they want to pursue for deficiency judgments. With an eye into bank account banks are now primed select candidates for post-judgment execution.

At a recent Mortgage Bankers Association conference, a program entitled "Turning Data Into Dollars: Data Mining, Analysis and Reporting" recommended data mining under the guise of loss mitigation underwriting. Industry leader Lender Processing Services, offers data mining services to lenders in connection with loss mitigation applications. Additionally, another nationwide vendor to lenders and servicers, ComplianceTech advertises "specialized lending intelligence services." Further still, many available job listings for mortgage default collectors now include data mining as a required skill set.

So when you receive a letter from your lender offering help, while asking for disclosure of your most private financial information, think twice. Does this really help? Can the gratuitous disclosure of private financial information backfire on you? Much like the old adage of caveat emptor, borrowers would do well to beware when it comes to arming the bank with financials before it decides whom to target for deficiency judgments and post-judgment collection.

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G&A Fall Happy Hour

October 11, 2012

5:00-7:30

Tiki Bar and Party Deck

Gallagher & Associates Law Firm, P.A.

RSVP

christine@attorneyoffices.org

727-344-LAWS

Congrats to the Rowdies!
      
  The Tampa Bay Rowdies finished their regular season undefeated in the last six games.  Finishing second in the league, they qualified for a bye to the Semifinals of the 2012 NASL Playoffs.  The Rowdies will host the quarterfinal winner on October 13 at Al Lang Stadium.G&A is proud to be an Official Sponsor of the Tampa Bay Rowdies.   

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"Ruff" Halloween for Pets

Kathrine Lupo

With Halloween almost here, many pet-owners are starting to think about costumes for their furry friends. Make sure that your pets have a Happy Halloween by following some of these tips: 

Take your dog out for a walk in the afternoon or early evening so that you avoid the commotion of trick-or-treating.

Make a comfortable area in your home where your pet is secure. You won't need to worry about Fluffy slipping outside while you're doling out the candy.

Keep Halloween decorations like candles, skeleton bones, and pumpkins away from pets that want to get into everything.

If your pet is getting a costume, make sure that it is comfortable and allows for clear visibility. Animals can get anxious and upset if they can't see, hear, or smell.

Make sure that the candy goes to the kids! Chocolate is not for animals and can make them very sick. Clean up all wrappers and don't trust your pet to stay away from the candy bowl when your back is turned. 

The scariest part of Halloween should be spooky costumes and haunted houses! By planning your festivities with your pet's safety in mind, you both can have a Happy Howl-o-ween.

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Juror Skips Deliberations

Erika Mariz

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About Our Firm 

 G&A News & Notes 

Getting to Know your G&A Team: Ryan Williford 

Favorite Drink:

Homemade espresso drinks from my trusty Saeco espresso machine.

Favorite Restaurant: 

Johnny's Italian Restaurant (located on State Road 590 in Clearwater...check it out!).

Dream Vacation Spot: 

Northern Spain or Alpine regions of Italy & Turin. 

Favorite City:

Washington, D.C. 

Guilty Pleasure: 

My friends do not approve of my seemingly overindulgent consumption of raw cookie dough. 

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Poison Pill

Finders Keepers 

Kathrine Lupo

On Tuesday, September 25, a new law was signed by President Obama that allows the crew members from NASA's Mercury, Gemini, and Apollo voyages to keep the artifacts they found over forty (40) years ago. The issue arose when astronauts attempted to sell some of their artifacts. The new law applies to equipment that was not expressly required to be returned to NASA once the mission was completed. It excludes lunar rocks and other lunar material, but does cover man-made items including mission logs, checklists, and flight manuals. The law is favorable for the astronauts who retained the personal items as souvenirs from their flights. It also affirms ownership rights for collectors, museums, and other organizations that either bought artifacts or had them donated.

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