A Guide to Loan Modification Do’s and Dont’s

Don’t Believe Guarantees

Even if you qualify and are eligible for a modification of your home loan, lenders are not required to offer you a modification. All of the modification programs are voluntary. So be very, very suspicious of anyone who promises or guarantees he can get you a modification.


Be Diligent

After you’ve submitted your loan modification documents, be diligent. Check in with your lender often through mail, e-mail or phone (Keep notes and copies, as explained below). Loan modifications do take time to process, but the lenders also have a history of delaying and dragging out the process.

Get it in Writing

It’s possible a representative over the phone will tell you that your foreclosure sale will be postponed while the lender is evaluating you for a modification. If you don’t have that promise in writing, do not believe it and do not rely on it. Usually, you won’t get that statement in writing until AFTER you’ve been approved for, accepted, and starting making a payment on a trial modification. Check online or call the agency handling the foreclosure to see when the latest sale date is.

Keep Copies

Lenders are notorious for “losing” or “misplacing” documents you send to them. It’s not uncommon to be asked to re-send documents 3 or 4 times before they’re finally received and processed. Be prepared by keeping paper or electronic copies of everything you get from or send to the lenders.

Take Notes

Often you’ll be talking to lenders over the phone to find out about the status of your modification or to get information or ask for an explanation. Take notes in the form of a journal or log where you write down: 1) The Date, 2) The Time,  3) The Name of the Person you’re talking to, 4) The Extension of ID# of the person you’re talking to, 5) Detailed Notes about your conversation, 6) Any Followup  Actions you took. This information can be important in your negotiation process but also will make it more likely that an attorney or other agency will take your case seriously if the lender later goes back on any promises it made you.

Example:

  • 03/06/12 9:00 a.m.
  • Shelly at  ext. 9999
  • Called to ask about status of loan modification. Shelly said she didn’t see any loan modification application in my file and asked me to re-send it. I told her I sent it back on February 10 and have a confirmation slip from the post-office saying someone at the bank signed for it. She said she “found” most of the application but asked me to resend my hardship letter anyway. I mailed it the same day with delivery confirmation.

Watch Out for Scams

Since July 2010, it has been illegal for anyone other than a licensed attorney to charge you an upfront fee for a modification or modification services. Lawyers can charge you upfront fees under the idea that if the lender lies to the lawyer, the lawyer can sue on your behalf. Loan modification companies that you hear on the radio, or see ads for should not be charging you any fees upfront. Your best bet is to talk directly with your lender, with someone at Southern Arizona Legal Aid, with a free HUD approved counselor, or with a licensed attorney with an Arizona Bar number. If you encounter a scam, contact the Attorney General’s Office and a licensed attorney you can trust.

 Don’t Wait till the Last Minute!!!!!

In Arizona, it is incredibly difficult and often impossible to undo a foreclosure sale after it happens. That’s because Arizona law assumes that a sale was valid after it’s completed. Make sure you get help from a trusted source (HUD, Legal Aid, an Attorney) as early on as possible. DO NOT WAIT until the last few days leading up to your sale to try to stop it. Give the people who want to help you as much time as possible, at least a few weeks, to see what they can do. DO NOT WAIT until the last minute!!

Posted by Alexandra Tracy-Ramirez

http://www.brorexlaw.com

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March 7, 2012 · 4:50 pm

Default Judgments and Time for Responding to Lawsuits

Question and answer on the time period for responding to a civil lawsuit and a default judgment.

 

Posted by Alexandra Tracy-Ramirez of the Law Office of Barry W. Rorex, PLC

http://www.brorexlaw.com

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March 5, 2012 · 7:07 pm

Breaking a Lease After the Apartment Has Been Robbed

http://www.avvo.com/legal-answers/can-i-break-lease-when-my-house-has-been-robbed–657803.html

Posted by Alexandra Tracy-Ramirez of the Law Office of Barry W. Rorex, PLC

http://www.brorexlaw.com

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Don’t Trust Banks as Far as You Can Throw Them…

By Barry, owner of Law Office of Barry W. Rorex

…There are no exceptions to this rule.

Although banks have never been truly popular, for most of our history they have been respected and trusted. That has changed completely in the last five years.

For at least the last thirty years or so, there has been tremendous consolidation within the banking industry. During that time, the concept of the local bank and the local banker has pretty much been replaced by the large bank that has no local authority to make any decisions that help people. Any time anything has to be done, approval must be sought from some other state. This has really caused people to think that banks are unresponsive.

In 2007, this whole process was exacerbated by the real estate crisis that proved that not only that the banks were unresponsive but they also weren’t truthful in their banking processes. As we have been slogging through the loan modification fiasco, we have seen that the banks not only lie to their shareholders and customers, they will also lie to Congress, to examiners and to anyone else that will listen to them.

The lesson to consumers then is that banks have now joined the ranks of used car salesmen and cable television purveyors in the “Don’t believe anything that’s not in writing” ranks. Worse, though, it’s often not wise to trust what is in writing either.

This week our staff will be writing about lessons learned and banking misdeeds.

As a consumer, it’s important for you to know not only what’s going on with the banking industry, but what you can do if you find yourself up against the banks.

The banks have a team of lawyers on their side, so should you.

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FORECLOSURE RESCUE SCAMS

By Alexx, Staff Attorney and Mike, Law Clerk

LOAN MODIFICATIONS GUARANTEED!

WE’LL GET YOU A GOVERNMENT APPROVED LOAN MODIFICATION!

REFINANCING AT 2% INTEREST RATES!

STOP FORECLOSURES TODAY!

Signs and radio ads like these are all over town promising struggling homeowners immediate results and immediate relief.

If it sounds too good to be true, it’s probably not legal.

Since last summer, it has been ILLEGAL for anyone other than a licensed attorney to charge up-front fees in exchange for the promise of a loan modification. If you or someone you know has fallen victim to a loan modification or foreclosure rescue scam, report it to the Attorney General’s office and then call a licensed attorney for a consultation.

The AG’s office will make a note of your complaint and may investigate, but the chances of them suing on your behalf are small.

It’s important to also have an attorney who can go after the modification company and its owners to get your money back and help undo the damage the company caused.

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Security Deposits

by Alexx, staff attorney.

There are a few basic things to know about security deposits. The rules for them are found in the Arizona Residential Landlord Tenant Act.

A security deposit is money a tenant gives to a landlord to hold on to, to help motivate the tenant to honor their rent agreement and to help cover the landlord in case the tenant breaks the agreement. A security deposit is not the same thing as a pet deposit, a cleaning fee, or a redecorating fee.

WHAT CAN A LANDLORD CHARGE FOR SECURITY DEPOSITS?

The most a landlord can ask for in a security deposit is 1 and 1/2 month’s rent.

WHAT HAPPENS TO THE SECURITY DEPOSIT AT THE END OF THE LEASE?

At the end of the lease, the landlord has 14 business days (so, not counting weekends and holidays) to return the tenant’s full security deposit OR whatever’s left of the security deposit after the landlord makes reasonable deductions to cover damages that are outside of the normal wear and tear that’s expected to happen over time. The deductions the landlord makes must be in writing and must be itemized. In other words, the landlord has to write out a list of the damages and charges. For example:

Total Security Deposit- $1000.00.

  • Broken window pane–  $50.00 to replace glass
  • Burn marks and missing chunks of carpet– $200.00 to replace 20 carpet squares.
  • Plaster and drywall, labor and materials to fix giant person-sized hole in living room wall– $350.00

Deductions Taken Out- $600.00

Amount to Return to Tenant– $400.00

If the landlord hangs on to the security deposit without providing a written explanation of deductions, the landlord can be liable for double the amount that the landlord should have given back.

So if a tenant provides a $1000.00 security deposit and is eligible to get it all returned to her but the landlord wrongfully holds on to it and doesn’t provide the explanation for why, the tenant can recover the $1000.00 PLUS $2000.00 in damages for a total of $3000.00.

In the scenario above where there was damage to the rental, the tenant was still eligible to get back $400.00. If the landlord fails to give that back, the tenant can recover the $400.00 plus $800.00 for a total of $1200.00.

While it sounds simple, it’s not necessarily an easy process. If you’re having a hard time struggling over the security deposits, you may want to speak to an attorney who can help you.

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Moving in to a Rental Home

By Alexx, staff attorney

‘Tis the season for moving, if you live in a town or city with a significant number of college students. In Tucson, home of the University of Arizona, nearly 4/5 of U of A students live off campus in the neighborhoods surrounding the university. Even if you’re not a student, you might find that there are a lot of deals to be had for fabulous rental homes or apartments this time of year.

Whatever the reason and whatever the season, it’s a good idea to be prepared going in to a move.

Rule of the day:  Know what you’re moving into.

You may have found the brand new spacious home on the outskirts of town or a charming duplex built that still sports its 1940s charm. Whatever the type or condition of the home, it’s important to understand what your new rental comes with, what you’re responsible for fixing or maintaining, and what happens if something goes wrong.

The two biggest tools in your move-in tool box are going to be a move-in inspection or assessment sheet and photos, lots of photos.

The purpose of the inspection and photos is to document the condition of the property as it was when you started to live there. It gives you and the owners a way to keep track of what damage, if any, is caused to the property while you live there. Without an inspection, tenants and owners have no documentation to make their case for who is responsible for damage that shows up at the end of the lease.

The Move-In Inspection or Assessment

Some landlords/property management companies will conduct a move-in inspection with you. During the inspection, the landlord or staff member will walk through the property after you’ve signed your lease and note the condition of the house as it is before or just after  you move in. Usually there is a sheet or log book, something in which the inspector can make notes about anything that’s already in disrepair.

Tips:

1) Ask to present during the move-in inspection (or ask to have one if it’s not normal procedure).

2) If your landlord doesn’t use a log or inspection sheet, bring your own. There are examples all over the web or you can make your own.

3) Spend some time filling out the inspection sheet. Keep a copy for yourself and send the sheet and photos off to your landlord.

Photos

There’s a reason the cliche “a picture’s worth a thousand words” has stuck around so long. In situations like a move-in, it’s true.
You could write down on your move-in assessment sheet that the floor is dirty and the baseboard is missing, but following that up with a photo really drives the point home.

You really can’t take too many photos.

All in all, the point of being alert and doing your homework is to make sure that your understanding of what you’re moving into matches your landlord’s.

A little bit of work when you move in can help you make sure that you get your security deposit back at the end of your stay.

But wait- What happens if you’ve already moved in and haven’t done any of the steps above?

Do them now.

Documenting the condition of your home within a few weeks of your move-in is certainly better than having no proof that it was ever in good condition. Start now.

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