State Senator Works To Help Staten Island Residents Save Their Homes
More than 2,000 Staten Islanders are behind on their mortgage payments by at least a month, with some as much as 60 days delinquent and headed down the path toward foreclosure. Now, on February 24, 2008, a unique opportunity is going to allow those people to meet directly with banks to discuss ways to save their homes.
“Operation Protect Your Home,” co-sponsored by State Sen. Diane Savino (D-North Shore/Brooklyn), is part of a citywide effort launched by the state Senate Democratic Conference and New York Banking Department.
“A lot of people are embarrassed and not willing to come forward, or they hope they will figure a way out of the mess,” said Ms. Savino. “Our message is it’s not going to go away and here is a chance for them to take control of the situation and sit down and have an honest financial work-up with the lending institution. At the end of this process, we want to see as many of these 2,031 families assisted in whatever way works for them.”
Eight lenders will be attending the workshop, to be held at the College of Staten Islandfrom noon to 8 p.m. in the college gymnasium. Those lenders include Chase, Citibank, EMC Mortgage, Home Loan Services, Option One Mortgages, Regional Capital (GMAC), Washington Mutual, Wells Fargo, and Wilshire Credit Corporation.
Those banks identified for the Democratic Conference just how many delinquent loans they hold in each of four boroughs. On Staten Island, the number of mortgages delinquent for 30 to 60 days totaled 2,031. In the Bronx, the figure was 2,854; Brooklyn, 8,114, and Queens, 9,574.
“On this day, not only will you be able to address your concerns directly with your mortgage lender or your loan servicer, and possibly begin to agree on new mortgage terms, you will also be able to meet with HUD-approved housing and credit counselors from all over New York City to receive assistance in keeping your home,” claims the invitation sent to over 2,000 Staten Island residents.
The help comes at a key time. A monthly report produced by the State Foreclosure Prevention Working Group, a multi-state task force that includes the New York Banking Department, found that seven out of 10 seriously delinquent homeowners across the United States are not on track for any help from lenders, largely because of a lack of interaction between mortgage servicers and homeowners.
The Richmond County Bar Association is in the process of incorporating The Richmond County Bar Association Volunteer Lawyers Project to help people with predatory, subprime loans. Rather than asking individual lawyers to take on such cases and risk liability, the bar association believed it was best to incorporate an organization to work on such lawsuits.
This initiative, though a bold one on paper, fails to take into account the fact that the mortgage servicers have only limited control over the ability to restructure loans on the spot. The process of loss mitigation, as the process of avoiding foreclosure, is a long one that involves significant paperwork and, ultimately, approval by the servicer after ensuring compliance with the agreement that governs how the servicer acts towards borrowers.
This agreement, called a Pooling and Servicing Agreement, is a complex one. When a mortgage loan is made, it is usually transferred to a trust and securitized; from that point on, the loan is serviced in accordance with the applicable loan documents and the Pooling and Servicing Agreement (PSA) for the trust. The PSA governs the allocation and distribution of loan proceeds and losses to the bondholders. It also describes in detail how the loans are to be serviced and includes guidance to ensure that the trust continues to comply with the REMIC provisions of the tax code in order for the trust to maintain favorable tax treatment. This allows for standardization of practices and procedures.
All servicers are required to act in accordance with the “servicing standard” as defined in the applicable PSA. So if a borrower comes to a mortgage servicer with a problem, that servicer is required to review the situation in light of the PSA - they have no real control over how the loan is treated, they merely follow the rules laid out for them.
The upshot is this - if you are a borrower looking for help from a mortgage servicer, be prepared to work hard and endure no small amount of effort in getting the deal done. Don’t expect to sit down with a representative
Source: SILive.com
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