There is one set of standard rules that pertain to all modifications:
1- There is no trial period for any negative equity homeowner. The modification is effective the month following the completion of the agreed and signed “paperwork” that should be completed within 15 business days as outlined in Negative Equity Streamlined Uniform Modification System Training and Operation Manual. All delays and exceptions to the timelines must be documented and can be reviewed 24/7 by the homeowner, authorized representative, servicer or investor on the support office systems' web based portal, as well as the option and opportunity of being able to check on the computerized daily progress and status of the modification.
2- Every homeowner is assigned their own personal referee to handled the modification process from beginning to end. The referee's are assigned by the computer system, when the homeowner applies on the individual partners servicers website or by calling a specialized 800 number to apply or inquire about the modification having the computer assigned referee input the eligibility information into the partners website. Delinquent homeowners are assigned a referee responsible for contacting them under our standard outreach and communications guidelines specified in the Negative Equity Streamlined Uniform Modificaton System Training and Operations Manual. Homeowners also have the option of applying at the numerous local certified referee locations found in every state. Our referee's are made up from the local FIRE industry professionals that have undergone intensive training to be able to aid and answer the homeowners questions. All referee's have voice mail, email and will be required to update the homeowner's call log in the computerized tracking system.
2-1 The exception to the rule is our referee's are comprised of many different nationalities and languages and if the homeowner request a change of referee to be able to speak in their native language, if the language is available the change of referee is easily accomplished and updated the same day. The website will also offer different choices of language before assignment of the referee. There is no more being transferred from person to person or not knowing who or when to call, or being able to reach anyone, our referee's are not paid until the homeowner receives a modification, with a built in complaint department that must respond within 3 business days or lose money. If for any reason, a referee can not reach or work with the homeowner, after 15 days, the homeowner is assigned a new referee with the new information sent by registered mail.
3-No homeowner is able to proceed with an applicaton if the computerized eligibility test(CET) is not passed based on the homeowners stated information found on the servicers partner website. The computerized eligibility test is the satisfactory result of yes for the four requirements, 1) owner occupied-yes 2) owned for 2 years-yes 3) is the property a 1-4 family home-yes 4) is there negative equity with a calculator to mathematically validate - yes, all inputted information will be verified and documented by the staff of Negative Equity Streamlined Uniform Modification System. There is no more stringing homeowners along because the homeowner will know from DAY ONE whether they are eligible or not.
3-1 The documents required are openly displayed on every servicers partner website. When the homeowner is accepted from CET and applies they will receive a "welcome" letter with the options of where to mail, fax or bring documents to, who and access information to their personal referee with a built in hierachy of the team leaders information listed who will be the homeowners ombudsman or resolution department. The homeowner will also receive a password to access the support office's website to track their own personal modification status and the homeowner will have the opportunity to email or call the support center for additional assistance. No homeowner will be able to "fall thru the cracks" the computer system is automatically TIMED reminding the referee that "so and so" homeowner was supposed to have doc's in, the appraised value done, ordered or back from the appraisal, etc..initiating a required response before the referee can access any other files, which is automatically emailed to the homeowner. There is no more lost paperwork, we will be using a system such as E-fax, automatically storing all faxes into a computer and logging it in daily for the homeowners computerized review.
3-2 The right to arbitration is quickly and easily available to the homeowner if the referee is not able to support the homeowners stated value with the use of an automated computerized value model (AVM). The referee will make every effort to support said value by using the lower of 2 standard AVM's. If the referee is unable to support the stated value, the homeowner has the right and option to request and pay for a drive by appraisal. The value is the only true factor considered whether the investor loses money in the modification or foreclosure. It is in the best interest of the investor to agree to a lower estimated computer verified value before values decrease further, especially if the match equity pay option is not offered ***Rationale is there is very little financial difference to a homeowner who has paid a mortgage for 5 or 10 years if they lost their appreciation and equity and are right back at the same loan to value or even lower where they started from, to them is it as if they paid a mortgage all these years with no financial benefit losing the prime capitialistic reason of owning a home. The cost of a foreclosure will exceed the investors capital if the loan to value is close to the required 80% for a modification. It will be the policy of Negative Equity Streamlined Uniform Modification System to try to support the homeowners' stated value, if a matched equity pay down option is not used. The servicer or lenders’ loss mitigation or servicing department will be responsible for issuing a final approval code accepting the modification itself and any matched equity pay option agreed upon.
3-3 With the above rationale in mind the investor or servicer also has the same right to arbitration if they disagree with the referee's computerized stated value. The servicer has the right and option to request by email a drive by appraisal.
3-4 A drive by appraisal will be ordered from a computer selected rotating roster of independent licensed appraisers at the request of the referee who is the homeowners single point of contact with the disagreeing party being financially responsible for the additional suggested fee of $200 for the appraiser, the fee has not been confirmed or requested as of yet.
3-5 The drive by appraisal will include 3 organic sales and 3 distressed sales within the last 6 months, preferably less of a time frame establishing the current fair market value as the final ultimate decision maker, there will be no further reviews, the drive by appraised value will be considered the final determination of value that both sides are obligated to agree to. If a drive by appraised value is used, the approval code is automatic. As a check and balance, every 60 days a second drive by appraisal will be done to establish accurancy of each appraiser, at NESUMS expense, the servicers have the option to review said appraisals on request.
4-The mortgage payment must be lowered or made to equal the standard interest rate offered of 3.0% which was intentionally selected because it was considered an essential component to be under the current prevailing interest rate as the basic financial incentive to accept remaining a negative equity homeowner offsetting the homeowner’s financial loss of paying a monthly mortgage payment that does not build their own equity as WAS implied and expected. The sliding scale is offerred to offset the negative equity loss by being shared between the investor and the homeowner, not to correct the homeowners capitalistic decision to purchase or refinance that loss money or has proven to be the wrong financial decision at the time. The concept is simple, you borrowed, I gave, we both loss, let's share the loss.
4-1 The homeowner must have owned 24 months and have purchased 6 months prior to the inception of the Negative Equity Streamlined Uniform Modification System, common sense for a homeowner who owns less than 2 years there hasn't been enough time for equity building to be realized (there is no longer a quick buck to be made) and instilling a six month requirement weeds out the speculators who bought to flip (owner occupancy requirements) or those homeowners who purchase a good deal (usually a REO) trying to get a better one, the recent purchasers bought knowing the housing market was in a decline.
4-2 For those negative equity homeowners who owned less than 2 years and purchased over 6 months ago , it is suggested that they wait it out until eligible to be modified or if financially unable to wait until 2 years is complete, accept a renters lease essentially a deed in leiu allowing them to remain as renters at the current fair market RENTER value for a period of 1 year. But to be eligible for the renters lease the homeowners tax returns will be required (4506T) showing the financial inability to wait until the 2 yr requirement is met. The renter's agreement and acceptance is handled by the servicer or the servicer may refer the client back to NESUMS as "eligible for an exception" offering a NESUM National Standard Modification. The object is not to turn owning a house into a socialistic right but to enforce that owning a house is a capitalistic business opportunity called the American Dream, not the American Hand-Out.
4-3 For those individuals who are can prove they are on unemployment, there is an exception to the rule, see the Operations and Procedures Manual. Basically if the homeowner has negative equity, then it is encourage to take the Negative Equity Streamlined Modification System lowering their payments before applying for any State or Federal aid existing or coming. If the unemployed homeowner has equity, the exception will be one year temporary interest payments at the 3% as payment in full to aid the homeowner in getting back on their feet. The capitalistic rule of law, is Don't pay, be foreclosed on except if you have negative equity and equity homeowners do not cost the investor to lose money. Two immediate benefits of hiring the NESUM's program is the immediate hiring of hundred of thousands employees to service the program and that as more homeowners disposable incomes are increased so does spending creating more jobs.
4-4 A negative equity homeowner would not have to file bankruptcy to save their home, they are automatically entitled to the standard national modification. The servicer is required to place an advertisement on their monthly billing statements for a period of 24 months advising that homeowners with negative equity a have a temporary right to be modified and to apply online, or call NESUMS directly.
4-5 For those negative equity homeowners in the process of bankruptcy, they are also entitled to the standard national modification. The servicer is responsible for giving a master list to NESUMS of all delinquent homeowners to contact
5-For the homeowners previously modified with an interest rate reduction, they can be converted to the standard interest rate offered for the remainder of the orginial loan term when the interest rate being paid increases to be equaled to the standard interest rate of 3.0%. The matched pay option is not available for any previously modified homeowner while receiving an interest rate payment reduction less than the uniform interest rate issued but they are eligible to be re-modified under the system when the modified interest rate reaches the "offered" interest rate of 3.0%. Common sense, if a homeowner is paying less than 3.0%, why would they want to INCREASE their payments.
6-For the homeowners previously modified with a principal reduction, there is no interest rate reduction, the homeowner does not get both financial benefits of a principal and interest rate reduction. The exception is if the interest rate currently being paid is over the prevailing rate of interest, it can be lowered to the prevailing rate of interest at time at application, if the principal reduction was not to market value. Principal reductions are losses to taxpayers , pension funds, union funds and life insurance companies not just losses to the banks. The rationale is the homeowner bought the house, not their neighbors.
7-Late payments, short sales, deed in lieu of foreclosures, or foreclosures are all derogatory issues to be reflected in the homeowner’s credit history regardless of negative equity but receiving a negative equity modification can not negatively affect the homeowners’ credit score. The servicer is required to report to the credit reporting agencies whether the homeowner made the modified payment on time or not, without the use of the term modified. The intention is to persuade the homeowner to remain a negative equity homeowner, not penalized them.
7-1 A modified payment PAID should not have acted as a partial payment involving late fees, unpaid interest, or the right to the servicer to report it as a delinquent or add it to the unpaid principal balance. Homeowners were under the impression that once a payment was modified it was supposed to be considered a FULL PAYMENT until the modification went thru but because of the propaganda and media attention of why modifications were issued, homeowners didn't have a chance allowing the banks to play " let me get your last dollar" game ruining the homeowners credit score and jeopardonizing their ability to obtain a modification. As part of the Negative Equity Streamlined Uniform Modification System the servicers are required to correct any reporting of on time modified payments made that were reported as delinquent to paid as agreed with all reporting agencies and a copy of the correction letter to be sent to the homeowner to follow up in needed. The servicers are required to train their loss mitagation department (or any specific department) to issue said letters, and to have a database set up for the request for said letters with a maximum of 90 day compliance window from date of registered letter to issue a letter or a suggested automatic INITIAL fine payable to the injured homeowner is $1000. and a simutaneous $1000 fine payable to CFPB to cover the cost of being responsible for collecting/paying said fee's and letters, if applicable as the homeowners ombudsman enforcing the settlement. It will be the homeowners responsibiilty to request the credit correction letter by registered mail as proof of the request. The fines increase every 90 days, $1000, $10,000., $25,000. $100,000..
7-2 Any homeowner previously modified with the partial payments and late fees added to the outstanding balance is eligible to be remodified under the program as well as the right to receive the above letter correcting the derogatory items. The NESUMS's welcome letter, issued after a request for a modification has been made, will inform the homeowner of the right to the credit correction letter and include a form letter explaining how to apply for the credit correction letter.
7-3 Any homeowner previously denied a modification with negative equity that still owns and resides in the properity is eligible to be modified.
7-4 Any homeowner denied a modification with negative equity from the start date of HAMP that was foreclosed on and no longer resides in the property is entitled to the suggested automatic fine of $5000. payable to the foreclosed homeowner for the the loss of their right to a modification. The suggested fine to the homeowner is only payable if proof is submitted to CFPB that a modification was applied for and denied, and the homeowner did not play the "free rent game". Rationale is if the homeowner with negative equity applied for a modification. was denied and MOVED instead of living in the house for months for free, they are entitled to be paid for the financial disadvantage they were placed in, similar to cash for keys. If the homeowner never applied for a modification or applied to just lived for months on end rent free, they intentionaly strategically defaulted receiving their financial compensation in free rent. The second rationale without a regulator to oversee that the new standard procedure and penalty is enforced, the banking industry will not amend their ways. The homeowner is responsible for applying for the fine with a request, possibly downloaded from the CFPB's website stating that the penalty is not payable without written proof of the application and denial from the servicer, phone calls inquiring about a modification is not sufficient proof.
7-5 Any homeowner with equity that applied or tried to apply for a modification under the belief modifications were for affordability purposes and was denied for not having a +NPV but still owns and resides in the property will be entitled to receive a temporary modification offer by calling A specialized 800 number of NESUMS for the exception: the modification will be one year of lower payments at the same 3.0% interest rate offered to negative equity homeowners as the FULL payment due as the automatic penalty for engaging in Unfair and Deceptive business practices and gross misrepresentation. The rationale is homeowners with equity had the capitalistic solutions of refinancing or selling that were taken away from negative equity homeowners but according to the lies being published about modifications, they thought they were entitled to a modification. No homeowner is entitled to a lower payment or principal reduction because they can't afford a capitalistic product.
7-6 Any homeowner with equity that applied for a modification for affordability purposes and was denied in writing for not having a +NPV that was foreclosed on, is entitled to receive the total amount of monetary difference between the payment they were required to pay and the lower interest rate payment offered for the temporary modification for a period of one year because they never had a right to be modified except for the mistaken belief they did and their capitalistic solutions were never taken away of selling or refinancing. The homeowner will have the right to apply for the money directly from the servicer with the CFPB overseeing them.
7-7 Any homeowner with equity that did not apply for a modification but is in foreclosure will be offered the temporary modification for one year, hopefully putting the homeowner back on their feet for the same reasons of misrepresentation and unfair and deceptive trade practices. The exception to the exception rule is if the homeowner states they can not afford the payment or misses one month payment and the following months grace period before a payment is made, the foreclosure process can be automatically re-started.
8- All foreclosure proceeding are stopped for a modification to be offered and processed, there is no dual or parallel foreclosure processing allowed. All collection attempts, motion to stay, and foreclosure or trustee's sales are stopped while NESUMS contacts the client.
8-1 To adopt to the new rules, all foreclosures and related activity are stopped for a period of 60 days, a FORECLOSURE MORATORIUM allowing sufficient time to provide the servicer and the courts with the results of some of the National Standard Modification Eligibility Test Result Form (NSMET), showing the homeowner was eligible and received a national standard modification or the homeowner refused.
8-2 Going forward, since no foreclosing proceedings can occur without NEMET form the servicer does not benefit from dual processing, BUT if the servicer attempts to continue the process and paperwork part of the foreclosure process without having the necessary paperwork, the NSMET form, from the Negative Equity Streamlined Uniform Modifcation System, the homeowner is automatically eligible for a $10,000 principal reduction from the servicer and a court ordered automatic referal to the NESUMS system. It will be the Attorney Generals responsibility and obligation to inform the court system of the requirement of a NEMET form before a foreclosure may proceed with the automatic fine of $10,000 payable to the courts by the foreclosing attorney, for trying to bypass the rule. There are no exceptions, the servicer does not make out on what is better for THEM continuing the current system. There is one set of rules. Rationale is to protect the investors financially from the servicers conflict of interest, the investors benefit from a modification not a foreclosure and if the servicer and attorney has to pay the $10,000 fine each they will amend their ways.
8-3 The servicer /investor will be notified of the homeowners’ intent to be modified with our Request for Outstanding Mortgage Balance Confirmation Form (ROMBC) stopping the “clock” that restarts after 30 business days enabling the homeowner sufficient time to realistically decide to be modified instead of being foreclosed on. There are only two homeowner outcomes, the homeowner accepts the modification, the loan is classified a performing loan reducing the banks capital reserve requirements or the homeowner refuses to be similarly modified and a foreclosure occurs within a reasonable time frame eliminating the “free rent” game, instilling the rules of CAPITALISM. The ROMBC form is not sent unless the homeowner passes the four requirements of the eligibility test
8-4 Before the foreclosure clock restarts, the homeowner and the servicer will receive a NSMET form stating the homeowner refused either the NESUMS modification or the temporary modification, the homeowners copy will be sent by registered mail. In cases where the homeowner refused either modification for personal or financial reasons, the drive by appraisal will be ordered for the servicers benefit in determining the appraised value for listing purposes after the foreclosure occurs at NESUMS expense.
8-5 The exception to restarting the foreclosure clock will be for miltary personnel, they will be referred back to the loss mitagation department of the servicer for complaince within the law. A copy of the referal will be sent registered mail to the Armed Services member.
9- In the event, there is a private mortgage back pool or investor that has NOT issued one modification establishing a PRECEDENT with that FIRM and the servicer has not signed as a participating agent with HAMP and does not wish to participate in the National Standard Modification, the government will purchase the entire "toxic" POOL for the current distressed purchase price of 20 cents of the APPRAISED VALUE DOLLAR under the Eminent Domain Rule, there is no longer the option of "picking and choosing"the homeowner or the pool, (MBS), there has been an industry wide change made that affects almost any homeowner who purchased or refinanced within the last 8-10 years making the homeowner legally entitled to a modification due to the change in the standard operating procedure when negative equity is involved, it is a manner of public importance.
9-1 The trustee gets to choose to modify eligible homeowners under the Negative Equity Streamlined Uniform Modification System or to sell the entire pool to the government if the above condition of not participating was met, except if any branch of the government supplemented any entity, branch, division, holding or subsudity with funds including TARP FUNDS or the taypayers money/funds was used directly or indirectly, connected to or invested in the pool including the tranches such as, an civil servants association, city, state. federal funds, unions, the public's pension fund or life insurance fund or any government owned or taxpayer subsudized agency or entity, then the automatic ONLY choice is the National Standard Modification, the Negative Equity Streamlined Uniform Modification System.
10-Once the Negative Equity Streamlined Uniform Modification System has commenced any homeowner who defaulted on a mortgage outside of a provable medical reason is disqualified from obtaining a new mortgage from any GSE for a period of 7 years. *this rule may appear to go against the immediate and future supply and demand theory but the intention is to reduce the supply inventory with this penalty not to reward a negative equity homeowner by being able to purchase a lower price home with a lower mortgage payment within a similar time span that accepting a negative equity modification would accomplish.
11-The modification is issued on the outstanding principal balance including up to a maximum of three months of past due accrued interest payments plus any advances paid for escrows of real estate taxes and/or homeowners insurance included in the modified loan balance with sufficient proof (receipt) they were paid as well as the initial fees and charges involved with setting up an escrow account, if applicable. All payments must have been applied to principal and interest before any other charges were paid. Servicers are required to correct any incorrectly applied payments or any incorrectly reported payments due on the NESUMS form ROMBC, the completed form will be sent to the homeowner to confirm or disagree with the payments and it's history, the suggested automatic fine is $10,000 payable to CFPB with the same automatic reduction to the homeowner's outstanding mortgage amount if the servicer is found to have a pattern or practice of not being in compliance with this issue.
11-1 The necessary exclusion for not including any additional accrued interest payments above the three months in the modified loan balance is simply because the financial benefit involved in accepting a negative equity modification will be canceled out; since it does not make financial sense for the homeowner to substantially increase their own outstanding balance increasing the negative equity involved when the financial benefit to be foreclosed on is greater. Instead the difference in the number of months since the homeowner last paid their mortgage and the three month add-on is added to the term of the mortgage loan, homeowners are not rewarded for not paying their mortgage, penalizing those homeowners who have continued to pay with receiving less of a financial advantage.
12-1 A compromise has to be reached in that Any and all accrued interest payments above the three months is delayed , basically "forgiven" and the amount delayed should be allowed to be taken as an investor/servicer* loss for tax purposes in the year given to encourage the back log of seriously delinquent negative equity homeowners that exist to accept a reasonable and fair modification within the rules of capitalism. The ability to delay the “past due interest” is only available to those homeowners currently more than 90 days delinquent at commencement of the Negative Equity Streamlined Uniform Modification System. After the commencement, any homeowner who goes more than 90 days delinquent before foreclosure proceedings are started, any past due accrued interest longer than 3 months is forgiven at the expense of the servicer and not allowed to be taken as a tax deduction, since it is and was the servicers job to attempt to resolve the issue by modifying the homeowner prior to an investor losing money.
12-2- A maximum of three months late payment fees may be incorporated in the modification or in the event of a foreclosure occurs. All additional fees are waived as a penalty to remove the built in conflict of financial interest involved with delaying a modification or foreclosure that was the servicers’ job and responsibility as the "steward” to perform in the investors’ best legal financial interest. This rule is to speed up the foreclosure process eliminating delays after the homeowner was given the option and chance at modifying.
12-3 The exception is for the existing seriously delinquent homeowners who are being offered the modification with the “delay ” clause, up to one half of the postponed month’s late fees may be charged due to believing the income was being earned by industry standards if sufficient proof can be satisfactorily supplied that the servicer and homeowner were in an active "negotiation status”, not just waiting it out.
12-4 -If the homeowner refuses to be modified, they will be contacted by the team leader to re- verify the refusal of a national standard modification, ending the concept of obtaining a "free house" and the "free rent" game before informing the servicer in writing on the NSMET form of the homeowners refusal, restarting the foreclosure clock. The NSMET form establishes the agreed upon payment due to NESUMS.
13- Any prepayment penalties are waived.
14-Any additional fees or charges performed by outside 3rd party bills/invoices must be submitted on the Request for Outstanding Mortgage Balance Confirmation Form (ROMBC) to be included in the modification and they must be deemed reasonable and customary according to industry standards. The servicer will be required to attest that the outside 3rd party invoice is not related by being a subsidiary or parent of their company or any fees were shared/spilt for the bill to be incorporated, if the invoice is “related” to the servicer, the fee is automatically reduced to the lowest end of the industry standards.
15- If there is MIP or PMI, currently being paid the modification will continue the monthly insurance payment charged for the “intended” original term agreed to, not extend the length it is being paid for because of the negative equity. The servicer is responsible to verify if PMI or MIP is being paid on the Request for Outstanding Mortgage Balance Confirmation Form. The MIP or PMI Company will remain responsible for the agreed on insurance loss to the investor with the continuation of the mortgage insurance premium being paid. If a homeowner who is not currently paying PMI or MIP is eligible for a modification, there is no PMI or MIP required.
16- Expecting negative equity homeowners to pay a processing fee to be modified should have been a necessary psychological requirement equivalent to skin in the game but it is not what occurred. The blunt of the cost of modifying was placed on an industry that wasn't prepared or experienced as a result of the rules changing in the middle of the servicing game by the volume of modifications required creating chaos and anarchy with no clear, concise or transparent rules. Every lender, investor and mortgage pool has different rules and guidelines BUT it was up to the government and their regulators to ensure that fairness and equality were present with a National Standard Modification for all servicers to follow when TARP and the Servicer Safe Harbor Act were enacted. IT IS NOW UP TO THE PRESIDENT TO ENFORCE THE LAWS BY CREATING A NATIONAL STANDARD MODIFICATION SYSTEM FOR SERVICERS TO FOLLOW. Rationale is that the government with the GSE's obviously have a conflict of interest , they received the Negative Equity Streamlined Uniform Modification System proposal in early 2009,(that all seven regulatory agencies received and have adopted parts of ) but their written response was "we are looking into other avenues for our shareholders". The GSE's went into conservatorship, why are the taxpayers paying bondholders for their capitalistic decisions? Second It is obvious that asking the banking industry to do the right thing and comply with the law voluntarily or by signing consent orders will not stop the abuse and the financial damage to homeowners, only the guarantee of massive fines will.
16-1 The government and Wall Street understood that negative equity homeowners had to be financially inticed to remain a negative equity homeowner because owning a negative equity home is a capitalistic financially losing proposition, the key word is capitalistic. The idea behind lowering the mortgage payment was to make the payment more feasible not affordable increasing the negative equity homeowners psychological attitude connected to “Pride of Ownership” of responsibility, accountability and obligation by the financial incentive, benefit, compensation, advantage of a modification enabling the negative equity homeowner to "save face" for remaining a negative equity homeowner when it would be financially benefical to default instead.
16-2 The creation of Strategic Defaulters is a direct result of the current system of modifying. Research has shown that one out of every four defaults are from people who can afford the monthly payment but owning a negative equity home is a losing financial proposition for anyone with negative equity. The researchers admit that the number is most likely higher because what negative equity homeowner would openly admit that they defaulted on purpose opening themselves up to legal and financial problems, example deficiency judgements.
16-3 Because OVER 6 million modifications were issued for free, there is really only one option after reading the copyright of the bottom of this page, The U.S. Treasury pays the modification fee directly to Negative Equity Streamlined Uniform Modification System from the TARP funds, the intended purpose of said funds, if all 11 million negative equity homeowners accepted the National Standard Modification the cost would be 22 billion dollars. And if industry experts are correct about housing values decreasing the cost to modify all existing and future negative equity homeowners would still be less than the remaining TARP funds.
17- I am not an attorney nor will any member of my staff be responsible for the confusion, legalities and technicalities surrounding MERS and robo-signing but common sense dictates that:
17-1) the homeowner was not financially harmed by a break in the chain of title but it is up to a court of law to decide if the homeowners constitutional rights were and what the appropriate fines and penalties will be. So far their views have been very different, but they are leaning toward homeowners as a matter of general public importance and the financial industry is not exempt from following the rule of law, example Nevada, Massachuettes, New York, Vermont and any others not mentioned. MERS had become the standard and common operating procedure of acceptable "mortgage assignments" in the mortgage industry, there was a general knowledge that the practice was a way to save the investors money instead of paying it to local reporting agencies as intended.
17-2 Without admitting any liability, or wrongdoing of whether the act was intended, unintended, or just applied because of normal business operating procedures as a necessary part of the Negative Equity Streamlined Uniform Modification System proposal an agreement should be reached with all local recording agencies of NACRC and IACREOT that the suggested predetermined flat recording fee of $250. is to be paid to the individual local recording agency for each Master Assignment Form of NESUM recorded , reimbursing the parties who were financially harmed from the use of MERS as the full payment for recording the Master Assignment Form. There is no financial reimbursement to the homeowner for the use of MERS, they always had the right to sell their home without question.
17-3 The Master Assignment Form includes a guarantee given to the homeowner from the current investor and their trustee, if applicable for any future discreptancies that may arise from another note holder claiming ownership of an originial note, that is included in the modification form and recorded.
17-4 If the homeowner agrees to the modification any break in the chain of title is mute, they are accepting who the owner of the note is with the written guarantee that the note holder is the actual holder of the note and has the right to issue the modification or foreclose. The servicers legal department will prepare a template statement that the homeowners' signed recorded modification papers take the place of any misplaced or lost original mortgage notes and any unrecorded assignments clarifying and reaffirming the CURRENT validity of the note’s ownership eliminating any questions about chain of title issues to expedite any future foreclosure on the Master Assignment Form.
17-5 The excuse of the homeowner didn't pay their mortgage because they didn't know who was the actual holder to the note is weak, most people know who they owe money to or at least the last party they paid it to, whether there is a break in the chain of title that the homeowner didn't or doesn't know about does not excuse the homeowner from paying what he owes, regardless of any issue surrounding his constitutional rights.
17-6 If there was equity involved , the homeowner NEVER LOSS their right to sell or refinance without restriction to the mortgage note from a lapse in the chain of title. Homeowners not applying for a modification or going thru a foreclosure, must apply directly to their servicer for the guarantee, if desired, they will have a period of 2 years to obtain said guarantee. The servicer is expected to have a separate division to handle the requests with all suggested recording fees paid for by the AG's Settlement Fund for the guaranteed to be recorded. The CFPB is responsible for ensuring the issuance of any requested guarantees, the automatic fine starts at the suggested sum of $1000 payable to the CFPB to cover the cost of expenses for non complaince if the guarantee is not issued within a 90 day window from a request. There is no excuse for not issuing a guarantee, since the holder of the mortgage "believed" that MERS had a legal right to foreclosed. Any homeowner who has paid off their mortgage or does not have a mortgage should not require a guarantee, but if there was a previous mortgage on the property and the satisifcation of mortgage has not been recorded, the homeowner can request the guarantee with the recording of mortgage satisification from their last servicer with a second resort of the CFPB. The cost to cure for an estimated 32 million homeowners within the MERS system would be 8 billion dollars PAID INTO THE STATES LAND RECORDING AGENCIES from the AG settlement Fund if the suggested flat rate of $250 was obtained.
17-6 With the above system in place, robo signing will automatically stop due to two reasons, 1) no foreclosure may take place without a NEMET form showing the owner was eligible for a modification, permanent or temporary or the automatic fines comes into play and
17-7) if the amount shown of the foreclosure papers is incorrect and correctly contested by the homeowner, there is an automatic $10,000 penalty paid by the servicer plus the amount of "arrears" charged to the homeowner including any late, processing or junk fees, payable to the court as well as the same amount payable to the homeowners outstanding mortgage balance. Make the penalty severe enough, the servicing industry will amend their ways by REALLY double verifying the information with all employees signing in ink that they personally verified the information with a two year payment history attached that is easily read by the layperson and sent to the client for review 30 days prior to any foreclosure date. Prior to the foreclosure, the homeowner must receive the right to contest any errors in the amount due by registered mail in easily read terms with the understanding THAT NO ACTION ON THEIR BEHALF SIGNIFIED THAT THE AMOUNT DUE IS CORRECT AND THAT ALL IT WOULD TAKE TO CONTEST THE AMOUNT IS A REGISTERED LETTER BEING RETURNED TO THE SERVICER IN A JUDICAL OR NON JUDICAL STATE WITH A COPY TO THE CFPB.
17-8 Going forward the horror stories of "clerical mistakes" made from robo-signing will not be tolerated , examples foreclosing on wrong house or a house that the servicer/investor does not have a mortgage with or was paid off. The automatic penalty is twice the dollar amount of the value of the home minus any true outstanding mortgage and the reversal of the foreclosure at the "employers of the employee making the mistake" expense to the homeowner. If the home has been resold, the penalty is three times the fair market value minus any true outstanding mortgage. Make the penalty severe enough and the "errors" will stop. The servicer is expected to maintain a separate division for such complaints with a computerized dated system showing complaint, resolution and the payment to the homeowner within a 60 day timeframe from the certified mailing of the request for correction. The Office of the Comptroller of the Currency has the right and responsibility to periodically, MONTHLY at the minimum go in to the computer system to verify compliance. The homeowner has the right to hire an attorney to defend the above, with the attorney fee's being paid by the EMPLOYER of the employee who signed the accurancy of the foreclosure papers.
17- The exception to the normal course of business is if the loan was orginated in a non recourse state, it WILL remain or return to a non recourse loan, regardless of whether it was a purchase or a refinance, the object is to encourage negative equity homeowners to remain negative equity homeowners
18- All negative amortization stops at the time of the modification.
19- A new second mortgage or line of credit is not allowed to be obtained on any modified loan; a refinance must take place for any second mortgage to be obtained.
20- Second Mortgages--All second mortgages have the same legal right to be modified. All homeowners have the right to be simultaneously modified for both mortgages under the standard uniform modification guidelines with one exception: BOTH investors’ sliding scale match equity pay is proportion to the negative equity involvement per a pre-arranged chart that does not penalize or wipe out the 2nd mortgage holder. * No first mortgage can be modified without the second mortgage also being modified protecting the 2nd mortgage holder.
21- There is a reverse investor sliding scale equity sharing on any future appreciation above the modified mortgage amount for the first 10 years, if a matched equity pay was involved.
22- Selling the note to a "debt" purchaser does not eliminate or change the note holders obligation under the above rules stopping the "double dipping" practice harming homeowners. There are no deficency judgements allowed with a sold "debt" and the new holder of the "debt" is obligated to all above rules.
23- Deficency judgements will only be allowed for the following scenarios, it is an all or nothing process, there is no longer picking and choosing allowed, one rule for all:
23-1 A deficency judgement is allowed when the negative equity homeowner was offered a modification and refused unless dismissed by a bankruptcy court. Stops strategic defaulters, not negative equity homeowners who really can't afford the home with a modified payment by allowing them a "clean slate" with a bankruptcy.
The individual servicers’ offer to modify negative equity homeowners is limited to 24 months and ends on the anniversary of joining the Negative Equity Streamlined Uniform Modification System reverting back to the standard capitalist operating practice and procedure of “if you don’t pay, you will be foreclosed on”.
All ownership and origination rights and interests in the uniqueness, such as the guidelines, rules, penalties or sliding scales of the Negative Equity Streamlined Uniform Modification System are protected by the certified mailing of the proposal through the United States Postal Service. Any use in whole or in part of any component(s) of the system entitles the Negative Equity Streamlined Uniform Modification System to the full standard modification fee per each use- unless prior written permission has been granted to be used in part or in full of the Negative Equity Streamlined Uniform Modification System to any lender, servicer or for the governments modification system or process. In the event the need to prove proof of ownership arises of mailing the proposal out to multiple lenders, servicers, organizations and the U.S. government, the above action shall constitute such proof of ownership and authorship.