In a presumed effort to protect homeowners against foreclosure rescue schemes, the administration has warned:
There is never a fee to get assistance or information about Making Home Affordable from your lender or a HUD-approved housing counselor.
Beware of any person or organization that asks you to pay a fee in exchange for housing counseling services or modification of a delinquent loan. Do not pay – walk away!
The problem is that you, the borrower may have a valid claim against the lender. The HUD approved housing counselor cannot and will not advise you of your rights.
Walking away from a potential lawsuit (the foreclosure) without being informed of your rights may shield a lender from liability resulting from wrongs that the lender committed. Additionally, your will not know if you have a valid defense to a foreclosure or even an action against the lender to recover damages.
I have not found any government sponsored program that will examine the loan package and give you an opinion of whether you have a claim against the lender. Not one!
In fact, most government help agencies screen your package before it is submitted to the lender. While this may sound like a good approach, the opposite may be true if it has the effect of rejecting marginal applications. That is the difference between help and advocacy.
A lawyer will advise you of your rights, liabilities, defenses and claims. An attorney will advocate on your behalf in order to achieve a beneficial result.
Yes, you will have to pay an attorney, such as myself, for doing my job, and you will have to pay me up front because I recognize the reality of your financial position. But most attorneys, me included, will provide you with a free basic legal opinion.
Remember, most people who are reading this have already tried to reason with their lender and loan servicer without any result, or for that matter, any respect. What makes you think that times have changed? If you think that it is the Making Home Affordable (MHA) program then I believe that you are mistaken. MHA has no regulatory agency overseeing the lender’s acceptance or rejection of your application. So far, the best overseer is the court.
You read the last sentence correctly. The very thing that you may have feared the most, a foreclosure action, may be your salvation. Once a lender sees that its actions may form the basis for a defense to the foreclosure, or better yet, an affirmative claim against it for a damage award, the lender may think twice about rejecting a reasonable loan modification.