SOURCE: Florida Homestead Law Group

Florida Homestead Law Group

March 09, 2011 06:00 ET

Florida Homestead Law Group Offers Reasons Why Your Loan May Not Be Modified

The American Nightmare: Is Your Servicer Contractually Powerless to Modify Loans?

FORT LAUDERDALE, FL--(Marketwire - March 9, 2011) - Florida Homestead Law Group, advocates of financial responsibility and consumer rights, helps consumers understand potential reasons why their loans may never be modified, even if they qualify for one.

Unbeknownst to homeowners, servicers of residential mortgage backed securities (RMBS) may be contractually prohibited from entering into a temporary or final modification agreement, even if the borrower qualifies under President Obama's Home Affordable Modification Plan (HAMP). The main reason for this is the pooling and servicing agreement, which governs the relationship between the securitization trust and applicable servicer(s). 

"In older RMBSs it is not uncommon for the pooling and servicing agreement to provide strict limitations on the number of loans a particular pool may modify," Scott Podvin, Lead Attorney for Florida Homestead Law group, said. "The newer vintage pooling and servicing agreements allow the servicer to unilaterally modify RMBS loans whenever default is imminent or reasonably foreseeable."

Another significant obstacle that challenges the modification of RMBS loans is that servicers of securitized residential mortgage loans are generally entities with hundreds of newly hired employees. Training all these employees on how to interpret and understand the complex legality of the pooling and servicing agreements takes time and money.

"The biggest challenge of this training is in the willingness of the servicer to effectively make sure it's done," Podvin said. "Many servicers do not have, and cannot afford, enough staff members to keep up with the current demand for modifications of RMBS loans."

To learn more reasons why a loan may not be modified, or how an experienced Florida foreclosure defense attorney can help explore reasons why more loans should be modified, visit Florida Homestead Law Group at www.homesteadlegal.com.

About Florida Homestead Law Group: The Florida Homestead Law Group, based in South Florida, strives to provide client focused interdisciplinary services, resulting in a hands-on legal representation experience for all clients. The attorneys and staff are advocates of financial responsibility and consumer rights. To learn more about how the Florida Homestead Law Group can help you, visit them at www.homesteadlegal.com.

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