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Are Procedural Issues the Reason
Date Added: October 21, 2010 04:22:04 PM
Author: feldman
Category: Society: Crime

In the face of faltering loan modification numbers and a new monthly record set in August for Americans losing their homes to foreclosure, two of the largest lenders in the country in the country have suspended foreclosure proceedings due to questions about the validity of the associated foreclosure documents. JPMorgan Chase has suspended foreclosure proceedings on 50,000 foreclosures, due to documentation errors while GMAC Mortgage has suspended foreclosure activity in 23 states citing “procedural issues”. The 23 states where GMAC (now owned by Ally Financial) voluntarily suspended foreclosures require a court order for foreclosure. Colorado has asked to be added to GMAC’s list while Jerry Brown, Attorney General for California and Democratic candidate for Governor, ordered GMAC to cease foreclosure proceedings in the state until a legal review of their procedures can be completed. At issue in both situations are allegations that employees signed off on foreclosure-related documents without assessing the files. According to the Washington Post, one of GMAC's employees hadn't read the roughly 10,000 foreclosure documents he approved each month. That “productivity” works out to about one signed and approved foreclosure for each working minute of the day. While both lenders have admitted that there have been some “procedural” errors, the possibility looms that there is a much more sinister reason for the rapid-fire signing of foreclosure documents; the Net Present Value (NPV) test. The NPV test is a series of calculations which lenders use on each troubled property to assess their highest return resulting from actions including foreclosure, loan modification, or short sale. The formula for these calculations has never been released to the general public but plays a dominant role in the determination of whether homeowners keep their homes, hire the services of a bankruptcy attorney, or are forced to leave due to foreclosure. In the case of GMAC and JP Morgan, it’s not a big stretch to presume the possibility that the applications being processed at one per minute did not require review because the NPV had already determined that foreclosure would provide their best outcome. The biggest problem for homeowners trying to get approval for a loan modification is that they typically have no idea what the intentions of the lenders are. That situation is now changing due to the arrival of a product carrying the same information for homeowners as the NPV test provides to lenders. Known as the REST Report, the software generated assessment provides NPV information, a clear determination of HAMP eligibility, and loan modification options which can be determined prior to submission of the loan modification application. While it may be too late for the unfortunate people who have unjustly lost their homes to foreclosure, the running a REST Report can give you the information you need to get a loan modification and avoid foreclosure. Even if you have been turned down for a loan modification or are working with a bankruptcy attorney, running a REST Report can strengthen your negotiating position with your lender.For more info please visit our web site http://www.feldmanlawcenter.com/
 
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