Loan Modifications – How Banks Dupe Homeowners

I’ve repeatedly expressed my frustrations with the loan modification process, or lack thereof, on this blog.  Honest, well-intentioned homeowners cannot get a bank representative to communicate with them.  Many such homeowners were actively induced to default, purportedly to become eligible for a modification that, in my experience, never arrives.  Even in those rare instances where a loan modification is offered, it’s typically not a meaningful modification – the homeowner is essentially making the same monthly payment that he/she was paying all along.  What does that accomplish?  What’s the point? 

Unfortunately, it’s even worse than that.  As this article illustrates, banks often want homeowners to enter a modification just so a subsequent foreclosure will be easier for them!  I’ve seen this often enough that I feel comfortable opining:

Banks aren’t offering modifications to help homeowners – they’re offering modifications to help themselves!

Lest you disagree, consider the loan modification agreement that just came across my desk.  Like most modifications I’ve seen, three aspects of this agreement are just brutal for homeowners:

1)  All foreclosure defenses are waived.  Under most loan modification agreements, if a homeowner signs, then defaults on the modification agreement, the homeowner agrees that all defenses to foreclosure are waived.  Essentially, if the homeowner defaults on the modification agreement, the bank can dribble up to the basket and slam-dunk a foreclosure without opposition. 

“But the bank doesn’t own and hold the Note,” you argue.  Maybe so, but since the homeowner warrants otherwise in the modification agreement, the homeowner is barred from challenging the bank’s standing after defaulting on the modification agreement (or that’s what the bank will argue, anyway). 

What does this mean?  Essentially, the homeowner takes what may be a very defensible foreclosure case – one where the bank may be unable to prove it owns and holds the Note and Mortgage – and turns it into an easy case for the bank by signing a modification agreement.  In my view, the banks are offering modifications to make it easier for themselves to foreclose!  It’s a one-sided agreement – for the banks! 


With this in mind, if the modification agreement doesn’t entail a significant reduction in payments, what’s the point?  In my view, modification agreements generally aren’t a good idea (the way they’re currently set up) unless the homeowner is absolutely certain that he/she can make the requisite payments indefinitely into the future.  After all, once you default on a modification agreement, chances are it’s “game over.” 

2)  The foreclosure lawsuit remains pending.  In most lawsuits, when the parties enter a settlement agreement, the lawsuit is dismissed.  Sometimes, the suit is dismissed with a court order that reserves jurisdiction to enforce the parties’ settlement agreement, but this is standard fare – lawsuits are dismissed when the parties settle.  Unfortunately, that’s not how it works with loan modification agreements in foreclosure cases.  To illustrate, the modification agreement in my hands says “The Lender agrees to suspend all foreclosure activities so long as I comply with the terms of the Loan Documents.”  Hence, if the homeowner defaults – or if the Bank asserts the homeowner defaults – all the Bank has to do is resume prosecution of the existing foreclosure lawsuit, which remains pending.  It doesn’t matter if the default occurred six months after the modification or two years – all the bank has to do is resume the existing foreclosure case.  And since the homeowner has waived all defenses, obtaining a foreclosure judgment truly is the equivalent of Shaq dunking the ball on an 8-foot basket without any defense. 

(Judges, I respectfully submit you should do something about this.  How many pending cases are on your dockets where nothing has happened because the parties agreed to a loan modification but the bank refuses to dismiss?  I’d suggest an Administrative Order that requires dismissals of foreclosure lawsuits where the parties enter a Loan Modification Agreement.  There is no reason for cases to remain pending for months or even years when the parties have amicably resolved their dispute.) 

3.  The bank makes no representations whatsoever.  You know what scares the heck out of me with these modification agreements, more than anything else?  The bank that is receiving the money does not make any warranties or representations whatsoever – not even a representation that it is the rightful owner and holder of the Note and Mortgage!  Lest you think that’s “no big deal,” consider this.

We all know that most Notes and Mortgages have been transferred or assigned from one bank to another, many times over.  Often the banks don’t know who owns/holds the Note and Mortgage, much less prove it.  If the Bank you’re entering a loan modification with does not represent, in writing, that it owns and holds your Note and Mortgage, then what’s to stop another bank from emerging, months down the road, and suing you for foreclosure on that same Note and Mortgage?  Unfortunately, absolutely nothing.  That’s why, if it were my client, I’d require the bank to sign the loan modification with a written representation that it owns and holds the Note and Mortgage and is the party entitled to collect mortgage payments.  I’d also demand to see the original Note.  Without these precautions, my clients may be handing out money to an absolute stranger – one with no right to collect – and with what I know, that’s not a risk I’d feel comfortable recommending. 

But even that’s not good enough.  In addition to this representation, I’d want the bank to indemnify my clients from any losses they incur as a result of another bank making a successful claim on that Note and Mortgage.  In other words, if another bank sues my client for foreclosure, after the modification agreement, the bank that modified with us should bear the losses, not my clients.  To ensure the bank would be able to foot this bill, I’d also want some financial disclosures, especially if the bank was one I’m not familiar with. 

In sum, if you’re a homeowner facing foreclosure and the bank is offering you a loan modification, I’d be very careful about what you’re getting.  Read the fine print closely.  If your payments aren’t going down significantly, you’re waiving defenses, the foreclosure lawsuit remains pending, and the bank isn’t making any written representations, chances are the modification agreement is designed to help the bank, not the homeowner. 

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70 Responses to Loan Modifications – How Banks Dupe Homeowners

  1. Pingback: Stopa Stomps on the Loan Mod Lies – Loan Modifications – How Banks Dupe Homeowners « Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge




  4. Name *CAROL ALVEY says:


  5. Name *CAROL ALVEY says:


  6. Natalya says:

    We went through the Loan Modification with Wells Fargo, it took more than 1 year, eventually we HAVE to sign Modification Aggreement that did not reduce our monthly payments for a penny as we do not want to loose our house. We ended up with the same monthly payments and increased loan amount. What we can do and what options we have to fight the bank?

    • Mark Stopa Mark Stopa says:

      This is just the sort of scenario I spoke about at my recent seminar. Anyway, I see two options: (1) bankruptcy and foreclosure defense (Stopa Law Firm can give free consultations on both) or (2) defend your foreclosure case with a competent foreclosure defense attorney and hope the bank eventually agrees to a meaningful modification.

      I realize neither of those options seems ideal, but as you’ve seen, banks are typically not giving meaningful loan modifications, so that really limits your options. If you defend your foreclosure case, hopefully it reaches the point where the bank will modify. If not, you may be looking at bankruptcy, saving your money, and starting fresh.

      It’s more involved that this, but this is the short version.
      Give us a call; we’ll be happy to help 888-450-1549


  7. joann says:

    After all the unsuccessful attempts to modify loan for primary home and try to short sale second home (both in fl), I ended up doing chapter 13, signed a mod for primary home which only included escrow and not reduced rate or payment! just to keep it out of foreclosure; second home still in process to foreclosure, but I have good tenants in there. My goal: can the tenants stay there and still try to short sale? Primary home loan mod, how can I get to re-negotiate the rate if possible? I went to see another attorney, he was not helpful. he sent me back to the bankruptcy attorney, which I already contacted to fax a letter to the lender so I can talk to them and try to negotiate. but after reading your info I am very skeptical of doing anything. Please help. Thanks

  8. Denise says:

    Me and my husband feel behind on our mortgage last year. We tried to do the lona mod. but were denied because or income had gone back to normal. Husband was receiving 40 hrs. Told we didnt qualify. Was told that the best thing to do was to send money as we can and that money would build in our escrow and as soon as a full monthly payment wasthere they would apply this to our load. This was going great till I started having medical expenses. Then Things just started bouncing left and right. We fell more behind. We tried to send in payments last month by check and this month by money order. But they have sent the money orders back. Stating that the amount wasnt enough to basically make them happy and stopped excepting payments. I am worried about losing my home. Is there help out there for us?

  9. Todd says:

    Mark – I made the mistake of draining my retirement savings to keep up on payments in the hopes that things would improve. Now, my savings are gone and I’m still in the same boat – facing possible foreclosure and ultimately bankruptcy. It’s too late for me but what is your advice to people in this regard? Also, I thought I saw a one-time low fee for foreclosure defense help somewhere on your website – what is that fee?

    • Mark Stopa Mark Stopa says:

      I hate to see stories like this. Please spread the word – make sure other homeowner don’t make this same mistake.

      I don’t like giving “blanket advice” in columns like this, as everyone’s situation is different. That said, rarely is it a good idea, in my view, to deplete 401(k)s or IRAs to pay a mortgage … basically for the reason you describe, i.e. once the retirement money runs out, you’re still stuck in the same boat, only this time with no retirement money. Plus, the law is set up to help people these funds – judgment creditors can’t take IRA or 401(k) money and you don’t lose these monies even if you have to file bankruptcy.

      Call 888-450-1549 and we’ll give a free consultation for your foreclosure situation, including a fee quote. Thanks.


  10. Curious Folk says:

    Dear Mark

    So if I am reading this right, if u did get a loan mod and could not afford the payments, you can not fight the foreclosure in court once you’ve been served a notice of foreclosure.

    My loan mod is signed by the same person representing the lender and MERS.

    Your response is appreciated.

    Thank you

  11. Jody Bompartito says:

    In June, 2010 I was two payments behind, I called Chase bank and asked if they could move the two payments at the end of the loan and let me get caught up. They said no and stated they wanted to modify my loan. I was told to pay $1400 a month till modified.. I didn’t hear and was not receiving any statements for my mortgage. I called every two weeks and in August they mailed me back $2300. I called and asked why and they told me that the $2300 was not suffient enough and I was $11,000 behind, and told me to get back in good graces I should send half the money ($5800) and I was to send it Western Union directly into there account. Then $2800 a month till caught up.. Once again I haven’t received any statments. When I called again to find out about the money they said it was in a holding account… Now I find out that they sent it back to Western Union ($13000).. and I’m not sure where the $13000 is. When my wife called to find out why they sent it back she was told they want to modify the loan.. I do not want the loan modified I want them to keep the money and apply it the mortgage and not in a holding account and let me pay what is behind. I need help desperately with this bank.. I am hoping that you will be able to PLEASE call me and let me know if you can help me solve this problem…
    Your immediate attention to this matter will greatly be appreciated…
    Thank you!!
    Jody Bompartito

  12. Gary Carpenter says:

    Hi Mark. I left you a voice mail but figured that I’d send you a note on our situation. We are behind 12 months on our mortgage. We tried working with our bank when we first started to fall behind (due to income) and had no luck. We then learned from a friend how he worked with another attorney (Authur Gundling) who had an office set up for loan mods. Our friend was successful working with Authur and got a principle reduction and a interest reduction. We decided to check it out. Lou Silver is the one we met with and talked with during the first meeting where we did sign up with the attorney backed loan mod office after being assured of there services with a money back guarantee. But the guarantee and the relationship was short lived cause they closed their doors 3-4 months later. They did claim to send in a loan mod package to out lender but our lender says they never recieved it so who knows the truth. We feel robbed since we got nothing for the fees we paid. Tried working with the bank again and long story short they denied a loan mod based on out debt to income and they were still counting our credit card debt and other debts we are going to file bankruptcy on. We just got a letter from our lenders attorneys (dated 1/25/11) with warning that they are going to move forward with foreclosure in 30 days and that we should call our lender cause they still want to work something out. We did call our lender but we are playing phone tag with each other. Not so sure we want to work it out with our lender anymore. We look forward to speaking with you in more detail. We called the 888-450-1549 and left our phone numbers on voice mail.


    Gary and Michelle Carpenter

  13. pam says:

    thanks for this excellent blog. I have been in a trial modification for three months and it will expire at the end of this month. I anticipate defending a foreclosure suit and am seeking an attorney who will provide me the best chance of success. My questions are this:
    I realize all cases are different. What makes one more “winnable” than the next?

    What are the successful defenses achieving? I realize many cases are dismissed, only to be refiled later by the banks, so is it just a matter of stalling an inevitable foreclosure long enough to save up some money, or have BANKS BEEN WILLING TO SETTLE WITH SIGNIFICANT PRINCIPLE REDUCTIONS OR A CASH SETTLEMENT?

    If so, is that a reasonable expectation when defending a foreclosure, or is that the minority?

    And what makes the difference between a bank being willing to settle in this way, or to continue to pursue the foreclosure? Surely the bank doesn’t want my home, it just wants my money.

    I would think there must be some pattern emerging from these cases, or at least in regard to specific Banks’ approaches that might give me some idea of what to expect in my specific situation?

    Thanks for all you do,


    • Mark Stopa Mark Stopa says:

      There are a variety of factors that make a case more “winnable.” Unfortunately, a lot of them are a function of luck. The judge you get. The opposing counsel. The bank. Whether your note is indorsed. Whether the assignment is fraudulent/backdated. The competence of your attorney.

      The chances of a principal reduction, right now, are close to zero. However, you never know what the future may bring. THat’s why I encourage people to fight and defend – you never know how the landscape may change in coming months/years.

      As for the “pattern,” you’re thinking logically and unfortunately that’s not how these cases go, in my view. Generally, banks just want to foreclose – that’s it. Defend yourself with a competent lawyer and that, in my view, gives you the best chance to avoid foreclosure. Of course, we’ll be happy to help.

      Good luck.

    • Jackie W says:

      Was ur bank – Chase Manhattan Mortgage Co? If it was run & don’t give them another penny. I learned the hard way. I was going through a divorce & left w/no income at all for about 4 months, but did contact Chase to make them aware they indicated they would work with me when I could prove income either from child support or employment. It took 5 months to start getting child support and another 2 for me to find a job. Chase put me on a “forebearance agreement” that after 3 on-time payments (at a new reduced amt) would automatically become my new payment and would automatically convert to a loan modification. After 3 months of Western Unioning my payments I called to find out where the official paperwork was and was told to just keep making my payments via Western Union which I did. Then everytime I called I was told systems were down or they were doing things different now and wait for someone to call me. Eventually I got mail stating I was in foreclosure again because I had failed to send in the required paperwork. I had given them everything they had asked for, but while continuing to make my payments I downloaded their 11 pages of forms and filled them out and faxed it in with everything they asked for. Finally someone called me back and said they had to redo everything and to skip the next payment they were going to start over from scratch. So we did it all over again & they lowered my payments slightly again and put me on a new forebearance plan – they after another 5 months of payments via Western Union (total of 14) they sent me a letter dated July 21st which I received on July 30th. The letter requested certain documents be received by them with 5 days of the date of the letter!! (impossible right! – check the dates) I called them immediately & they told me to fax it that weekend (it was a Friday) so on Sunday August 1st I did. Then on August 9th I received a letter dated July 30th telling me I was back in active foreclosure. I called and they told me not to send in anymore payments. On October 1st they served me with papers & I now have a pro bono attorney handling the case, but she basically says we will fight but there is a possibility they an screw me. So they are keeping all my money & me and my children will be left to fend for ourselves. Don’t trust them at all!! I now understand this is a common practice of theirs!!

  14. Carmen says:


    We have a second mortgage with a different bank that we stopped paying because we could not afford it and they would not work with us. My husband recently got a 25% paycut on his wages and we are struggling to come up with the money for our first mortgage. We have not missed a payment yet but we were going to call the mortgage company for a loan modificaation. Any suggestions as I do not want to get into a situation where we lose our house.

    Any advise is appreciated.

    • Mark Stopa Mark Stopa says:

      Judging by past results of clients and prospective clients with whom I’ve spoken, and what I know about the industry, your chances of a meaningful modification (one that you can afford going forward) are quite poor. It’s probably not a good idea to deplete any savings/retirement/401(k) monies, particularly if you don’t see your finances improving in the near future. Instead, I’d suggest you give us a call, get a consultation, and let us help you make a bumpy ride as smooth as possible. 888-450-1549.

  15. Hillary says:

    I agree Mark its very difficult to get a loan modification and as you pointed out before lots of times you will have a bank that can’t foreclose on you and you are actually signing a new loan agreement with a new lender. I think if someone is represented by an attorney there is a good chance they will prevail. I think perhaps some of the judges in the lower courts might be bias toward the banks, but on appeal that is less likely.

  16. Dan says:

    Hi Mark,

    You mentioned in one of your responses that you currently have clients that have signed loan mods. What was the outcome if an of any of these cases?

    • Mark Stopa Mark Stopa says:

      I’m not sure what you mean. I’ve had a couple instances where clients signed a loan mod and the suit was dismissed without prejudice. I’m hopeful these clients will continue paying and not get sued again; I guess we’ll see.

  17. Fred Stack says:

    I’ve tried all forms of contact with Chase. 2 mod. apps, 1 -3 month trial payment(was a 20% reduction of former payment!), and numerous faxes of documents, etc. Have not been served yet, have not been advised of status ever, except to request more documents( As if my income or savings are magically going to replenish in a couple of months!). Chase has twice claimed modification was denied(even before the last mod. payment was made!) although I wasn’t notified formally?
    My concerns/questions are regards filing bankruptcy without harming my work? I’m an insurance agent(life & health). Every appt. for a license to sell insurance asks if I’ve filed bankruptcy? I’m concerned if I try to save my home(at least until my girls graduate from UF next year!) that I’ll never be able to license with companies to sell again, or at least for a long time, which would obviously be more detrimental than foreclosure? At least from a future earnings standpoint. While I made a mistake in refinanacing to one of those “terrible” adj. rate loans 5 years ago, I was able to escape it, for a 30 year fixed with Chase 3 years ago. That was before Obamacare and the subsequent commission cuts ALL companies have done to us agents. While I’m still able to sell at less than half the compensation just paid the prior year, it’s going to be a slow recovery for me! I have already used my retirement to bail out of “terrible” loan, so there’s no fall back plan now. Would filing a form of bankruptcy to save my home, put me out of business?

    • Maria says:

      Hello Mark,

      Same question as Fred’s: anything we could do to keep our home?
      No savings, our jobs not enough to pay the mortgage, Chase offered trial mod. loan, but we don’t want to accept after reading so much about it…
      They said if we refused the trial mod. program, we won’t have another offer…
      Can you recommend a good lawyer in NYC or any advise?

      Any help will be greatly appreciated, thank you in advance,


  18. Hillary says:

    The way I look at it is that most of the banks only care about their own interests so if they are offering you something be very careful-its probably to their benefit.

  19. Mark Stopa Mark Stopa says:

    I think you’re on the right track. Call us for a free consultation. We’ll be happy to discuss your situation in detail. 888-450-1549.

  20. beachgalone1 says:

    ok. so i’ve been unemployed since September 2010. I have a home that is assessed at $75K approximately. I owe $170. That loan is with BOA and since I have savings and a Fannie Mae loan I don’t qualify for HAMP or HOPE or whatever. My mortgage is $1515 per month. On top of that I have the lot next door with a local bank for $1000 per month. They have already moved me to an interest only loan. I’m going to default in April to make them discuss a payoff of maybe $25K. (I owe $70K on that loan). My savings is dwindling. I’m afraid to default because I read that the new programs coming out will be for those current on their mortgages. Any truth to that?
    If this was a condo I would have walked the first day. I’m trying to rent my place to cover the mortgage and go live with my folks til I know what I’m doing. It’s still not going to cover my mortgage.
    What does defend against foreclosure mean? Some law firms are taking $500 per month “rent” to defend against foreclosure.

    • Mark Stopa Mark Stopa says:

      Defend against foreclosure means don’t roll over and consent to foreclosure (like far too many homeowners do).
      It means defend your case, ideally with a competent foreclosure defense attorney.
      By defending your lawsuit, you force the bank to prove its case, which often it struggles to do.
      Also, defending the case may extend the time the suit is pending for months or years, which many homeowners find beneficial because you get to live in the home for as long as the lawsuit is pending.

      I typically recommend that clients NOT use savings to pay a mortgage, as what ultimately happens is you deplete your savings and still get sued for foreclosure anyway.

      Feel free to contact us for a free consultation. 888-450-1549

      • beachgalone1 says:

        I’m afraid to default because I hear that new principal mod programs are coming down the pike but you must be current in your payments. I’m with BOA and Fannie Mae owns my loan. I also hear that since Fannie Mae owns my loan, there is no hope for me. I’m torn!

  21. Lisa Hoover says:

    We had battled with Chase Bank forever. All the stories that I hear above are our
    stories. We were told we had been approved for our loan modification, we had done the trial period and continued to pay as we were told to do. The next thing we know we get a notice that our loan modification had been pulled, then our loan had been sold to another bank. We have lived in this home for 23 years. It is breaking our heart. We are both disabled and battling illness and are caring for our 25 year old son who received brain damage from a car accident. We do not know what to do. We don’t want to loose our home. We don’t know where we will go if we do. Why is the government allowing this to happen to us. They gave all this money to help the homeowners and the only one winning in this situation is the bank.

  22. Fred says:

    The banks are NOT willing to help in any way on LOAN Modifications and the individuals who answered the phones are NOT another company but a different section of the banks. I know because I tried to help 2 relatives (CITIMORTGAGE and WELLS FARGO) and the banks outright LIED and told me that my relatives had qualified and then 1 day later refused it. Wells Fargo even purposely gave me a wrong fax number to fax paperwork to, just so that I would call back to hear the refusal. 3 other employees said they had the same problems. Banks will NOT try to help you. They say they are but they don’t.

  23. carolyn powell says:

    We just entered into trail period for the second time. We need clear honesy answers on how to move forward with the bank or not. How does a mod with first mod effect second mortgage Please help

  24. pam says:

    I successfully completed a trial modification and was offered a permanent one. I have been leery of signing it because of what I have read on this blog…But are there instances when it IS beneficial to enter into a permanent loan modification? I haven’t made a payment in a couple of months and don’t know if the offer is still on the table so I need to make a decision NOW. Please advise if possible,


  25. Luis m Garantiva says:

    I’ve been a permanent loan mod since 01/10, and yesterday I got a letter from chase arguing that I refused, or didn’t want to commit to the offer extended by CHASE, there so full of bolony . When I called they told me my mod was closed as of 04-19-11.
    When I called no one from loss litigation could give me am answer. As far as we know we never missed a payment. But again when asked to provide a reason they just kept saying we could re apply. How pathetic are these dam!!!!! Banks, there the ones that breached the contract, are there laws to avoid these unsrupolus actiones by the banks? I’m calling tommorow to fight with the bank, to reinstate my modification. If they want to play hard ball well see!!!!! Here in NY BY LAW the homeownwer has up to 455 to stay in their home before even a bank owned sign is placed in front of your house.
    Please what legal actiones can we take against CHASE , for being so corrupt ?

  26. David says:

    Are there similar concerns with short sales? Particularly the newer programs offering money and a quick short sale process?

    • Mark Stopa Mark Stopa says:

      Good question, David. My concern with short sales is that homeowners are typically still responsible for the deficiency, even if the bank “approves” the short sale.
      This means if the amount owed is $200,000 but the bank agrees to a short sale for $125,000, the homeowner is still responsible for the extra $75,000 – even if the bank approves the short sale.

      Unfortunately, realtors often mislead homeowners about this (sometimes intentionally, sometimes not), so that compounds the problem.

      So if you’re still on the hook for a deficiency, the question for me becomes “what does a short sale accomplish?”
      The homeowner has to move out of the home, pay to live somewhere else, and gives up the best bargaining tool (ownership/possession of the home) for a deal with the bank.

  27. Russell says:

    Hi Mark,
    After Reading the horror stories above , Iam trying to modify or get into a repayment plan with my bank it was INDYMAC but was took over by the feds,and sold to ONE WEST BANK do you of any issues with this bank ? What are my chances of the mod /repay plan to my levels?( their levels were too high ).


    • Mark Stopa Mark Stopa says:

      The chances of a meaningful modification are really low, particularly if you’re seeking a principal reduction.
      This is why so many people are walking away, as they’re tired of paying twice as much as the house is worth.
      Yes, I have many cases with Indymac/OneWest.


  28. Frank J Spellman says:

    Reading this article is frightening since I am about to jump into the rough waters of loan modification. However, some of the information provided is invaluable and I truly do appreciate it. It seems my loan situation is very unique. My life partner and I both closed on a loan approximately 7 years ago. The deed to our home was recorded in January 1988 as “joint tenants with right of survivorship, not tenants in common”. At the closing we both signed and initialed the countless numbers of papers involved. We got the loan from a company called Taylor, Bean and Whitaker which closed its doors a couple of years ago. Our loan was then assigned to a company called Cenlar. Sadly my life was shattered on October 29, 2010 when my life partner of more than 33 years passed away from cancer. Luckily we had all our papers in order and there was a small amount of life insurance which I received so I use that to continue the loan payments through May of 2011. I realized if I continued to do this my savings would end up completely depleted so I contacted Cenlar in early June to let them know one of the borrowers had passed away and asked for information about loan modification since I was now making the payments on my own. I was shocked when they had no idea who I was and would not speak to me until I sent them a death certificate and my durable power of attorney. That day they also advised me I was not a borrower on the loan which was total news to me. A letter in the mail addressed to my partner letting him know they had received the death certificate confirming his demise and that the durable power of attorney they had received was unacceptable. At this point I realized there was some kind of mixup so I stopped making the monthly payments until the entire situation could be straightened out. Any correspondence received from Cenlar has been addressed to my deceased partner and to this day Cenlar absolutely refuses to acknowledge me and won’t even speak to me on the phone. All of a sudden about four weeks ago I was contacted by a new company called Bayview Loan Servicing and they advised me that yes, I am a co-borrower on the loan but because I have a fixed monthly income I probably would not get approved for loan modification. Now two weeks ago Bayview Loan Servicing notified me that actually I was not a co-borrower on the loan. When I asked how that could be when my partner and I both signed all the papers at closing and right on the very first page it has both our names stating we were joint tenants rights of survivorship and co-borrowers I was told that some time after the closing they decided not to use me as a co-borrower and put the entire loan in my partner’s name. When I asked why the original lenders would do this they didn’t have an answer. I am very confused now because since I am not a borrower on the original loan I am not eligible for the Making Home Affordable Loan Modification Program. Bayview loan servicing is now offering me what they are calling a “In House Freddy Mac Loan Modification”. I have no idea what kind of loan modification program this is, actually I think they just made up a name for it. What I really don’t understand about this entire situation is how my partner and I could close on the loan as co-borrowers and the original lenders could basically change the terms of the loan after the closing. We were never notified by anyone that the loan had been changed, I was removed as a co-borrower and the entire loan was put only in my partner’s name. To be honest I am now questioning whether or not this loan is even legal for two reasons. First, it seems to me that changing the terms of the loan after it had been closed and removing me as co-borrower without any type of notification or our approval makes me think there was a breach of contract by the original lender. Second, since the deed was held as joint tenants right of survivorship, not tenants in common, neither one of us could take any kind of loan against the house without the other either being co-borrower or signing documents giving the other permission to do so. I am very apprehensive and confused about entering into this loan modification with Bayview Loan Servicing because I have heard these modifications can turn out to be a nightmare. Also I cannot understand how it was legal for the original lender to change the terms of the loan some time after the closing was a done deal. I just really don’t know what the heck to do at this point.

    • Mark Stopa Mark Stopa says:

      I hate to say it, but you sound like one of many homeowners who have approached us over the years who want a loan modification who are probably never going to receive one (for a variety of bogus reasons such as the ones you’re describing).
      Since you’re already several months in arrears, and will deplete your savings by continuing to pay, it sounds to me like the only choice is to defend the foreclosure suit when it arrives and try to save money while the case is pending.
      My condolences on your partner’s passing.

  29. Jared Opalewski says:


    My wife and I bought in 2006 in FL. We went through a painful process of a loan remod with Nationstar. It did lower our monthly payment but added on 16K back onto our principal and ruined our credit. Now I learned about the Short refinance plan that reduces your principal due if your home is underwater in value. Ours is over 50% under value. I call ed our lender and of they said we do not qualify because our loan is owned by Fannie Mae. So how do we get a say in who owns our loan and was our remod legitimate. They never gave us any other options.

  30. Brian says:

    OK, Mark… your website ( says that you think people are in a better position to negotiate for a principal reduction during the foreclosure process… because “they don’t want more land – they want cash”. But here in the comments to this blog, you’re saying that it’s almost impossible to get a principal reduction.

    Also, on that same page, you wrote “Unlike other law firms, we won’t charge you a four-figure retainer”. However, I just got off the phone with one of your lawyers who told me that your fee is $1,500-$2,000/year. My bankruptcy lawyer will file a response to the foreclosure for $300. What are you going to do for me that she won’t?

    • Mark Stopa Mark Stopa says:


      Principal reductions are rare, but they can happen, especially if you’ve saved money.
      I have many clients who paid 10-20 cents on the dollar on their second mortgages (with the bank waiving the rest) because they saved money.
      Unfortunately, it very rarely happens with first mortgages.

      As for what I’d do that your BK lawyer won’t, that’s easy. I’ll defend your case.
      For $300, all you’re going to get is a vanilla response to the complaint. You’re not going to get a defense. You’re not going to get anyone fighting for you.
      Read these blogs and I think you’ll see that Stopa Law Firm fights for people.
      And I think we’re really good at it.

      Good luck

  31. Nise says:

    I too have mortgage/loan modification nightmares. I purchased my home with 20% down from countrywide mortgage. I refinanced to get rid of some debt. Somehow, I subsequently received papers that my loan would accellerate if I didn’t pay $8,000+ dollars. I did that and later received an offer to modify my loan from bank of america. The timing was good as my income had reduced subtantially so I could use a financial break. They offered and I accepted an interest only loan modification for 30 years with the option to pay more towards the principal. For a year, I made time payments ans subsequetly BOA began returning my payments. Finally, I received a Complaint to Foreclose on my home by Wachovia/Wells Fargo, a bank whom I’ve never had a loan with and worse, they are alleging that I didn’t pay on a mortgage with Countrywide. I’ve never missed a mortgage payment. I love my home and really want to keep it. The foreclosure is pending and I want to fight it. I am happy to consult with you and to pay you; however, do you accept monthly payments or do you require payments in lump sum.

  32. Patty says:

    I’m not behind on mortgage, but stuck in an ARM with HSBC. When I do get someone on the phone, their reply is they’re no longer writing in FL. Period. Its not a FANNIE or a FREDDIE. I’m upside down by over $50k because of decreasing value. Some people are telling me to stop making payment so I will get the attention of HSBC and hopefully they will modifiy loan, but after reading this blog, I’m not sure what to do.

  33. OrbeaBikerman says:

    Mark; we are currently in foreclosure, with Roy Oppenheim defending our case against Nationstar Mortgage. We interviewed/researched quite a few attys, and had long ago decided that it would be wither you or Roy. It was a real tough decision to make, as you are both the best there is !
    I liked his business model of $500/mo. better than your $2000/year, as I felt that it was a better incentive for an attorney to be receiving steady monthly income. So actually, I may have used your firm if you had charged MORE than the $2000/year ! Just a thought.

    Anyway, keep up the good work helping struggling Floridians defend their foreclosures !

    • Mark Stopa Mark Stopa says:

      I appreciate the thought, Orbea.
      Frankly, however, this is the first time anyone has ever told me that they would have hired me if I charged MORE.
      I suppose I can understand the logic, but for every client who didn’t hire me because I didn’t charge more, I suspect there are 100 who hired me because I charged less. And ultimately, that’s my approach – to try to appeal to as many homeowners as possible by charging as little as possible.

      Also, while I definitely think it’s possible for a $500 monthly fee arrangement to be fair, I have seen too many attorneys who charge a high monthly fee like that and then do very little work. I’m not saying Oppenheim is like that – I don’t know enough about him to say – but that would be my concern.

      Good luck.

  34. Pingback: Thankful for Loan Modifications? « Foreclosure Defense & Strategic Default | No More United States of Israel

  35. William Price says:

    We are three months late with mortgage payments and have made application for a loan modification. I guess the outlook is not good for the loan mod (based on what I have read) since it the mortgage is Fannie Mae>Countrywide>Bank of America. I sounds like our best bet may be an agressive foreclosure defense.
    My question is this: We have made a monthly PMI payment of $162.00 for many years. Doesn’t this cover any potential losses to the bank? Do they collect the amount of the loan from the insurance company? And then go after us for the same amount in foreclosure?
    Your comments would be much appreciated.


    • Mark Stopa Mark Stopa says:

      Hi, William. I push the issue of insurance payments in all of my cases.
      My general understanding is that the plaintiffs take the position that the insurance company repays the loan only after judgment is entered (so it doesn’t impact the propriety of the judgment in the first instance).
      However, I’m far from convinced on that, so I’d make sure that issue is investigated in your case.


  36. James says:

    Dear Mark
    I am in the process of trying to modified my mortgage with one of the big five. After reading some of the articles and comment posted all over the net and yours, I am scare to even proceed. I lost my job and I am on permanet SS. My wife losses hours at her job on a regular basis. Big five has so far said we qualify, but are getting the run around. I am up to date but I am thinking for the future. Should get a lawyer just to be on the safe side? Can i back out if they make an offer?
    Thank you
    Just scare.

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