Who's Liable when the loan is sold?????

[Ledeen]

I was sold a horrible loan, a loan that on its face appears designed to take my house.

I used a Loan Broker who I'd used before and previously rates and terms where always what he had promised.

He told me there were 4 optional payments, and I did my homework and thought I really checked out the loan pretty good. I knew if I did not make the Interest Only Payment option it would accrue Negative Am, and the loan balance would Increase. I also new if I made the Interest Only payment, my loan balance would not go down.

At the time I was planning on selling the house, but wanted to remodel the bath first (it was still the original 1940 bath, and in really bad shape) the rest of the house had already been remodeled, and housing prices were still very good.

The loan ratio appeared to still be good, it was still at 70% of the homes value, so I figured even if the market went down I would still be OK.

My plan was to pay the Interest Only payment, remodel the bath and sell. However when I received my first statement, I was shocked to find the Interest Only Payment was 1,300 a month MORE than what I was quoted.

I was told it would be 2,900 a month for the Interest Only Portion. When I signed my loan docs the only amount documented was the Minimum Payment, and that of course was exactly as promised.

After I received my first payment I called Downey to ask if I could pay anything in between the 2 payments and was told NO. Stupid me, I never knew this was incorrect since I'd never had anything other than a 30 year fixed loan.

I remodeled the bath as planned, it took longer than expected, so when I was ready to put my house up for sale the market had dropped 100K on my house. I started looking at Refinance options but now the house was not worth enough to refi, especially at the new guidelines.

My loan is now more than 60K higher than when it started, and in about 4 months it will reset to a payment I will NEVER be able to pay.

I have called and called Downey about modifying the loan, but am told this loan was sold to an investment group, of which Wells Fargo is the master Servicer, so Downey cannot do anything.

I have reviewed my loan documents because it just seems wrong that they dont have to document the payment anywhere...... in ths case there is NO WAY to tell if the person representing the loan is telling the truth.

I have also found that the Broker Falisifed my income by adding 10,000 a month!

Thats ridiculous! He was also paid 27K by Downey.....

Whos liable for this? The Brokers old mortgage company he workd for at the time, has gone out of business, now he works for another lender. But who responsible for misrepensenting my income? The document I signed had the correct amount so he obviously added this line after I signed the papers and faxed it to him.

Can anything be done? Or should I just give up and resign myself to having a forclosure on my credit?

I am 50 years old, I bought my house 12 years ago, and yep I made a terrible mistake of refinancing it. I spent 200K on improvements, yet I cannot even sell it now for more than my loan it appears. (when I add in the agent commissions, or even on a flat fee service)

I dont want a hand out, I just want them to stop the neg am for a temporary period of time.

Not sure if Downey is responsible, I think they should be since they dont reflect the payments in the actual loan documents, and dont know if going after the broker that lied will do me any good.

I thought the goverment passed a bill to help homeowners in my situation, what happened to that?

[Moe Bedard]

Hi Ledeen,

Welcome to the forum and thank you for joining.................

You might want to consider having the documents reviewed because chances are if you are catching the discrepancies, there are most likely many more...........and this can help you with leverage in dealing with Downey..........especially with an option arm..

click on the link below for more information............

http://www.loansafe.org/safe-loan-modification-service

[Ledeen]

I was sold a horrible Option ARM Mortgage by a Broker through Downey Financial (Downey Savings)


I was flat out LIED to regarding the optional payments, example I was promised the "Interest Only" Payment option would be $2,900 - when in fact it turned out to be $4,200! The Principle and Interest Payment was supposed to be about $3,300, it ended up being 4,900 at the FIRST statement.

Plus after looking at these docs I see the Broker added 10K per month as MISC Income! (he did this AFTER I signed the paper, because it certainly was not there when I filled out the income and expense form)

He also was paid 25K it appears by Downey, the total loan when it was written was 656K. It seems that’s way too high if its supposed to be no more that 1.5% on a YSP commission.

No where on my loan docs does it state what these Optional Payments would be ONLY the minimum payment - the one where the bank takes your house- is documented.

I was told it would have NO Prepay penalty, but the loan docs state "There MAY be a Pre Pay Penalty" what the heck does that mean?

I trusted the broker - (BIG MISTAKE) he had done 2 refinances for me and always been honest, loans were what he said they would be. I only had done 30 Year FIXED mortgages, never an ARM, I did homework I knew if I paid the minimum I would run behind, and my intention from the first was always to pay the Interest Only payment, and at times the principle and interest option, finish my Bath Remodel and sell the house.

The loan at the time I was told was a 70 or 75% LTV, so I thought I was safe even if the prices fell somewhat.

I have been calling Downey over and over to try to get them to modify the loan before it resets. THey say they sold the Loan to an investment group, and the new owner won modify the loan.

Its Greenwich Capitol and Wells Fargo as the Master Servicer. Only Wells Fargo as the Master Servicer has the authority to modify the loan.... and I cannot reach them, nor according to Downey will they modify the loan.

My question is IF there are actually TILA or RESPA violations who’s responsible and who can do anything since Downey, who I would assume would be somewhat responsible sold the loan, so they cannot do anything to it. Wells Fargo can modify the loan, but since they did not do the loan docs, I don’t think they’d be responsible.......

The brokers firm closed shortly after the beginning of the housing downturn, he now works at another small Mortgage company but don’t think he as an individual has assets to go after.

I think he should go to jail for misrepresenting this loan as he did, but that wont help me keep my house.

Last, since I am putting every dime I make towards the mortgage trying to stave off the reset, since when that occurs, I will never be able to pay it. But the lawyers want 3800 retainer, and unless I go take another loan somehow I simply don’t have it. Does anyone do payment programs for those who still have good credit?????? My MID Fico is still at 700.....

HELP HELP HELP>>

[Moe Bedard]

Ledeen,

You need to consult with a real estate attorney in your state on these issues.............and to have them answer your questions about what steps you could take.

[Ledeen]

Does anyone have experience with Option ARM Loans and what the loan documents should reflect for the payments?

I have written here before and have two options:

1. One lawyer has offered to file suit against the lender and broker for fraud. (they falsified my income, even though I gave them check stubs and w-2's.)

Under this option the lawyer recieves an up front retainer of 1500 to 2800 and then gets 30% to 38% fee of whatever he gets the loan reduced

He's not focusing on TILA or RESPA Laws more on Predatory lending and really the fraud of falsifying my income, and putting me in a loan that was over 80% of my gross income.

the down side is that I'd need a settlement offer from the lender that wipes out quite a bit of the principle balance to make up for the 30-38% fee Id have to pay him (basically lets say the loan balance is lowered and my payment goes down 750 a month, Id have to pay fees of 500 a month under a payment plan to pay his 30-38% fee.....



2. second option go to a company offering to negociate a loan modification.

1500 fee, refundable if they are not able to negcoiate a mutually beneficial modification.

I am not sure what to do.... I do think going o trial against a mortgage company and broker would go well for any homeowner under these conditions and would probably force the lender to offer something in a settlement....

The loan modification seems much more simple, quicker and possibly gets me to where I want to be (a payment I can actually afford - not necessarily lowering any principle balance)

But there are complicating issues mainly due to the Lender selling the loan to Greenwich Capitol and Wells Fargo as Master Servicer (yet I still recieve all statements and make payments to Downey Savings)

Is there any disatvantage of attempting a Loan Modification first? Then if not successful then proceeding with an actual law suit?

Im mainly concerned that due to the loan being sold that it may be very hard to modify the loan since Downey doesnt give out any information on who actually ownes the loan. I was told it was one company and when searching on line about this company I found the SEC filing of the agreement between them, Wells Fargo as Master Servicer and Downey and the servicer. But who the heck do we contact for a loan modification?

And do these investment companys even allow Loan Modifications?

My loan payment (the interest only payment) is at about 50% of my income, Ive cut all expences and struggle every month to pay this payment plus Im only 1500 away in deferred interest from a reset which will put my payment at probably 80% of my income. Ive never been late, but strugling just to pay the interest payment and when rates go up, I wont be able to pay it.

On the other hand I have a steady job, verifiable income, never made any late payments on my mortgage or credit cards. Other debt balance is a total of about 10-15K. Loan is 730K. Income is 100K annual.

I feel Id a good candidate for a loan modification to get my payment to 30-38% of my income, but dont know what guidelines they use as a rule.....

Any insight on how to attack these mortgage holders when loans are sold off to these investment company's?

Thanks

Ledeen

[ocalalady]

Ledeen,
I've just found your thread.
I've had the same question you mentioned..."Is there any disatvantage of attempting a Loan Modification first? Then if not successful then proceeding with an actual law suit?". I've read other posts for some help and asked that same question, but nothing too clear yet. I think everyone's just in the same boat and we're all so frustrated. My loans are through Countrywide, and we've posted in the countrywide loans section on this site. We've been so frustrated with our loan and the predatory practices used by our broker that we recently decided to go through a law firm. It's kind of scary, since they are in CA and we are in FL. We've never done anything like this before...not being face to face and all with such an important situation for us. The firm seems to more concerned thus far with getting us a loan modification, which believe me would be terrific if it works out for the better....but we are still concerned with going after the broker/company for their predatory practices. We will discuss if this is a possibility with the law firm when we hear from them (have just sent in our info 2/2/09). It is advertised on their website that they do that also...will have to see what they say. It makes us so angry how we were taken advantage of and we want them to be accountable for their actions.

I hope things are working out for you....or at least headed in the right direction.

[Ledeen]

The only new item since last post is I found we can request in writing the name of who owns the loan.

They actually only gave me the Master Servicer, but at least it confirmed what I believed. The loan Master Servicer is Wells Fargo

I also only think I will have any success by hiring an attorney and suing them, since a loan thats more than 70% of your income cant be legal, and they hid how much the optional payments would be. Only teh minimum payment was listed.

This cant be legal since its not easy to figure out what your payments would actually be and therefore you cant confirm what the broker told you.

If you know anything about these loans and our options please let me know.

thanks

Ledeen