Modifications are important to homeowners trying to hang onto their homes and avoid foreclosure. These homeowners resend the same paperwork and documents to the lender over and over again. Now there seems to be yet another hoop these homeowners have to jump through in order to get a regular modification.
Lenders have been forcing homeowners to sign gag orders when litigation is initiated and settled, but now the gag orders are being placed on homeowners wanting a simple modification. These new gag orders have been on the increase the last six months.
Mortgage giant, Ocwen is allegedly forcing homeowners to sign a gag order stopping and barring them from ever badmouthing, saying anything negative or detrimental regarding the company. If a homeowner doesn’t sign and agree to this pressure and vow not to complain, the homeowner can lose their mortgage modification, face immediate foreclosure and be evicted.
Joseph and Neidin Henard, homeowners in Santa Cruz, California began the long ordeal applying for a modification after they defaulted on their loan. The Henards were severely underwater with their mortgage and the monthly payments were crushing them. They thought their problems ended when they were approved for the modification and their monthly payment slashed almost 40%! But in the final settlement paperwork, they saw that Ocwen Financial Corporation, the company who collected and processed their mortgage payments had added a clause to the modification. That clause stated the Henards could never say, print or post anything negative about Ocwen.
Bank of America Corporation and PNC Financial Services Group are also telling many homeowners they’ll ease the terms of the homeowner’s underwater mortgages if the homeowner promises not to say, print or post anything negative. Homeowners aren’t the only ones being gagged – attorneys for these homeowners have also been given gag orders! Settlements are often requiring the homeowners never to sue them again.
These clauses hurt homeowners. If the mortgage company makes an error, how can the homeowner fix the error if they can’t hire an attorney or make a complaint? Lenders are notorious at losing paperwork, documents, inputting wrong information and failing to send important letters, or sending to wrong addresses. If that happens, the homeowner doesn’t have a voice due to these clauses they were forced to sign.
Earlier this year, the Consumer Financial Protection Bureau (CFPB) examined two mortgage servicers who were requiring homeowners to give up their rights by signing a gag order. The CFPB said the practice was unfair and required those servicers to cease.
There are still 9.7 million homeowners (or 1 in every 5) across America whose homes are underwater. Modifications play an important role in recovering from the housing crisis. One law professor said, “the banks are attempting to hold clients hostage with a provision they know we cannot agree to.”
PNC stated “these clauses are part of the consideration we receive for agreeing to settle the case. This helps to ensure that the discussion is not re-opened in public after the case has been settled.”
More than 5.1 million homes have been foreclosed on, a crisis the banks helped create in the first place.
Keith A. Gantenbein, Jr. is a licensed, Colorado foreclosure defense attorney and Colorado real estate attorney located in Denver and servicing all of Colorado. His foreclosure defense practice includes foreclosure prevention, judicial foreclosure, HOA foreclosures, foreclosure assistance, Colorado foreclosure assistance, loan modifications, Denver foreclosure help, short sales, and all other foreclosure defense legal assistance. He also defends homeowners against HOA claims in HOA lawsuits, handles real estate closings, title issues, lien issues, quiet title, real estate contracts, bankruptcies, mortgage negotiations, lender liability, real estate, civil litigation, contracts and landlord/tenant.
If you think you will be facing foreclosure, or are in the foreclosure process, or have had a wrongful foreclosure, contact Keith Gantenbein at (303) 618-2122 for a one-hour consultation, where he will discuss your situation and go over all your options with you.
If you need a Colorado foreclosure defense attorney or HOA defense attorney, or need Colorado foreclosure help, please visit our website for more information: www.gantenbeinlaw.com
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