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Four GOP State Attorneys General Object to Loan Assistance in Foreclosure Settlement

Four Republican state attorneys general said they oppose forcing banks to reduce the value of loans for troubled homeowners as part of a state-led mortgage-servicing settlement proposal.

The officials -- Kenneth Cuccinelli of Virgina, Greg Abbott of Texas, Pam Bondi of Florida and Alan Wilson of South Carolina -- sent a letter Tuesday to Iowa Attorney General Tom Miller, a Democrat spearheading the 50-state effort.

 

Earlier, state attorneys general and federal agencies delivered to banks a 27-page set of proposed rules to reshape the way mortgage servicers deal with troubled borrowers, a response to the foreclosure-document problems that erupted into public view last fall. State officials allege that mortgage companies broke state laws when handling foreclosures.

As part of a potential proposal to settle those allegations, officials have also been discussing financial penalties, including fines or requirements for banks to write down more than $20 billion in loan balances for homeowner borrowers that owe more on their properties than their homes are worth.

The Republican attorneys general, however, object to that idea. In the letter, they argue that loan assistance is largely unrelated to the foreclosure-document issue. "We believe that the states' settlement proposal should focus on the alleged misconduct that prompted our investigation," they wrote. "To the extent loan modification proposals should be included at all, they should be limited in scope and only address unlawful conduct at issue in this investigation -- such as banks' improper handling of loan modification applications."
The attorneys general, however, suggested that they support other reforms that could be mandated in a settlement.

They wrote that they were "deeply troubled" by revelations of dubious practices in the mortgage-servicing industry, including the use of so-called "robo-signers" who signed documents without personally verifying their content and banks' failure to provide proper documentation when foreclosing on homeowners.

"The states are poised to address unacceptable and unlawful practices that were widespread within the nation's largest mortgage servicers," they wrote.
Geoff Greenwood, a spokesman for Mr. Miller, said the Iowa attorney general "appreciates all input" on the issue.

"While we may have some disagreements on exactly how to solve these very complicated problems, we all agree that we need to work together to address them as we prepare to negotiate face-to-face with the nation's largest servicers," Mr. Greenwood said.

Story By Alan Zibel, Copyright 2011 Dow Jones & Company, Inc. All Rights Reserved
This copy is for your personal, non-commercial use only. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com

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We can help you stop foreclosure with a loan modification in the following states:

If you need help understanding your option of taking advantage of the home loan modification process, the help is available to you everywhere. The process is quite tricky and it is highly recommended that you do indeed seek legal advice before signing on the dotted line, in order receive the most efficient and cost-effective modification to your mortgage payment.

Where do I get Advice
There is advice all over the web on how to receive a loan modification; some of this advice is quite helpful, while some is quite dreadful. There is also the opportunity to hire a professional service that will help you go through the paperwork and work with the lender to help you get all the benefits that you deserve, due to a hardship. Loan modification is a process that must be understood completely and thoroughly. This article can actually offer you an insight on the process of loan modification and tips that will better help you as a homeowner save your home from the risk of a foreclosure.

Loan Modification Advice
First and foremost, it is important to determine if you are eligible for a loan modification. This requires writing a letter of hardship explaining to the lender what exactly the reason is for your late payments and the fact that you are unable to pay your mortgage. Doing a loan modification on your own requires more than just advice. Becoming educated about the process is more important. This is perhaps a good reason to hire a professional loan modification company to take part in the process. They will handle everything for you, while educating you in the progression. There is a fee charged for hiring these companies, but in turn your mortgage payment can be lowered quite a bit and professionals can even find things in your original loan papers that may prove that the lender may have broken the law during your original mortgage signing.

If you do choose to take the big leap of the loan modification process on your own, you must first contact the lender and they will lead you to the correct department, normally the loss mitigation department. You may not want to directly say that you are in the process foreclosure. We do not want the lender to think your situation is not worth their time before hearing you out. Always document anything relating to the loan modification process, every phone call and any other information you may receive during the process must be documented. Always discuss every option available with your lender, so that you may come up with the best alternative for you. It is true you will save money going directly through your lender and let’s face it, you are struggling already trying to make your payments, but professional assistance can help immensely.

No matter what direction you decide to take, loan modification will be what determines the amount of time you have in your home. If you are eligible you should act as soon as possible.

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