Posts Tagged ‘Jody Shenn’

Investor backlash

Don’t miss Jody Shenn’s excellent piece in Bloomberg News about the investor campaign to curb loan modifications — a helpful corrective to Gretchen Morgenson’s Times column this week, which bizarrely championed mortgage securities investors’ claim that a bill currently in Congress providing loan servicers with legal protections when they modify loans will have the unintended effect of subsequently protecting them from legal action challenging predatory lending or other wrongdoing that occurred back when the loan originated.

The obvious answer to the problem, and one Morgenson should recognize given her extensive work covering lending abuses, is to make sure that borrowers have good legal and financial advocates available to them — to level the playing field with the likes of Bill Frey of Greenwich Financial Services, who is leading the charge against the legislation. Legal services lawyers routinely review borrowers’ mortgage paperwork, find glaring violations of the Truth in Lending Act or Real Estate Settlement and Procedures Act, and pursue legal action where warranted as a first course of action – not as an afterthought to a loan modification. No borrower should enter a loan modification casually, and right now all too many do, often with the encouragment of a mortgage broker turned modification “expert.”

Congress has already increased funding for nonprofit housing counselors. Now, in addition to passing safe harbor for servicers (the House already has), it needs to amp up legal services for borrowers, too.

Tuesday, April 28th, 2009 | Tags: , , , , ,
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