Monday, December 20th, 2010 at 8:28am

It’s OK To Be Unfair When You’re The Bank

Posted by Ron Ballard

A Federal District Court once again affirms what those of us involved with short sales and loan modifications have been experiencing all along: It’s Okay To Be Unfair With Borrowers When You’re The Bank.

On December 13, 2010, a federal district court in Oregon found in Vida vs. OneWest Bank FSB that the borrower does not have a private right to sue it’s mortgage lender (a “private right of action”) when the mortgage lender treats them unfairly in the process of administering the HAMP loan modification program. The court also said that borrowers are not the intended beneficiaries of the servicing contract between the bank and the U. S. Treasury for servicing the federal HAMP loan modification program.

So if the borrower isn’t intended to benefitted by the federal HAMP program, who is? The bank? The Treasury?

If a bank does not administer a federal program fairly and the federal government doesn’t enforce fair administration, then why does the program exist?

You can read the actual court opinion at Vida_v_OneWest .

You’ve got to love the way the bank sent a letter about, “we are here to help you avoid foreclosure,” even after it completed a foreclosure it had told the homeowner was going to be delayed. I can’t count how many times I’ve seen that. Talk about adding insult to injury.

I expect to write more on this later, but for this week before Christmas, I’m simply making this article available as a current resource.

I don’t want to get “negative” this close to Christmas in speculating that programs like HAMP and HAFA are all just smoke and mirrors to make the government look like it’s taking action on behalf of distressed homeowners when it’s actually creating means to get payments to the banks while creating false hopes for homeowners.

Maybe some think false hope is better than no hope.

3 Responses to “It’s OK To Be Unfair When You’re The Bank”

  1. Moe Nelson says:

    I’m reminded of the Golden Rule…Those with the Gold make the Rules.

  2. Steve Pawera says:

    “..even after it completed a foreclosure it had told the homeowner was going to be delayed.”

    The key word is ‘told’, not ‘wrote’. Which makes me wonder, would it break any CA law if the borrower (or his representative) keeps a recording of a call the bank is already recording?
    The day I asked the bank, ‘what if I recorded the call to?’, their answer was ‘then I would have to hang up.’

    As for the bigger issue of ‘fair’ – what’s fair got to do with it? I’ve always gotten more traction asking the bank rep (usually with a higher title) if they want to be the decision maker responsible for netting their investor less than the short sale I’m offering. Self-preservation is generally more powerful than ‘fair’.

  3. Steve Pawera says:

    Moe, your golden rule made me laugh. That is SO OLD SCHOOL. There’s no more gold, just acts of congress creating more indebtedness, a few taps of the treasury computer and viola! New money is made. 🙂

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