AFSCME 3357-HOF'S BLOG

Who Are These Investors who ABD*?

*ABD = always be denyin'

The New York Post last week posted an article about a current trend: folks who are in a trial mortgage modification but can't get a permanent modification because "investors" deny the proposed modification. The dirty little secret of the government's HAMP program is that ultimately the mortgage modifications are discretionary for loans that aren't owned outright by the guarantee agencies, HUD or FHA. Many homeowners are getting denied modifications on the grounds that the "investors" in the loans denied the modification.

Many in the consumer bar question the legitimacy in these denials, but getting accurate information on just who killed the deal can be challenging. It doesn't help things that many consumer lawyers, including me, are skeptical of HAMP modifications in the first place; mostly because it ties the consumer to a negative asset for years and hinders physical mobility that may be necessary to build a new economic future.

If you are a homeowner who gets an investor denial or an attorney representing a homeowner, you can use the RESPA Qualified Written Request Process to ask about the decision making process behind the denial. The problem with RESPA is that it is slow, and the answers you get are often imprecise and unhelpful. If you are fighting a foreclosure, actively questioning the legitimacy of an "investor" denial may have some tactical and/or strategic benefits.