Okay, so here we are at post #2. Nothing has changed yet. Some say the known is better than the unknown, or no no news is good news, right? Well, those people have obviously never lived with the uncertainty of not knowing what their address was going to be tomorrow, right?
Back to the story I was telling. So, I – like millions of other Americans – listened to the instructions my mortgage company gave me. I stopped paying them what I owed them. then I diligently ignored the Notice of Default (NOD) mailings I received, per the instructions of the representative I had spoken to . On advice I had heard elsewhere, I checked my local paper for the sale date, choosing a paper that many locals get delivered to their homes, figuring that was the most likely place for the sale notice to appear.
But after not seeing one, nor receiving a Notice of Trustee Sale (NOTS) after receiving the fourth NOD, I called up my mortgage company again. By this time, it was March 2009. I asked for the representative who had helped me before, Michelle, and Richard, who had answered, said he could help me.
I explained that, per the instructions I had received from Michelle, I was concerned that I had not yet received a NOTS, nor had I seen a sale date published, and that I would like a forbearance agreement. He replied, “Oh, a sale date is scheduled for April 15th, so you called at the right time. Let me just get some financial information from you.”
I gave him all the information he requested, including the fact that I was receiving unemployment benefits. (This is a key point to remember for later on – that I told them I not working at the time, and receiving benefits as part of my monthly income.) At the end of the financial data gathering, Richard said, “Okay, based on all of the financial information you just gave me, you qualify for a forbearance agreement,” and went on to explain the general terms of the agreement to me.
In order to catch me up and pay some of the penalties that had accrued, I would need to pay an accelerated amount slightly higher than my current mortgage payment. These payments would need to be made via cashier’s check or wire, by the 10th of each of the following months – April, May, June, July. In June, after making my 3rd payment, my lender would send out a request for paperwork to certify my financials and this information would be used to determine the modification they would offer me. Finally, he said the modification would be completed by August.
Thrilled that my mortgage company was willing to work with me, I scraped together the last of my funds from my retirement accounts, so that I could afford to make those accelerated payments. I received the forbearance agreement two days later, then signed and returned the agreement via fax and the hard copy went with the payment.
Now, I consider myself a fairly intelligent person. My friends consider me an intelligent person. I read that forbearance agreement all the way through before signing it. Twice. Prior to working as a contract administrator, whenever I tried to read something legal, I would go cross-eyed and give up. But once I made myself sit and read through them and translate into plain English, I felt like I understood what I was reading. And thought I had a decent understanding of the terms of the agreement.
Basically, it laid out my payment arrangement, the total outstanding, and, on their part, they would “forbear” from exercising their rights, which included foreclosure sale, unless I defaulted on my payments.
Most people don’t wholly understand the legal documents we sign every day. With so many “Terms of Agreement”s flying around everywhere, from entering a sweepstakes, to downloading an app on your iPhone, to your credit card agreement, to paying for parking, is it any wonder that we zone out when reviewing a legal document? Is it surprising that most of us don’t even read these things? Without having a legal education, is it incomprehensible that we don’t even know if our rights are being fully protected, or that the terms presented by the corporations don’t violate any laws? How do we really know if the agreements being presented to us are even legal themselves?
Can you imagine, then, how flabbergasted I was when my attorney told me the forbearance agreement I signed is not even a legal contract? Per the agreement, all of the burden to perform under the terms was placed on me. The mortgage company did not have any requirement to perform – not even to offer me a modification after I made all four payments, let alone being required to give me a modification in return for those monies.
According to http://legal-dictionary.thefreedictionary.com/contract, a contract is “1) n. an agreement with specific terms between two or more persons or entities in which there is a promise to do something in return for a valuable benefit known as consideration.” In this case, I provided a valuable benefit by giving money, and my lender was to provide a promise.
The agreement was cleverly worded, so it appeared they were making a promise. I knew a promise was required on their part, but my attorney informed me that promise had to be something substantial. A promise to review my information to determine if I qualified for a loan modification is not a substantial promise in exchange for the substantial amount of money I was required to pay them under the agreement.
Furthermore, the forbearance agreement had a major error under California law. Part of the terms stated that they reserved the right to accelerate the entire mortgage, so I would be responsible for paying the entire amount owed. This is in violation of state law.
So, knowing all that, it’s no wonder so many people have wound up losing their homes. It’s not just a financial issue, but also a legal one. And one with such devastating consequences as a result of not understanding what we’re reading. But also, because we trust that the corporate attorneys know what they’re doing. Aren’t they supposed to be the experts? I thought I had a basic understanding, but I’m definitely no Legal Eagle.