Gary J Duarte
. . . and the truth shall set you free!

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My Home Recovery Act
Gary J. Duarte



In 2007 came the culmination of some 20 years of the U.S. mortgage financial system. It began its worst economic crash in history primarily because of unethical immoral behavior by the executives managing the Wall Street mortgage industry in conjunction with misguided government manipulation of the housing market. Many have estimated that from 2000 to 2007 these industry executives “took” a “trillion dollars” in “bonus funds” from the illicit mortgage structure from grassroots Americans. This was not “normal business profits” but “bonus funds” for bilking the American public! In respect of the precept “follow the money,” congress should author legislative action to “recover” such “bonus funds” or a percentage thereof, from those unethical and immoral executives who conducted, participated and bilked those “bonus funds” from grassroots Americans.

There are three major sectors of the “mortgage crisis”. 1) Toxic Mortgage Loans, 2) Underwater Mortgage Loans, 3) Paid Mortgage Loans. Each of these sectors has its own series of complex circumstances and we will attempt to identify them and render a potential legislative recommendation toward correction.

1)      Toxic Mortgage Loans: Over the past 20 + years this industry has participated in “allowing” mortgage loans to clients whose income capacity could in no way justify the loan obligation under common since banking practices for which the mortgage was negotiated. Legislation should be written to address this sector that would establish measurement criteria for an unattainable “toxic” loan to income ratio. For this determination both parties should be responsible for the liquidation and write off the contract agreement.

2)      Underwater Mortgage Loans: The crash of the mortgage industry has resulted in the “property value loss” to millions of American homes. This economic burden was brought on by the U.S. Government as well as the mortgage industry and correction of this economic collapse should come from that industry and be economically corrected to the American homeowners. Congress should consider legislation that would correct the economic disaster that these factions have brought to the American people. In many of the “cases” of underwater mortgages, the property owners have met reasonable criteria of income to loan debt ratio. In such “qualified cases” the homeowners should be “bailed out” by adjusting such loans via a forbearance of the principal reduction of the original note and negotiate a new mortgage reflecting the current market value of the property over a 15 year 3% fixed interest rate. The forbearance criteria schedule can be established by the “property value losses” as established and calculated from state to state. The current market values vary in range from 10% to 60% depending on actual state market current day appraisal assessments. Such a legislative program would “fairly adjust” underwater mortgages to compensate the original homeowners by re-writing the contracts. The banking institution is given an avenue to redeem its malpractice and keep thousands of homeowners in their homes by adjusting a forbearance and keeping an established client. The program would also move the adjusted cash flow to the grassroots public beneficial to new economic stimulation. This grassroots economic infusion would also spur new development and job creation. A 15 year fixed rate mortgage would accelerate the mortgage pay down which would also “improve” the mortgage market and “property values” nationwide.

3)      Paid Mortgage Loans: Once again the only “fair” way to address the mortgage crash is to provide an economic value to Americans who sit on their “paid out” mortgages and lost up to 50% of their equity because of the mortgage industry. The only equitable method to assist American’s with paid out mortgages is to provide forbearance applied to their annual property tax assessments for the next 15 years. This legislative recommendation would be to reduce paid out property owners annual appraisal assessments by 70% in addition to their current property appraisal values. This provides an avenue for correction while the inventory of new mortgages will be taxed on current values. Both property values and their taxes will increase and the market improves.

We recognize that such legislation will affect the banking, mortgage and government entities and “they” will have to make adjustments in their management systems to compensate for the mortgage restructuring. Many of these “mortgage notes” were “sold to investors”, both public, Fanny Mae and Freddie Mac and “private foreign investors” which in many cases has made the “re-negotiation” of the contract impossible. At the same time, if these “investors” were purchasing mortgage notes as “investments,” the breakdown of the system has made them “bad investments” and they need to carry their fair share of the crash. However, “they” are the cause of this massive mortgage crash and should be held accountable to the American Citizens by correcting its business with the public and the government, by writing corrective legislation. Federal, state, county and local “governments” will be affected by this legislation and ultimately these adjusted tax reductions will result in less government and this direction is what many American Citizens believe is important for Americas future. The only fair way to correct such wrongs is to place the corrective actions back on the companies and government agencies who caused them.

Gary Duarte, Sparks, Nevada

The industry, Banking, and Credit Recommendations for Mortgage Negotiations

  1. Always try to negotiate with a mortgage lender before a payment is missed. This allows the terms and conditions of the mortgage to be altered before the debtor enters into default on the loan. In our case we wrote upwards of 8 letters to the Wells Fargo Mortgage corporate offices with NO response. Do to this complete lack of response one can only assume that their intent is to force the debtor to stop payments in order to force a negotiation of the loan. In most instances a bank will wait until 3 concurrent months have passed with no payment until they file a notice of default with the local county courthouse. So even if the debtor fails to negotiate the mortgage process before default has occurred, they do have a window period to contact their lender that lasts for about 3 months.

  2. Once the debtor contacts the lender about negotiating their mortgage they should always be upfront and honest as to why they need to renegotiate their terms and conditions. How about the creditor being up front about selling inflated mortgage loans and walking away with a trillion dollars in "bonus funds" over the last decade CAUSING the mortgage collapse?  Many times the lender will require proof that loss or decrease of income has occurred. When this occurs it is vital that the debtor proves their income is not enough to cover their mortgage payment and daily living expenses, such as food and utilities.

  3. Never opt with bankruptcy or foreclosure on a mortgage loan until renegotiation has been sought. Filing bankruptcy or enduring a foreclosure seriously damages the debtor's credit history for a period of time that can last as long as 8 years. Correct when we were forced to stop payments in order to force the bank into negotiation they reported our late payment record to the credit bureaus. We wrote to the credit bureau's that EVERY credit account we had was current the past 10 years. The only late reporting was on our mortgages, therefore "the credit bureau's" should "fairly" report these accounts as DISPUTED ACCOUNTS.

  4. Many times a renegotiation of mortgage terms simply means the debtor wants to move the day of the month the monthly repayment amount is due. Most institutions will agree over the phone to a change in terms that are as simple as changing the day of the month the loan payment is due.

  5. Many mortgage lenders will work with the mortgage loan debtor to help decrease their principle amount owed, lower their interest rate, or even accept partial payments; this is of course assuming the debtor communicates with the lender that they need these mortgage modifications to be made. The FACT is the lender will NOT communicate, period.

  6. There are several mortgage lenders who will grant new interest-free loans. These loans are based on the amount that a debtor must pay for their mortgage.

  7. Even if a person finds that their current mortgage lender is not willing to negotiate, they can apply with other lending institutions which often leads to a current lender agreeing to negotiate.

"Good lawyers can read sentences in a lot of different ways," says Haas--meaning they get paid to come up with interpretations favorable to their clients. I love this statement, "good lawyers" which suggests bad lawyers may exist, comforting when your life long asset is on the line and you're trying to negotiate with an institution that may well "have" all of the "good lawyers" under contract. But while your lawyer is looking for loopholes, he's also racking up huge fees. And threatening to sue isn't exactly a textbook way to boost business.

Negotiation experts suggest a different approach: treating your business partner like a partner, not an adversary. Look for something to offer the other party, says Marc Freeman, president of consulting firm Marc Freeman & Associates and author of Renegotiate With Integrity: It's Not Business, It's Personal. That's how Freeman cut $3 million off a contract for one of his clients, MyPoints, a company that offers rewards to online shoppers.

There's a danger to this approach: If negotiations break down, you've given your customer a lot of information he or she could use against you in a legal dispute. Exactly, however full disclosure is required with the government HAMP (Home Affordable Mortgage Program) you have to prove your complete assets which allows them to dictate the new terms of the agreement.  

Contact a Housing and Urban Development (HUD)-approved housing counseling agency. These agencies provide free (or low-cost) advice. They will tell you about government mortgage aid programs you can apply for and help you negotiate with your lender. Visit HUD's website (see Resources) for an up-to-date list of approved agencies in California. These are the agencies who brought these programs into the banking industry. In our case we had a second mortgage for a business rental property. We went the same route this mortgage requesting renegotiation of the loan. The state of Nevada has been pegged as the worst property value loss state in the country and in response to this, the Nevada legislative body did pass laws in an attempt to protect Nevada citizens. However the point of this comment is that the bank illegally did actually foreclose on our rental property and according to Nevada law this foreclosure was illegal without proper notification. However, the scenario is this single property was a business investment and its foreclosure has some connection to interstate commerce laws. The result was, although the property was put up for auction sale by the judicial system it did not sell at auction and in the interim it was sold to Fannie Mae the U.S. government housing agency. So in essence our business investment and its rental contracts were interfered with by the bank its legal firm and the United States government agency manipulating Constitutionally protected free enterprise.

Prepare for your conversation with your lender. Gather relevant paperwork such as your account information, income statements and an up-to-date budget for your household. Read and familiarize yourself with the details of your mortgage. Prepare yourself to explain and prove why you need to renegotiate your mortgage. If you can afford your mortgage but you are looking for a better deal, be ready to quote the lower interest rates other lenders are offering.

Call your lender as soon as possible. Never ignore calls or letters from your lender. It is best to call your lender before you fall behind on your mortgage payments. Ask for your lender's loss mitigation department.

Provide the paperwork your lender asks for. If your lender agrees to renegotiate your mortgage, you will have to provide additional paperwork. This will include filling in and signing forms, as well as providing details about your financial condition.

Review the new mortgage terms carefully, preferably with your housing counselor. Confirm that the terms in the documentation your lender sends is what you agreed to over the phone. Sign them and send them back to your lender. These recommendations are all based on communications integrity and to be honest NONE of them apply to our dealings with the financial industry or the mortgage agencies.