Many clients come into my bankruptcy law office here in Houston complaining about their mortgage company, and how it seems like they want to foreclose on them. They have applied for loan modifications, only to have the mortgage company claim that they did not receive the paperwork, over and over again.

Also, clients complain about being turned down for a loan modification when they believe that they should have qualified for one. We often have to file a chapter 13 bankruptcy for the clients to stop the foreclosures from occurring. We have begun helping clients with loan modifications, just because really there is no other choice.

The Making Home Affordable HAMP program will end Dec. 31, 2012, and it's time to at least try your best to get a loan modification, particularly if you have one of those ARM or Adjustable Rate Mortgages, or some other kind of toxic, predatory loan that was so prevalent during the real estate boom years.

And the federal government has reduced or eliminated funding for housing counselors for the HAMP program, as I understand it. Formerly we were referring people to free government housing counselors. We cannot do our services for free; we charge out usual hourly rate for the services; thankfully it is not a huge investment of time. If your particular mortgage servicer subscribes to it, we use an internet portal to deliver the documents to them, so there is no doubt that the documents were received by them.

Also, sometimes the mortgage companies have violated consumer protection laws, such that we file a lawsuit or adversary proceeding against them in Bankruptcy Court, and in lieu of taking their chances at trial, they often will agree to a favorable settlement of the litigation whereby they give the client a loan modification that lowers their interest rate, puts any arrears into the loan, and pays my attorney fees.

This can allow the client to either exit from chapter 13, or at least reduce their monthly trustee payments quite a bit. If you have a bad mortgage loan, do something about it. And there is no time like the present, there is a lot of political pressure on these mortgage lenders and services to do something. If you are going to try the HAMP program, do so quickly, as it will run out next year, and these things can take a long time to complete. If you are in the Houston Texas area, contact my office at 713-772-8037.

J Thomas Black
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Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization
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