Sunday, March 1, 2015



Several weeks ago, I wrote about Assemblyman Pedro Nava’s legislation, AB 1588, which proposes to require lenders to enter into discussions, or mediate loan modification requests, when property is headed for foreclosure.

See “As foreclosure crisis keeps growing, lenders, borrowers need mediation,” by John Hardisty

The Santa Barbara assemblyman proposes to set up a system that already exists in several other states.

As Nava’s bill makes its way through the California Legislature, the Bank of America now is boasting that it is stepping up its efforts to reduce mortgage-loan balances to avert foreclosures. According to The Wall Street Journal, the plan is the mortgage industry’s boldest move yet to address the plight of millions of U.S. homeowners who are “underwater,” owing more than the current values of their homes.

“It enhances an agreement Bank of America reached 18 months ago with state attorneys general to settle claims they made over certain high-risk loans made by Countrywide Financial before Bank of America acquired that lender in mid-2008,” according to The Journal.

But just this week, cold water was thrown on the Home Affordable Modification Program, the $75 billion effort to bring “underwater” homeowners relief. Neil Barofsky, the Treasury Department’s special inspector general for the Troubled Asset Relief Program, called the existing definition of success for HAMP “essentially meaningless.”

The conclusion: It has been oversold by the Treasury Department and is likely to be a failure when it wraps up in 2012.

Why? Partially because lenders are not compelled to even acknowledge troubled borrowers when they request loan modifications.

For an on the ground “reality check,” go to Steven B. Porter’s blog

Porter is an attorney and mediator who lives in Tehachapi, Calif. In a blow-by-blow account (which would be funny, if it were not so serious) he details more than five hours on the telephone trying to even find someone at the Bank of America willing to talk to him about a client’s mortgage problem.

“A funny thing happened to me on the way to trying to obtain some information from the Bank of America today (March 23, 2010). What follows is true, and the actual events are not made up, and the names were not changed to protect the innocent.”

He was finally referred to a department within the bank that was closed for the day.

“Just in case you thought this issue was unique to the Bank of America, I recently had a similar experience with Chase over a two-day timeframe,” Porter wrote. “With Chase, I spoke to 17 individuals before I was put in contact with a person who could answer my questions.”

John Hardisty is a Bakersfield-based mediator and land-use consultant. His company's website is

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