16 CFR Parts 317 and 318: Mortgage Acts and Practices Rulemaking
Re Mortgage Assistance Relief Services Rulemaking, Rule No. R911003: This seems to be an effort by lenders to shut down legitimate private firms that help people renegotiate their loan terms. True, there are a lot of unscrupulous people out there who take people's money without performing much of a service, but we shouldn't throw the baby out with the bathwater. People need to be able to hire a legitimate firm or a lawyer to negotiate on their behalf, and those firms should be able to charge reasonable fees for their services, on a schedule that makes sense for the borrowers' situation. The consultant should not have to worry about collecting her fee after the modification has been done, when a person has nothing to lose by not paying and may declare bankruptcy as a strategy. People seeking modifications are spending hours, days, months and even years making phone calls and faxes, trying to get through to someone who can help them. Eventually, they give up. They would gladly pay someone who knows exactly whom they should speak to and what to say, to take over the hassle. Legitimate negotiators are much more successful than people working on their own in getting significant modifications and they should be allowed to work in their trade. People who overpromise and use unscrupulous tactics such as deeding the home to themselves, should be punished or put out of business. Maybe there should be licensing but licensing without enforcement is worthless. Mortgage brokers are licensed and look at the harm they did. Instead it would be best if the industry develops standards and polices them, and if borrowers are educated.