• DYE CULIK PC | Consumer Protection Division

Memorial Day 2011: GMAC Mortgage and Orlans Moran Go in the Trenches for Battle Against U.S. Veteran

For one Massachusetts family, this Memorial Day weekend means continuing a long fought battle with GMAC Mortgage and Orlans Moran to keep the home they have lived in for over 30 years. Even though they are perfect candidates for HAMP (Making Home Affordable)  — responsible, mortgage-paying citizens who momentarily lapsed on payments for the first time in their lives because of a tough economy and a few major set-backs  — GMAC continues to deny this family for a loan modification under a program created to help people just like them. As a United States veteran, he returned home and stood with his wife on the plot of land where they dreamed up this home. Then they worked hard, built it, and raised their family there. It’s a home where their grandchildren now play and where years of family gatherings are now happy memories recorded in the walls.

Despite presenting all the facts on why they qualify for a HAMP loan modification, GMAC and Orlans Moran have tried everything to take this home regardless of the facts. Days from a recent foreclosure the only reason they gave for marching forward with the takeover was to insist that this family didn’t live in the home. It took some doing, but we won the battle that day and GMAC was not able to foreclose based on a reason so far from the truth.

Next, GMAC immediately set to planning their next attempt at victory and wrote one of the letters these types of organizations have become famous for — the one claiming not to have received documents they have in fact received. A predictable move which didn’t work — we rallied and shot right back with factual details that had them scurrying back into the bunker, unable to face the proof, proof, proof. We won again that day. GMAC blustered a bit, hemmed and hawed, and ended by promising to definitely give us a call “within 3 business days” to figure out what happened. They never called.

Today, as we are heading into Memorial Day weekend, when we’re all thinking of brave individuals who serve our country, GMAC made their next move. This time they tried some tricky maneuvering with some fancy sounding figures, regulations, and citations from official notes made on the borrowers file with the final conclusion of Onward With The Sale. For all of you fighting the same battle, you may find use in their faulty reasons and our corresponding back fire:

GMAC: The denial was based on GMAC’s inability to do any principal forbearance due to investor guidelines.

CULIK LAW:  The investor on this note is Fannie Mae. Fannie Mae loans must be considered for a principal forbearance. Fannie Mae SSG, § 610.03.06 (“If necessary, the servicer must provide for principal forbearance to achieve the target monthly mortgage payment ratio.”).

GMAC: The denial was also based on the fact that the borrower’s debt to income ratio was more than 55%.

CULIK LAW: DTI greater than 55% does not prevent a loan modification. Fannie Mae SSG, § 610.03.07 (“Servicers will be required to send the HAMP Counseling Letter to borrowers with a post-HAMP modification back-end ratio equal to or greater than 55 percent. The letter states that the borrower must work with a HUD-approved housing counselor on a plan to reduce their total indebtedness below 55 percent.”).

We’re on guard to see how this one comes out–updates to follow. No doubt, they’re reworking the battle plan for tomorrow’s round. While we stand ready, our thoughts go out to the families fighting similar battles and Servicemembers who bravely serve our country. Happy Memorial Day to You.

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