Mandelmans Monthly Museletter: Issue 4.0

Welcome to the next edition of Mandelman’s Museletter…

The Museletter designed to inspire you, inform you, make you giggle when it’s not even supposed to be funny… here goes…

images1. A Trial Period Modification is NOT a Modification

The court appointed receiver in the Lucas Law Case, Rob Evans and Associates, has stated that a modification that’s in the trial period is not to be considered a modification.  In the report filed with the court, the court appointed firm stated: “The Receiver does not consider these short-term payment arrangements to be modifications but rather a repayment of past due amounts structured over a scheduled period.”  Fair enough then.

Memo to Bank of America, Wells Fargo, Chase and the rest… are you listening?  You can’t count the trial period modifications as modifications.  And while we’re talking about this, you also can’t count modifications that make monthly payments go higher as modifications.  And most of all, you absolutely can’t count letters you mail out that say “Dear Borrower…” as “initiating a modification.”

Now, would you guys at the banks like to recount your “results” for August?  Yeah, I know… you’ll do whatever you Gosh darn please… I should do what?  Go pound sand?  That’s what I figured you’d say.

images-12. Mandelman’s Mandates…

I’ve had enough making nice with people.  Here are the things I can’t listen to anymore.  I’m done.  You have to draw the line somewhere, right?

1. It’s not a loan modification if the monthly payment goes up.  Just like it’s not a loan modification if all you do is change someone’s middle initial on existing paperwork.  I understand that you’ve modified something, but if you talk that way around me, I’m going to modify you.

2. Lenders and servicers are not “overwhelmed,” so just shut up about it.  If the nice folks at B of A can answer the phone 24/7 for its 40 million credit card holders, they could have found a way to handle loan modification volume by now.

3. Investors have about the same amount of clout with servicers as do borrowers.  The investor made me do it?  Why, was he or she refusing to maximize his or her ROI?  Ridiculous.  Servicers lie.  It’s amazing, perhaps, but they do.

4. President Obama set expectations for his program to rescue homeowners far too high… essentially he described a program that does not exist.

5. The fact that the NPV formula is never transparent or disclosed represents a violation of administrative law, but no one has acknowledged or attempted to correct the problem.  Why is that?

6. The FTC has taken action against 22 loan modification “scams,” so to call it an epidemic is a bit of a reach.  A bit.  Of a reach.

7. Foreclosures are up again, and unemployment too!  Yay!  The recession IS over.

8. Obama in his speech to Wall Street, talking about the crisis: “Please don’t do it again.”  And I have nothing to say about that except that next time I’m voting for someone tougher… like Sarah Palin.

9. I think I’d like to nominate “ You can call your bank directly,” as being the “Most Ridiculous Lie Resulting in the Most Harm Told by the Federal Government,” in American history.

10. Everyone knows that loan modifications are free… like water in a stream, or air that we breathe… or health care for all Americans and quite a few undocumented workers and their families.  Free at last…

images-23. Bernanke Blathers…

Here’s what Ben Bernanke said recently:

“Even though from a technical perspective the recession is very likely over at this point, it’s still going to feel like a very weak economy for some time as many people will still find that their job security and their employment status is not what they wish it was.”

Oh my Lord, what a jackass!  I’m overwhelmed by his dickishness.  Have you ever in your life?  Well, I do declare.  Are you one of those?  The people whose job security and employment status aren’t what you wish they were?  Why, I am so sorry to hear that.  You should have said something.  Well, don’t you worry your little brain about this.

The recession is over, my good man… just not for you.  For you, it won’t be over for the next ten years.  Pip, pip.  Chin up…

Why Benjamin, you can be a nasty little elitist snob, you know that?

images-34. A Deflationary Spiral That Dreams of Being a Standstill

Economist David Rosenberg, of Gluskin Sheff & Associates in Toronto:

“We are certainly in a deflationary state, of that there’s no doubt. I think people still have no clue as to just how weak the economy is.”

Remove the “impressive medication” administered by governments, and most economies are at a virtual standstill.  The U.S. economy faces a decade of stagnation, he said. “That’s a perfectly plausible scenario.”

“Deflation will last until we see the next secular trend of expanding household balance sheets, and that is some time away.”

Hmmm… expanding household balance sheets.  That makes a great deal of sense actually; people will probably need to have more money before they’ll spend more money.  It’s technical, I know… but after a while it comes to you like it was second nature.

images-45. How’s the President Doing With His Whole Loan Modification Thing?

Forecasts point to 4 million foreclosures this calendar year and the Obama Administration has set a goal to get the banks and servicers to modify another 500,000 by year end.

That would bring the total for the year to 900,000 as reported by the banks themselves so you’d have to deduct the “Trial Period Pre-Foreclosures,” the “Ooops, We Just Screwed Up Foreclosures,” and the “We Show No Record of Offering a Modification Foreclosures.”

Plus don’t forget to factor in the Fabulous Financial Fabrication Factor, known as the 4Fs, which I think is hovering right around 37%, down for the week, but still higher than expected.  So, all totaled up, tax and tip, carry the three… okay, let’s say if they got 225,000 done… that would be good, I think.

images-56. How About a Principal Reduction?  Why yes, I think I will…

How’s this for precious, from the WSJ…

“Banks and loan investors are starting to bite the bullet and lower the principal due on home mortgages for some struggling borrowers, a new report from bank regulators shows.”

See, I had kind of a tough day, but that sentence right there, that makes it all worth it, if you know what I mean.  You go, girls…. Wait, there’s more…

“That’s good news for some homeowners, but may portend more write-offs over the next few years for banks and other lenders now wading through hundreds of thousands of applications for loan modifications. The tradeoff for banks is that by taking the hit now they can boost their chances of being repaid.”

Now, lookie there.  There’s a sentence in the Wall Street Journal about loan modifications, what do you know about that?  In just that one sentence the author established that he had only heard about loan modifications on Monday of this week, and that he was intellectually deficient at say, the level of an aardvark.

This guy seems to think that the only way the banks write off anything is when they agree to a principal reduction.  And if that weren’t precious enough… then he goes on to say that the trade-off is… oh, I can’t… he got me… I can’t stop laughing… out…

And here’s Bloomberg:

The portion of loan modifications in the second quarter that involved reducing the principal jumped to 10% from 3.1% in the first quarter, according to the report released Wednesday by the Office of the Comptroller of the Currency, or OCC, which regulates national banks.

Hey guys, are you reading this?  Principal reductions all around… LMAO… LMAO… LMAO… they’re too much… stop it… stop it…

images-67. Bye, Bye Kenny… Bye, Bye…

I saw it come across the news feeds this week, and it made me smile.  Not enough to get me to stop what I was doing and moonwalk, but good nonetheless.  Kenny Lewis has decided to retire… to step down… to give up the helm.

It was a sad, sad day… absolutely nowhere.  Even around Ken’s office things were pretty much the way they always are… finance weasels sneaking around doing dickish things to people who can’t defend themselves.  Yes, Kenny’s going to miss the place.  Good times, I’m sure.

And it’s unconfirmed as to whether he’ll accept, but rumor has it that he was offered a job by the CIA, specializing in the Destabilization of Foreign Nation States Through Financial & Economic Ruin.  If he doesn’t take it, he may agree to teach the course at the academy.  Way to serve, Ken… way to serve…

In a statement announcing his retirement, the 62-year-old Lewis said:

“The Merrill Lynch and Countrywide integrations are on track and returning value already.  We are in position to begin to repay the federal government’s TARP investments.”

That’s my Kenny… you have got to love the way this man floats though life, don’t you?  Meanwhile…

This past Monday, Ohio’s Attorney General Richard Cordray said he’s leading a class-action lawsuit against Bank of America Corp. in which various groups of investors are trying to collect “billions of dollars in damages.”  Apparently, they’re looking for some money back from CEO Kenny Lewis, CFO Joe Price, Chief Accounting Officer Neil Cotty, BofA’s Board, and the Merrill Lynch CEO that spent a fortune on his office, his bathroom and a toilet, I think.  Seriously, a really expensive toilet, I think.

images-78. The State Bar of California: Rules to Live By-Choosing a Lawyer to Help With A Loan Modification

The State Bar suggests that consumers be wary of attorneys offering loan modification services under any of the following circumstances:

  • Advertisements do not expressly identify by name the attorney responsible for the business.
  • Office staff will not readily identify by name the attorney responsible for oversight of the business.
  • The attorney in charge is too busy or not willing to meet personally with prospective clients.
  • The nameless attorney in charge is otherwise a total jerk or is dressed funny.
  • The firm advises: stop paying existing mortgage.  (Only servicers do that     anyway, right?)
  • The business, through its advertisements or claims of its representatives, makes claims that sound too good to be true, such as a 90 or 100 percent rate of success in obtaining loan modifications, because everyone knows that the servicers are nowhere near that competent.  Or one that claims that a reduction in the mortgage principal is likely to be achieved unless finished off with the words “when hell freezes over”.
  • The business demands payment of an enormous fee… even before obtaining a prospective client’s basic income and expense information, and information about the existing mortgage and home value.  In other words, if he’s not willing to get to know you first, don’t let him screw you.
  • The attorney responsible for the business is not licensed to practice law in the state where the consumer resides.  Or if the attorney responsible for the business doesn’t know in which state he resides.  Or if the attorney responsible has been disbarred… or been convicted of child molestation, or murder, or littering.

Probably want to memorize those… for later… you know.

I can’t wait for Issue 5.0 of Mandelman’s Museletter…

And remember… feel free to email me at

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