McLeod Law Offices

I received a call today from a client what we in the biz refer to as a “Soldiers and Sailor’s Notice.”  I had met this caller a few weeks ago – and at that time, was told that the home mortgage and loan were “in review” by the lender and servicer.  The caller was confident that a modification would be offered – and it would be one they could live with.  I have “I’ll believe it when I see it” view.  But today, the caller had this notice – which was found tied to the front door knob by a rubber bank.  The caller’s question for me: “what does this mean?”

Not An Easy Answer.

While lenders and servicers have gotten better in how they handle requests from distressed homeowners seeking modification of loans, that is not to say that there not problems.  This caller has submitted a modification request and was waiting to hear.  The caller had contact information for people in the loss mitigation department, as well as written correspondence that identified the additional documents that were needed to submit.  Arguably, the loan should not be in Loss Mitigation/Modification Department as well as the Foreclosure Department.

Yet today the caller received what we in the insolvency business call the Soldiers & Sailors Notice.  First, it will look like a rather unsuspecting piece of paper.  At the top, it will likely say:

Commonwealth of Massachusetts

Land Court

Department of the Trial Court

Under that, the name of the mortgagor “and to all personal emitted to benefit of the Servicemembers Civil Relief Act” or similar language.

I’ll save the whole explanation as to why we have these notice procedures for another day.  For now, it’s more important to explain what the caller’s receipt of this notice tells me – as an insolvency professional.

That the caller/homeowner received it tells me that a local law firm has been hired by the lender/servicer to foreclose the mortgage; that they have started the process of protecting and enforcing the lender/servicer’s rights under the mortgage – this includes but is not limited to filing this notice with the Land Court, which is a public record; and that the foreclosure process will continue to proceed unless and until the lender/servicer instructs otherwise.  Unless and until.

In other words, the caller – and any other homeowner reading this who has a similar notice in their hand – has no business assuming that they will get a modification and that the lender will not foreclose.  Period.  If you have received this notice, your first response should be “uh oh”, and then you should contact an attorney.  Actually, it’s ok if you contact an attorney first – rather than simply say  “uh oh.”

A few years ago, I represented a couple going through a modification process – this was before HAMP.  They did not have counsel – they were trying to do it on their own.  They received a Soldiers and Sailors notice – and they had a notice that the property was going to be auctioned on a specific date.  The good folks in the Loss Mitigation department told them not to worry – that the foreclosure would not proceed until they reviewed the modification request.  The clients even had a letter from the lender asking them to submit some additional documents by a specific date: two weeks after the scheduled auction.   What happened? The auction went forward as scheduled.  By the time the couple came to me, they were upset, exasperated and frustrated… and wondering why the Loss Mitigation folks did not communicate with the folks handling the foreclosure.

So if you have a “Soldier’s and Sailor’s” notice, and you have a pending modification request, what it tells me is that the lender/servicer is keeping its options open.  It’s like planning on ham for a holiday dinner, and having a back-up turkey just in case the ham doesn’t turn out well.  Sort of.  I speak from experience on that… I had a bad ham experience at Christmas and I was really unhappy about it.  But I digress.

What receipt of a Soldiers and Sailors notice tells me is that you should be prepared to meet with and retain lawyer who can explain your options to you and map out a strategy.  Now.  Not in a few weeks.  Not after you hear back from the bank.  Now.  It’s sort of like you going to a holiday dinner expecting ham, but rethinking your appetite because you’ve just learned that there might be turkey… and you’re not in the mood for turkey.

Related posts:

1. Lessons in Loan Modifications
2. The Short Sale Option
3. When Should You Start Thinking About Doing a Short Sale?
4. Loan Modification Scams
5. Before Foreclosure Rescue Scammers Start Knocking…

Tags: foreclosure prevention, HAMP, modification, Modifications and Workouts, Mortgages and Foreclosures

This entry was posted on Wednesday, March 17th, 2010 at 3:02 pm and is filed under Foreclosures and Real Estate. You can follow any responses to this entry through the RSS 2.0 comment feed.
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