An Interview with Attorney and Consumer Advocate, James M. Parsa from the Parsa Law GroupWhat was the original intention of the first $350 Billion of the $700 Billion Wall Street Bailout? What is now known as TARP (Troubled Assets Relief Program).Attorney James Parsa from the Parsa Law Group:Well, that is a complex question that doesn’t really have a 100% clear answer. If you’re asking how the bailout was sold to the American people, then we can definitely say that it was intended to help struggling homeowners prevent foreclosure and save their homes. This was supposed to be done through Fannie Mae and Freddie Mac. If you’re asking how the Bush Administration sold the bailout to Congress, then we can say they framed it as the critical tool they needed to prevent total Armageddon in the financial markets and the imminent collapse of the American economy.
If you’re asking how the banks receiving the money intended to use it, then there are many disparate answers… some good, some very troubling, some downright shameful. Some lenders such as Freddie Mac and Fannie Mae did use some of the money they received to help homeowners in difficult mortgage loans to modify their mortgages. They did, however, place many restrictions and conditions on those that could receive help, and the result was that fewer than 100,000 families received mortgage assistance, and all the while millions upon millions of folks are still waiting or help. Some banks used the money pay off debts, to make investments and to buy other banks, which is clearly not helping anyone at the homeowner level. Still others are simply clinging to their money, because of ongoing uncertainty in the financial markets. And even worse, some banks are just not disclosing or tracking how they used the money and have even been quoted as saying that they would prefer reporters keep this under wraps for them.
Didn’t some financial executives go on a lavish retreat in California?Attorney James Parsa from the Parsa Law Group:That’s right! Some executives from AIG spent $400,000 on the luxurious and exclusive St. Regis resort in Monarch Beach, CA. They say that it wasn’t TARP money, but how do you go about accounting their money and the TARP money when they are being so secretive about how it is being spent?
So where does this leave regular Americans that are struggling with their mortgage payment?Attorney James Parsa from the Parsa Law Group:Well if people can just realize that the bailout as it currently stands was not for them, then they are off to a good start. What President Obama will do with the remaining $350 billion remains to be seen, but it may be months until those decisions directly affect people that are in trouble right now.
People need to carefully weigh all of their options and decide what is the best path for them with the limited time they have left in their particular situation. The first decision they need to make is whether or not they want to keep their home. This will help get them started in the right direction. Because if they don’t really want to keep it then they can do a Short Sale, a Cash for Keys Program, or a Chapter 7 Bankruptcy, of course all depending on their unique situation.
If they do want to save their home, then Loan Modification is the smartest alternative at the moment, and as I mentioned in another interview, they can do the Loan Modification themselves, work with a non-profit foreclosure prevention advocate, or hire a Law Firm that specializes in Loan Modifications. Another option is a Chapter 13 Bankruptcy, which typically results in restructured debt payments that last 5 years, but allow you to keep your home and other personal property.
So do you think that banks and lenders will come around and give people the mortgage relief they need?Attorney James Parsa from the Parsa Law Group:Maybe. As their home retention divisions finally ramp up and get the proper staffing, they may become more efficient at dealing with the millions of homeowners that are having trouble making their mortgage payments. But if past actions are an indicator of future behavior, then we are in trouble… to date they have consistently proven that they are out to save themselves and have an army of lawyers on their side to protect their interests and those of their shareholders. The Obama Administration may have to force a set of rules and regulations for Loan Modifications, because what I’ve seen currently is a joke. The lender initiated Loan Modification offer letters that are going out to some people have some pretty bad terms, they are really only a token offer to comply with new laws that have been passed in states like California. And again, people need real help now, not three months from now.
What does California require?Attorney James Parsa from the Parsa Law Group:In California, lenders are required to try work out a Loan Modification with a borrower before foreclosing. But the devil is in the details, as they say, because there aren’t any guidelines for forgiveness of missed payments, their attorney fees, costs of collection, good faith payments, adjustment of principal balance, fixed interest rates, etc. So most of the time, the Loan Modifications they offer people require huge good faith payments and the monthly mortgage payment isn’t as low as it should be.
How is the Parsa Law Group positioned in all of this?Attorney James Parsa from the Parsa Law Group:Well, we realize that a line in the sand has been drawn, and we have chosen to be on the side of struggling homeowners. Throughout my 17 year career, I have always advocated and fought for the little guy in insurance cases, work injuries, personal injuries, labor disputes, and now in helping people fight to keep their home and get a fair monthly mortgage payment. We are fortunate to have been able to help thousands of families save their homes, and will continue to do so while no one else is stepping up to the plate.
Any final thoughts?Attorney James Parsa from the Parsa Law Group:I always remember a quote from President Theodore Roosevelt, ”In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” People that are on the verge of losing their home can’t just sit around and wait for the auction date. They need to take immediate action, take control of their destiny and the future of their home, which is such a big part of any family’s life.
Can people contact your organization if they have any questions?Attorney James Parsa from the Parsa Law Group:Absolutely, and as usual, my staff and I are available to answer any questions people have about the options in their particular situation. They can call my office at 1-800-585-1179 or go to my website
www.parsalawgroup.comJames M. Parsa
Attorney at Law
Parsa Law Group
1-800-585-1179
http://www.parsalawgroup.comBetter Business Bureau Rating:
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