Writing a Qualified Written Request

Under RESPA section 6 any servicing complaints or issues addressed to your lender / servicer must be addressed and resolved within a certain time frame.

Those time frames can be found on the HUD site here: HUD RESPA

An at risk borrower should always utilize this section of RESPA to begin the loan modification process.

It will give you the opportunity to gather all of the documents in the possession of your loan servicer.

Once you have these documents in your possession you may be able to identify problems with your loan, misrepresentations made to you, missing documents and more.

I can't tell you how many times I have found that the lender does not have the signed note, or under disclosed APR's, improperly constructed TIL's, HUD 1's that don't match the TIL, Un signed altered HUD 1's, wrong names on documents, notary information missing, etc.

If you are unsure of what to do with these documents it may be worth paying someone to do a forensic audit on your file.

To begin the process of negotiating a modification I recommend you tailor the letter below to your situation and fax it to your lender as well as sending it by certified mail.

Below is a sample of a Qualified Written Request.



Impossible Lender
12345 SW Any Street
Anywhere, US 12345

Re: Loan # 1122334455
Borrower: John & Jane Doe
Property
Address: 123 Any Street
Anywhere, USA 12345


This is a "Qualified Written Request" under Section 6 of the Real Estate Settlement Procedures Act (RESPA).

We are writing to request:

(1) Copies of all documents pertaining to the origination of our mortgage including our loan application, Right to Cancel, Deed of Trust, note, adjustable rate note, addendum to the note for the interest only payment period, Truth in Lending statements, Good Faith Estimate (GFE), HUD 1, appraisal, and all required disclosures and rate sheets associated with this transaction for the above referenced loan. The copies should be legible and all documents shall be copied in their entirety.


(2) A copy of the loan history including all payments made, all fees incurred, what has been paid out of the escrow account, and how all payments were applied. This information should cover the entire life of the loan.

(3) Please forward ALL of the requested documents to us at:
John & Jane Doe
123 Any Street
Anywhere, USA 12345

We have reason to believe that the loan terms were misrepresented to us at the time of application and further obscured and possibly modified prior to signing. We believe that our income may have been inflated on the application. We also have reason to believe that certain statements were not provided for our approval prior to closing, and that signatures may have been forged on various documents. It is also our belief that certain documents may have not been presented at all.

As you are aware we have fallen behind in payments.

Our home is currently valued at less than we owe your bank, making it impossible to refinance or sell.

We started the process of trying to renegotiate this loan in January 2008 when we spoke with your loss mitigation department. On 1/03/08, we faxed a letter of hardship, along with bank statements and pay stubs as requested. I was advised that someone would contact me within 7-10 working days and there would be no problem getting assistance to bring the account current and capitalize the arrears and negative escrow. On 2/10/08, I called back, as I hadn’t heard from anyone. I was told my payment was going to be $2,300.00. I hung up the phone in despair and in tears. If we could make a payment of $2,300.00 we would not be delinquent.
Since January I have again spoken to the loss mitigation department, Home Retention, Work Out Department, and any one else who would listen. I have involved 995HOPE as well as a number of other not for profit agencies.

The situation is urgent. YOUR BANK can not continue to drag there feet in this process. We do not want to see our home going into foreclosure we want to find a solution pleasing to YOUR BANK, ourselves, as well as the investors that hold the loan. It would behoove all parties to come to amicable solution today!!!

We are very proactive in keeping our family home. We do not want to loose it, nor do we have to, we can make a reasonable payment.

We have been given the runaround by the voice recognition call routing system on numerous occasions. We have talked to various agents with different versions of what the loan modification process really entails. The customer service provided to us to date has been less than adequate.

We want copies of EVERY document we have ever signed with your company along with a full accounting of our loan from it’s inception.

Let this letter serve to document our request to have my communications responded to in a timely manner.

I can be reached at 555-1212 whenever YOUR BANK wishes to contact us. If we are not available we will call you back promptly if a message is left with the phone number and extension that we can actually call and get thru on. Our email address is Modify Our Loan@EMail.com, and this is probably the quickest way to contact us.

We understand that under Section 6 of RESPA you are required to acknowledge our request within 20 business days and must try to resolve the issue within 60 business days.

In closing we are not trying to get out of paying anything only having the loan modified and the interest rate lowered. We are not looking for a short term band-aid. We want a payment we know we can live with, one that will not get us into trouble again.

Sincerely,

Hope Now or is it a Scam?

One need only review the cast of characters below to get some insight into who is behind the "free" help out there'

It appears that the same banks and lenders that put you in the toxic loan that has caused you problems, are now posing as Hope Now ”do gooders” by giving millions of dollars to fund this national campaign to help homeowners fix their loans and save their homes.

I certainly don't think that an organization that obtains it’s funding from banks and lenders is truly looking out for the consumers best interests.

These "free" counselors are not interested in identifying predatory lending and mortgage fraud.

They aren't examining their clients loans to see if they are legal and not predatory or fraudulent.

They most definetly do not have the mortgage and legal skills to combat and remedy these predatory lending situations.

My thought is that finding violations and predatory issues with these loans would be biting the hand that feeds them.

So much for the "free" help being provided by The Hope Now Alliance.


Servicers/Lenders/Mortgage Market Participants

Acqura Loan Services
American Home Mortgage Servicing Inc. (formerly Option One)
Assurant, Inc.
Aurora Loan Service
Bank of America
Carrington Mortgage Services
Chase
Citigroup, Inc.
Countrywide Financial Corporation
EMC Mortgage Corporation
Fannie Mae
First Horizon Home Loans and First Tennessee Home Loans
Freddie Mac
GMAC ResCap
Home Loan Services, Inc. (d/b/a First Franklin Loan Services & NationPoint Loan Services)
HomEq Servicing
HSBC Finance

HSBC Consumer Lending
HSBC Consumer Lending II
HSBC Mortgage Services
HSBC Mortgage Corporation

IndyMac Federal Bank
LandAmerica Financial Group, Inc./LoanCare Servicing Center
Litton Loan Servicing
MERS
National City Mortgage Corporation
Nationstar Mortgage, LLC.

Ocwen Loan Servicing, LLC.
PMI Mortgage Insurance Co.
Radian Guaranty Inc.
Saxon Mortgage Services
Select Portfolio Servicing, Inc.
State Farm Insurance Companies
SunTrust Mortgage, Inc.
Washington Mutual, Inc.
Wells Fargo & Company
Wilshire Credit Corporation
Trade Associations

American Bankers Association
American Financial Services Association
American Securitization Forum
Consumer Bankers Association
Consumer Mortgage Coalition
The Financial Services Roundtable
The Housing Policy Council
Mortgage Bankers Association
Securities Industry and Financial Markets Association

If these are the players offering "free" help, I for one recommend watching your wallets and heading for the hills.

Groups Funded By The Hope Now Alliance offering "free" help.

The "Free" Counselors

ACORN Housing Corporation
Catholic Charities USA
Citizens’ Housing and Planning Association, Inc.
Consumer Credit Counseling Service of Atlanta
HomeFree- USA
Homeownership Preservation Foundation
Housing Partnership Network
Mission of Peace
Mississippi Homebuyer Education Center- Initiative
Mon Valley Initiative
Money Management International, Inc.
National Association of Real Estate Brokers- Investment Division, Inc.
National Community Reinvestment Coalition
National Council of La Raza
National Credit Union Foundation
National Foundation for Credit Counseling, Inc.
National Urban League
NeighborWorks America
Neighborhood Assistance Corporation of America
Rural Community Assistance Co.
Structured Employment Economic Development Co.
West Tennessee Legal Services, Inc.


Is it really "free help" or more akin to the YSP & SRP paid to brokers and bankers for locking their clients in at a higher interest rate?

Isn't this akin to when someone sues you and you offer to have your brother-in-law the attorney represent them for "free"?

There has been alot of PR from the major lenders lately outlining the trend that loan modifications don’t seem to be working as well as people thought they would.

The banks are claiming that they are seeing a rise in people defaulting on their modified loans in the 58% range.

I have commented previously that the lenders were not making meaning ful modifications designed to create a long term solution for homeowners and now here is the proof:

"Quote Dan Harris from December 15th"
from Blogged at National Association of Mortgage Fiduciaries

The reality behind the re-default rates is that the banks FORCED homeowners to accept loan mods that didn’t fit the bill.

NOW in order to stem the tide of modifications (after being bailed out with taxpayer money) they have embarked on a major PR campaign designed to make it seem like homeowners who are getting loan mods are deadbeats who can’t/won’t pay no matter what you do for them.

Lowering someone’s rate to 7% from 8.99% and allowing them to capitalize the arrears might seem like relief to a homeowner facing foreclosure.

But if those modified payments are too tight they will re-default.

What is needed is someone to expose the truth behind lender initiated loan mods and what the terms were. An in depth review will reveal the truth.

Lenders and servicers have continued their drive to maximize returns and minimize their losses by modifying loans and lowering payments as little as they can get away with.

Now that they have government money in their coffers they see no need to modify, and if they turn public opinion against modifications they won’t have to.

That is the truth!

End Quote by Dan Harris"


_____________________________________________________

Now, in an article from Monday December 22nd an Indmac Spokesman has confirmed what I said:

THIS IS EXACTLY WHY LOAN MODS ARE RE-DEFAULTING

A spokesman for IndyMac federal bank, which was taken over by the Federal Deposit Insurance Corp in August, said up until a few months ago, lenders were only tinkering with loan terms and not doing true modifications.

"Modifications in the past were never about finding the borrower an affordable payment," Evan Wagner said. "So I think it shouldn't be surprising that you are seeing a lot of these folks redefaulting."

Quoted from this article:

US mortgage re-defaults rise, no sign of slowing

Can I Modify My Own Mortgage

Should I Modify My Own Mortgage

In the current economic downturn many homeowners have become at risk borrowers. Help has arrived for these folks in the form of loan modifications.

Along with this new boom in loan modifications have come the predators looking to overcharge and take advantage of people in need.

With that in mind I have laid out my recommendations for at risk borrowers in search of help.

Loan modifications are performed by many lenders with no fee to the homeowner. However these lender initiated modifications can come at a price.
Lenders are negotiating with a few things in mind:

1. Their Best Interest
2. Maximizing Their Returns
3. Minimizing Their Losses

So when you speak with your lender be sure to do your homework. Perform your own complete financial analysis that covers ALL of your income & expenses. Knowing what your actual income available for housing is, could save you from accepting an offer that is not sustainable long term.

HUD-approved Housing Counseling Agencies perform loss mitigation/loan modification services for free. These agencies are supported by our tax dollars.

Many of these agencies have become overwhelmed with cases.

Like any other government run enterprise the level of service will not always be stellar. Unfortunately, I have seen cases where borrowers were turned away being told they did not qualify for a modification when in fact they did qualify for help.

So if you choose this route and you are told that you don't qualify, don't give up.

As for the LO's out there who think this is their opportunity to collect fat checks, be careful who you work for. Make absolutely sure that the company handling your clients is based on honesty, integrity, being completely above board and actually works your files diligently in the best interest of the homeowner.

I have seen many companies out there collecting large upfront fees and letting files languish with no work being performed on them. In many states the up-front fee is illegal, don't get involved with anyone who is breaking the law.

If this describes your company get out and take your clients files with you. This could cause you major problems in the long run. No amount of commission is worth ripping off consumers in distress. Imagine the heartache caused to the trusting family who loses their home because of you and your company.

There are attorneys out there who have also jumped on the bandwagon and see this as a way to augment the lost real estate income they had before the bubble popped. If you decide to hire an attorney to work on your loan modification negotiation I suggest a thorough interview prior to doing so.

Ask these questions:

1. How many modifications have you completed?
2. What will be the costs?
3. Flat fee or Hourly?
4. Get names and numbers of satisfied clients you can speak with.

With that in mind, a good attorney with loan modification experience could be a great way to fix your toxic loan.

I personally prefer the loan modification company with on staff attorneys.

My belief is that this type of company has the diversity of experience needed to negotiate through the maze of roadblocks put up by lenders. This type of company should employ people with backgrounds in real estate finance, real estate sales, real estate & foreclosure law, loan processing and more.

By pooling these different types of experience and bringing them to bear on your behalf you get the best of all worlds.

But again caveat emptor, there are companies out who tout these benefits without actually being able to deliver.

I recommend a full interview with them as well:

1. Go to their office if at all possible
2. Meet their "on staff" attorneys
3. How many modifications have you completed?
4. What will be the costs?
5. Flat fee or Hourly?
6. Get names and numbers of satisfied clients you can speak to

Finally if you are in trouble with your mortgage remain calm, collect all of your documents and seek help right away.

A call to your lender could go a long way, at the very least it will let them know you have a problem, want to resolve it, and are interested in what options they have available.

Just don't forget your lender / servicer is a debt collector and as such they ALWAYS have THEIR best interests at the heart of any relief offered. Study what they offer with a discerning eye and ensure it is something that you can live with.