How To Modify Your Mortgage

We the People vs the Banks on loan modification

2010-01-17T10:18:00.006-05:00

There is a petition circulating and picking up steam in the online world designed to get the attention of lawmakers on Capitol Hill. It is simply titled, The Petition to the US Government from American Homeowners.

With hundreds of thousands of homeowners facing foreclosure and running into bureaucratic delays at the hands of less than sympathetic bank employees, constantly lost documents, trial modifications never mailed out, trial periods past but never made permanent and foreclosure sales in the midst of supposed loan modification review the cries for fairness & accountability are reaching a crescendo.

The HAMP system as it stands rewards banks for making a trial modification by advancing them nearly 1/3 of the monies available for the entire modification at the time homeowners enter the trial. Given the truth that entering the trial modification is such a small step in the process, along with the banks less than stellar performance on making these modifications permanent it appears that the compensation may be premature and out of line.

When a borrower enters the trial modification the servicer receives $1,000. Bank of America who has placed over 200,000 borrowers into trial modifications received has received over $200 million dollars for simply placing homeowners into "trial modifications" with no guarantee of ever getting a permanent modification. At one point the bank had rushed 180,000 trial modifications into the mail without having complete income documentation, leaving in doubt the ability to complete these modifications.

As of the latest Treasury report, Indymac / OneWest has entered 19,623 homeowners into the trial modification phase and accomplished an astounding ZERO completed modifications; yet this dismal effort has netted the investment group over 19 million in taxpayer dollars. Many borrowers, and consumer advocates complain that Indymac is making no effort to make these modifications permanent and in fact has invented new ways to deny modifications.

Many servicers mass mailed trial modifications to at risk borrowers to get their share of the free money offered for simply getting a borrower into the trial plan. They then seemingly pull out all the stops to halt the process and deny making the modifications permanent.

Indymac borrowers all across the country are searching for attorneys to bring class actions for the trial modifications that were sent out and denied before the 2nd payment was received by the bank. Even in these cases the servicer was paid $1,000 for entering the homeowner into the trial period and then promptly dumping them out of the plan.

I have spoken to homeowners who say the lender constantly get the financial income and expense numbers wrong and will not listen to reason or go over the numbers they use to deny the modification. Mitha, an embattled homeowner from Brooklyn, NY complains "the customer service reps blame the "negotiator" and will "never" put that person on the phone" she went on to say; "calls to Indymac employees result in well scripted answers that always end in favor of the bank".

The current system appears to be a mess and the trial period has created a new layer of bureaucracy in an already bogged down system. The financial benefit gained by servicers for simply putting a homeowner into the trial is great. The monies left to make the modification permanent pales in comparison.

Banks who made the original loans with little or no documentation and closed them sometimes in less than a week from application now routinely take 5,6 or 7 months to approve a loan modification. The irony doesn't go unnoticed.

To further complicate the situation lenders are outsourcing some of the work to 3^rd party providers who are even worse at processing the paperwork, and have little access to a borrowers account. Bank of America uses the HOPE team a 3^rd party that goes out of its way to make homeowners believe it is part of the bank. Until recently SunTrust used LoanCare this outsourcing caused so many delays and problems Suntrust recently pulled back all of its files from LoanCare. Some lenders are using Zenta, which has a myriad of addresses and if you send paperwork to the wrong address it is returned by Zenta employees as undeliverable.

The Petition to the US Government from American Homeowners seeks to address the many concerns of homeowners facing foreclosure.

Click Here to See The Petition

HAMP | HAMP Loan Modification Report Card

2010-01-11T19:51:00.004-05:00

HAMP HAMP Loan Modification

A How To Guide

On March 4th, 2009 the Obama administration revealed its plan to help millions of distressed homeowners in danger of foreclosure. The program was proudly touted as the definitive way out of the current housing and mortgage crisis.

The year has ended and since April 2009

the program is responsible for 728,408 active modifications. 697,026 are in the trial period

and 31,382 have been made permanent.

Although there has been plenty of time for loan servicers and lenders to strengthen their efforts and start making a considerable difference in preventing home foreclosures, many servicers have repeatedly chosen to aggravate the crisis through noncompliance and excuses.

Prior to the introduction of HAMP, servicers' efforts to modify loans had picked up a considerable amount of steam. By March of 2009 loan servicers' efforts in private in house modifications were running at a pace of 120,000 per month. That means that if left to their own devices servicers and lenders had they continued at that pace would have completed modifications on more than 1.2 million loan modifications.

It is now harder than ever to get assistance from your lender due to the new heavy documentation and government bureaucracy created by HAMP. It is not however an impossible task. Even with its bureaucratic red tape many homeowners have been able to get payment reductions that helped them save their homes.

If you are looking for assistance with HAMP be sure to get up to speed and learn everything you can about the guidelines and requirements. Talk to your lender BEFORE submitting an application. With HAMP you only have one bite at the apple. You have to get it right on the first try.

Here is what you will definitely need to submit a complete file to your lender:

Last 4 paystubs for everyone in the house who earns money.If you don't have paystubs, you will need a cash letter from the wage earner defining what they take home monthly. (Yes your lender WILL accept this)(It's in their best interest).

2 years W2's for each wage earner in the home.

2 years tax returns

2 months bank statements - your lender will require ALL pages of your statements. If you don't have them, go to your bank and get a 2 month printout, make sure that someone in the branch stamps and signs the printout or your lender may not accept it

If you are self employed you will need to provide a profit and loss statement that spans a minimum of 3 months, I recommend you do this for a 6 month period

A well written concise ONE PAGE hardship letter

An income and expense sheet that shows Monthly Numbers for Gross Income, Net Income and all household expenses

If you take the time to prepare and do it in a well organized manner you will improve your chances of getting a modification under HAMP greatly.

Get educated QUICKLY; learn everything you can about the HAMP guidelines and what your lender offers in the way of assistance. Plan your request for assistance and be organized and prepared BEFORE you submit anything to your lender.

Remember the disclaimer they read you when you call? It's the one where they tell you they are required by law to advise you they are attempting to collect a debt and anything you tell them will be used for that purpose. No matter how nice the representative sounds, they work for the lender and they are there to help collect your payments.

Homeowners looking to take advantage of HAMP should always make sure to Get Educated so they can Get Modified and Get On With Their Lives...

U.S. House rejects mortgage "cramdown" measure

2009-12-14T09:13:00.001-05:00

U.S. House Rejects Mortgage "cramdown" Measure

WASHINGTON (Reuters) - In a win for the banking industry, the U.S. House of Representatives voted on Friday to reject a measure that would have allowed bankruptcy judges to change the terms of mortgages for distressed homeowners.

http://www.reuters.com/article/idUSTRE5BA3CN20091211

Yet again the powerful banking lobby with plenty of taxpayer cash available has defeated the interest of the taxpayer by lobbying hard ans fast against a bill that would allow bankruptcy judges the ability to use their discretion when discharging 2nd mortgage debt.

As long as politicians fear losing elections the will and best interest of the people will never prevail.

Our government has become the posession of the special interest. One only need look at the debate and progression of this issue as an indication of what happens when politicians have the ability to give money to their campaign contributors in the form of a bailout unabated by rules prohibiting the use of these same funds for campaign contributions.

I have spoken to many, many homeowners who have tried unsuccessfully to get assistance from the same Congressmen and Senators who have thrown this bone to their banking industry benefactors.

WHAT THEY HAVE DONE HERE IS A SHAME....

Write, email and/or call your politicians TODAY!!!

Find your congressperson here:
https://writerep.house.gov/writerep/welcome.shtml

Find your Senator here:
http://www.senate.gov/general/contact_information/senators_cfm.cfm

Come Tell Us Your Modification Horror Stories:
http://www.loanmodman.com

Indymac Class Action Needed?

2009-10-31T23:09:00.003-04:00

As anyone who has tried to get assistance on their toxic predatory loan from Indymac knows, since the takeover by two former Goldman Sachs Blue Bloods the bank has been stonewalling and pulling out all the stops to prevent loan modifications.

While under the supervision of Sheila Baird and the FDIC the modification flow was impressive and the corporate philosophy was geared towards actually help the borrowers.

In January 2009, the FDIC sold off the mortgage portfolio to a company called IMB Management Holdings, LP. After the sale Indymac emerged as One West Bank.

The deal included the purchase of $16 Billion in mortgages for $13.9 billion. The Goldman Blue Bloods from Dunes Capital were also able to get some other sweeteners for their efforts $7 Billion in assorted securities and more than 30 banking branches.

This sale is probably one of the most destructive moves against homeowners suffering from the burden of trying to make payments on their predatory subprime loans since the beginning of the mortgage meltdown.

Any homeowners hoping to get help from the "tycoons" who bought this company are in serious trouble.

Now that the robber Barrons from Dunes Capital Dan Neidich and Steve Mnuchin are at the helm they have recruited Terry Laughlin, former Chairman and CEO of Merrill Lynch Bank who masterfully makes public statements loaded with qualifiers such as this one on August 11, 2009: "Going forward, One West will apply HAMP to all of the eligible loans that it owns as well as all eligible loans that it services for third parties".

He didn't tell you that have figured out how to internally tweak the numbers to reduce the number of "eligible" loans.

They have also taken a hard line on telling borrowers looking for assistance that their "investor" doesn't allow for modification.

I am reminded of the scene in the movie Wall Street when Gordon Gecco buys Bluestar Airlines and reveals his plan to crush the union and sell of the pieces. Welcome to a real life version of that story, starring the robber Barrons from Dunes Capital Dan Neidich and Steve Mnuchin.

They purchased Indymac for 40 cents on the dollar, now when they foreclose on a property if they can recover half of the loan amount, they will still make a 20% profit. This is why they are stonewalling, lying to customers and foreclosing on properties faster than bureaucrats waste money.

Immediately after taking over Indymac the corporate raiders at the top instituted a deceptive program where they offered up phony modifications to troubled homeowners.

They duped thousands of homeowners with this scam, the modification terms appeared to be fantastic and the distressed homeowner's believed that they had saved their homes. They signed the documents and sent along the required initial payment. Indymac then cashed the check, and promptly issued denial letters. What a great way to fill the coffers with cash immediately after buying the company.

These guys got a better education at Goldman Sachs than they offer at Harvard Business School.

Suffice it to say that the newly emerged One West Bank does not operate in good faith when borrowers ask for assistance. Instead they use every trick in the book to screw their customers so that the Robber Barrons can continue to Raid the Corporation.

If you are an Indymac customer search for one of the many class actions that are beginning to pop up against Indymac and join the class.
Come Tell Us Your Indymac Horror Stories

How Anyone Can Get A Loan Modification Approved

2009-03-15T01:08:00.002-04:00

Hi Homeowners,

Recently I have noticed many posts on forums and blogs regarding loan modifications.

Alot of this information guides distressed borrowers to seek help from HOPE.

There are many organizations out there with the HOPE acronym in their titles. The most popular one is 995 HOPE.

Keep in mind that these organizations are only going to assess your finances and give you some advice. IF THEY think you qualify then they will contact your lender and try to help you get a modification.

I have seen many homeowners who were initially told by these well meaning individuals that they didn't qualify and should short sell their homes. Only to find out later that they indeed could get a loan modification.

Often I see suggestions that recommend an attorney, and if you are facing an imminent foreclosure that is probably the best advise.

A few things to know about modification:

The numbers you send to your bank have to make sense. Write them down on paper and do the math.

If you are not able to demonstrate an ability to make payments AFTER a reasonable modification (5 percent - 6 percent 30 year fixed) you will not get one approved.

Depending upon your lender, there are a number of ways they will work with you. I have personally negotiated with most of the lenders and servicing companies left in the market.

When you call your lender they will offer to send you a package to fill out. Don't be discouraged. If your lender said they were going to send a package, they will and it should take 3 - 5 business days to recieve it. If you haven't received it in a timely manner, follow up by telephone.

Most importantly you can begin to take control right now TODAY. Gather the following:

Last 4 paystubs for everyone in the house who earns money.If you don't have paystubs, you will need a cash letter from the wage earner defining what they take home monthly. (Yes your lender WILL accept this)(It's in their best interest).
2 years W2's for each wage earner in the home.
2 years tax returns
2 months bank statements - (PSST... If you have big bucks in the bank, your modification will not happen!) Your lender will require ALL pages of your statements. If you don't have them, go to your bank and get a 2 month printout, make sure that someone in the branch stamps and signs the printout or your lender may not accept it.

That should be the extent of documents you will need to provide to your lender. (unless you are self employed).

The above documents will be required to be submitted to your lender. Make copies of them now so you are prepared and ahead of the game.

YOU CAN DO THIS!!

Now gather ALL of your bills and make a COMPLETE list of ALL of your monthly expenses, food, transportation, tolls, gasoline, heating bills, electric bills, water bills, trash & sewer bills, car payments, all forms of insurance, child care, tuition, camps & clubs, school lunches, pet food, etc.

Absolutely every dollar you spend needs to be accounted for, lest you underestimate your living costs and negotiate a modification that won't work.

OK... Now your rolling!

Get your totals down on paper and do the math. You may very well be in the red CURRENTLY, but calculate what your new payment would be and do the math again using your new modified payment. If you're above water with the new number you are well on your way to a new life, with one less worry.

If you want more guidance I am here, and would be more than happy to help. I have negotiated MANY, MANY modifications with lenders and know the ropes.

I do not think the average person needs a professional to negotiate a modification, unless the time frame for foreclosure is closing in.

My experience with MOST attorneys is that they are aloof, unreachable, unresponsive and condescending. If you can find one with empathy God bless you, but you don't need a professional to get a modification from your lender.

Note to self and YOU:

If you are in danger of iminent foreclosure then you need an attorney right away.

Get Ready, Get Educated - Get Modified and Get on with your life...

GOOD LUCK!!

Once the income and expense situation is in hand you will need to put together some other info:
Monthly Income & Expense Letter
Hardship Letter
Loan Modification Proposal

There a number of acceptable hardships and you should review them to see which ones apply to your situation.-
Adjustable Rate Mortgage Reset-
Payment Shock-
Death of Spouse of Co-borrower-
Damage to Property (natural disaster or unnatural)-
Divorce-
Failed Business-
Illness-
Job Relocation-
Loss of Job-
Incarceration-
Marital Separation-
Military Duty-
Medical Bills-
Reduced Income-

Your loan modification proposal should lay out concisely each piece of the modification you are requesting, ie; principal balance reduction, interest rate reduction, waiver of fees and penalties, payment deferment or forebearance, and other info.

I have sample proposals, and letters in my book and CD, and have laid this out in explicit detail so that the average person can understand it.
I am not hocking my book, just letting you know that there a number of them out there that can help lead you through the process.

If you are going to attempt this yourself you should get one. Costs for these runs from $40 for e-books up to $395 for kits sent to your home.
Always remember banks do not want to foreclose on your home. They take huge losses on foreclosed properties.

If you are behind on your mortgage, loan modification may be the perfect solution. Many a distressed homeowner have negotiated a loan modification and saved their family home from foreclosure.

You can too!

DAN HARRIS - ALL RIGHTS RESERVED 2008

Dan Harris owns and operates The Home Retention Group, Harris Capital Management and Mobil Settlement, LLC in New York and can provide detailed information on Title Insurance Issues, Mortgage related info, Loan Modification negotiation, New York real Estate and more.

He can be reached at LoanModBook.com , or CashDan.com or TheHomeRetentionGroup.com

Countrywide Admits to Public Relations Lies

2009-01-24T05:18:00.002-05:00

In court, Countrywide says its ads are ‘puffery’

Defending lawsuit, mortgage company mocks loan modification assurances

In marketing, advertising and testimony before Congress, Countrywide Home Loans has said repeatedly that it is working hard to modify the mortgages of financially strapped borrowers caught up in the subprime meltdown. But in a New Hampshire court, attorneys for the lending giant are singing a different tune, describing such assurances as “mere commercial puffery.”

Saying the modification offers are “only Countrywide’s vague advertisements,” attorneys for the lender are asking the court to throw out a lawsuit alleging breach of good faith, fraud, negligence and misrepresentation, which was filed on behalf of a family that was refused a loan modification by the California-based company.

This is an unbelievable moment of honesty on the part of Countrywide. I have known for a long time that much of the "media hype" out there regarding what lenders are doing to help at risk borrowers was nothing more than an attempt to garner good favor through their public relations front men. The only way to fix this mess is with a moratorium on foreclosures that would extend for 12 - 18 months. Once that is in place lenders would have no choice but to modify bad loans to get income from these assets.

Stay tuned... More to come

Full article here: http://www.msnbc.msn.com/id/28645505/

Here Comes The Loan Modification Boom

2009-01-16T06:52:00.003-05:00

The refinance boom is over and the real estate bubble has popped.

More than 30 million Americans' are upside down in their homes with negative equity.

Formerly hot markets in New York City, Arizona, Washington, D.C., California and Florida are now suffering without buyers or even prospects. Many previously booming markets are seeing double-digit declines in sales. In Florida the drop in home prices is staggering, and this has become ground zero for the real estate bust.

When prices fall, and they certainly have, that's a problem. Nationwide real estate property values have fallen. So properties that people bought at the peak of the market might be 75% of the value they paid, and unless they put at least a 25% down payment into the property, they're "upside down", and owe more than the property is currently worth. Being upside-down is not a big deal if you have a sustainable loan. You just hang on, and eventually things will go back to normal. You simply make payments until the balance goes down, values will go back to at least where they were, and all will be right with the world. When interest rates drop while you're upside down, you're in no position to take advantage of them. After all what lender is going to lend you money if your home is worth less than you owe?

The longest-running home loan refinance boom in the history of the mortgage industry has come to an abrupt end. The dramatic and sudden collapse of the mortgage refinance boom has sent shock waves throughout the mortgage and real estate segment of the Nations' economy. Loan officers are being laid off en mass. Lenders are rethinking their loan product offerings and credit criteria.
The prospects in the housing and mortgage markets for the immediate future are bleak. However, while the outlook for mortgage brokers is expected to decline over the next year or so, people involved in working out loans with loan modifications will definitely hear their phones ring more often.

Bring on the "Loan Modification Boom".
With little chance of refinancing, borrowers and lenders alike have to find a way to make corrections to the millions of bad loans that are on the books. It's the latest craze in the mortgage business. Basically, lenders are undoing everything they did. The mortgage crisis has borrowers and lenders alike trying to renegotiate new terms to correct the problems with these bad loans.

This time you don't need an appraisal, good credit, or equity. You simply need to have a situation in which your current mortgage is unmanageable. Whether it's a hardship that has you behind in payments, or a skyrocketing ARM adjustment that has you behind the 8 ball, all you need is a little bit of knowledge and some persistence and you too can jump onto the loan modification bandwagon.

DAN HARRIS - ALL RIGHTS RESERVED

New Loan Modification Government Regulations

2009-01-10T09:52:00.003-05:00

Recently there have been warnings by many in the government and the media regardiing the services of loan modification companies.

I for one agree that the newest mortgage meltdown crisis has given way to a new group of would be predators. But I differ greatly on how to handle this problem.

It is my opinion that the Federal Government should enact legislation governing the operation of these companies with regards to their ethical and fiduciary responbsibilities, as well as the ability to collect fees.

Instead of restricting the operation of loan modification companies, I believe their work should be encouraged, regulated and monitored.

Due to the stalling and uncooperative nature of MOST lenders and servicers there is a tremendous need and many benefits to having these companies available in the market place today.

Consumers have always benefited from having as many choices as possible in the market when it comes to service providers and I don't believe that this industry should be any different.

Many loan modification companies are run ethically and employ highly experienced finance and real estate professionals with years of banking, loss mitigation and loan workout experience.

If the government is going to get involved in oversight of this new business model, it should do so with an eye towards opening up competition and protecting the consumer simultaneously.

The current RUSH to curtail the operation of such companies will hurt consumers in the long run.

For example the State of Washington DFI has put rules in place as follows: "The Department of Financial Institutions (DFI) has received a number of inquiries regarding the legality of providing this service in this state. While there is nothing inherently illegal about this business, those providing this service in the State of Washington must be licensed as loan originators, mortgage brokers, or consumer loan companies and be overseen by the Department of Financial Institutions."

In other words, you MUST use the services of the same guys who put you in the loan in the 1st place.

Didn't "The Department" have oversight responsibilities on this same group that should have prevented the mortgage meltdown in the 1st place?

Is it me? Or do you also want to climb the mountain and SCREAM - ARE YOU PEOPLE OUT OF YOUR MINDS?

I have a GREAT idea, why don't we have some hearings on the hill that matter. Call in some of the more prominant loan modification, loss mitigation, finance, and real estate experts and figure out how to craft meaningful legislation that will allow loan modification companies to help consumers under the law, with strict oversight.

IndyMac & Citi Blocking Loan Modifications

2009-01-03T13:16:00.004-05:00

Real Questions from a distressed homeowner:

Ihave a loan with indy mac, , i also have a second with citi mortg.

Called indy mac in nov, sent paper work to me , it been over a month , i have called and usually on hold for a hour to hour and half. All i want to know if they recieved all my paper work.

Citi morg the same way they never return your calls. I am in such turmoil do not know what to do.

I found a web site for loan mod and i filled out form and they have come out of the wood work. Do i got to an attorney , should i go into default. It seems like everyone i talk to is so disappointed that we are not behind on our payments.

I just need help, it is a big hardship every month, i just wish someone could direct me to someone or someplace to get some real honest answers.

Do i go to a real estate attorney or to a bankruptcy att, any guidance you can give me would be greatly, greatly appreciated.

‘Liar Loans’ Earn Their Nickname

2009-01-01T12:55:00.000-05:00

Michael Corkery writes:
The failure of Hope for Homeowners to prevent foreclosures is sparking a blame game in Washington. The Department of Housing and Urban Development, which runs the voluntary program, says Congress made it too restrictive and expensive for homeowners.

Congressional leaders say the program’s failure — only 357 people have signed up since Oct. 1 — shows that lenders aren’t willing to modify loans voluntarily and they need to be forced to do so.
But HUD officials say other problems are hampering the program’s success. In order to refinance through Hope for Homeowners, applicants must certify they did not supply false or misleading information on a previous loan application. The HUD program also requires homeowners to supply two years of financial records.

HUD officials believe that people who used “stated income” mortgages which required no documentation of income, are having a hard time qualifying for Hope for Homeowners because of incorrect information on their previous loans. It might not all be the borrowers fault. In many cases, mortgage brokers and lenders fudged loan applications.

Either way, it appears that stated income mortgages, which are known as “liar loans,” are earning their nickname.

Here’s a list of the government sponsored and voluntary lender foreclosure prevention programs and how they are faring so far.

Wall Street Journal Digital Network, December 31, 2008

People More Hesitant To Buy Foreclosed Homes

2009-01-01T12:49:00.002-05:00

Kevin Kingsbury and Dawn Wotapka report:

Foreclosures have long been labeled a bargain hunter’s dream and reducing the swelling count is a key part of housing’s recovery. But a new Harris Interactive survey released Tuesday shows decreased enthusiasm for buying foreclosed properties amid concerns about aspects ranging from hidden costs to falling home values, delivering yet another blow to a crippled sector.

“What’s significant about our findings is that just as the market is being flooded with more foreclosures, homebuyers are more hesitant to buy them,” said Pete Flint, co-founder and chief executive of Trulia.com, a real-estate search engine that released the study with foreclosure tracker RealtyTrac.

The survey shows 47% of adults surveyed, saying in November they would consider purchasing a foreclosed home, down from 54% in April. Meanwhile, 80% now express concern about the negative aspects of buying a foreclosed home, up from 69%.

Buying a foreclosure can be a hassle-filled process. Real-estate agents estimate about half of foreclosed properties to be sold by mortgage companies nationwide have substantial damage, The Journal reported earlier this year.

With each foreclosure costing banks as much as $60,000 in standard expenses — from maintaining the property to paying brokers’ commissions — banks want to unload the homes quickly, with many selling below replacement construction costs.

Buyers’ hesitancy comes as the supply of foreclosures is surging. Barclays Capital recently estimated banks and loan investors owned 871,000 foreclosed homes as of Nov. 1, more than double year-earlier levels, and that inventory could peak around 1.4 million in mid-2010.
Earlier this month, RealtyTrac said that November foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 259,085 properties, a 7% decrease from the previous month, but a 28% jump from November 2007. The report also showed one in every 488 housing units received a filing in November, with the highest rate seen in Nevada, home to the Las Vegas bubble market.

Various public and private efforts have been undertaken in recent months to stem foreclosures, from increased loan modifications to moratoriums on removing borrowers from their homes. But many modifications are failing, and levels of foreclosed homes are expected to spike early next year as some moratoriums expire. (See Blog entry dated Thursday, December 25, 2008)

Wall Street Journal, Digital Network, December 16, 2008

Writing a Qualified Written Request

2008-12-28T08:26:00.002-05:00

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?

2008-12-26T19:59:00.002-05:00

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"?

2008-12-25T12:30:00.003-05:00

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

2008-12-21T07:53:00.005-05:00

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:

Their Best Interest
Maximizing Their Returns
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:

How many modifications have you completed?
What will be the costs?
Flat fee or Hourly?
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:

Go to their office if at all possible
Meet their "on staff" attorneys
How many modifications have you completed?
What will be the costs?
Flat fee or Hourly?
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.

Bank of New York Named TARP Custodian

2008-10-17T20:47:00.002-04:00

The Treasury Department on Tuesday chose Bank of New York Mellon (BK Quote - Cramer on BK - Stock Picks) as custodian of the $700 billion government rescue plan recently enacted by Congress.

Bank of New York Mellon immediately began the work of providing custodial, accounting, auction management and other infrastructure services needed to run the portfolio of complex assets the government intends to purchase under the troubled asset relief program, or TARP.

The New York-based bank beat out 70 competitors, 10 of which met the government's eligibility requirements and minimum qualifications, for the three-year contract.

Here goes...

This is only the beginning of this new growth industry.

Are you in the industry?

How are you positioned?

Here Comes The Loan Modification Boom!

TARP Lives! Paulson Secretly Using Fannie and Freddie As Crap Asset Dumpsters

2008-10-13T19:05:00.003-04:00

In the past few days, Hank Paulson's $700 billion trash asset removal plan has quietly transformed into a more sensible $700 billion equity injection plan. But don't think for a minute that Hank's given up on buying up those crap assets. Now, he's just going to be doing it quietly, through Fannie and Freddie, which have just been ordered to buy $40 billion of garbage a month:
Bloomberg: Federal regulators directed Fannie Mae and Freddie Mac to start purchasing $40 billion a month of underperforming mortgage bonds as the Bush administration expands its options to buy troubled financial assets and resuscitate the U.S. economy, according to three people briefed about the plan.
Fannie and Freddie began notifying bond traders last week that each company needs to buy $20 billion a month in mostly subprime, Alt-A and non-performing prime mortgage securities, according to the people, who asked not to be identified because the plans are confidential. The purchases would be separate from the U.S. Treasury's $700 billion Troubled Asset Relief Program.
Let's assume that Hank keeps using Fannie and Freddie as dumpsters for a year. That's $500 billion in crap asset removal right there--far more than the $350 billion Congress has approved under TARP.

This plan is clever on a number of fronts:
The Treasury now has significantly increased the size of its bailout funds: Add the $700 billion approved under TARP to the $200 billion approved in the Fannie and Freddie bailouts, and you've got $900 billion.
Fannie and Freddie can intentionally overpay for crap assets without getting the scrutiny that Hank would have if he'd done this under the TARP plan. Taxpayers will still be on the hook, but this time they won't know about it. And if Fannie and Freddie overpay for the assets, this will help recapitalize the banks.

Artificial demand from Fannie and Freddie will artificially boost the prices of crap assets, thus slowing bank writedowns. Unfortunately, it won't fix the banks. It will just allow them to remain in denial for a while longer.

How will this affect loan modifications for distressed borrowers?

Is this possible?Mortgage / short sale question? Trying to avoid foreclosure.

2008-10-13T14:12:00.002-04:00

Is it considered a short sale if you sell your house for the amount of the mortgage and still have $100,000 you owe in a home equity line of credit? We would be willing to still make payments on the line of credit we just would not own the house anymore.

Loan Mod Sites for Distressed Borrowers

2008-10-12T23:01:00.004-04:00

Below are a few forums that I like for the purpose of discussing loan modification.

Can you add any?

Implode-O-Meter Forum

Loansafe.org

How To Become A First Time Buyer In The Current Real Estate Market

2008-01-27T10:41:00.000-05:00

It's Time To Learn How To Become A First Time Buyer In The Current Real Estate Market

The following article covers a topic that has generated much interest recently and moved to center stage--at least it seems that way. If you've been thinking about buying you first home and want to know more about it, here's your opportunity.

If you are considering buying your first home, you need to prepare yourself prior to jumping in.

If you are planning to get a mortgage with a co-borrower, make sure that whoever you are planning to buy with follows these same steps, as both your credit scores will be coming under scrutiny.

Remember, this is not the time to make changes, do not move bank accounts or change jobs as stability is attractive to lenders.

So what steps do you need to take?

CREDIT

The primary piece to the puzzle called getting a mortgage is your credit score. There are a number of things you can do to help boost your credit scores. Having a good credit score will give you a wider choice of mortgages and will enhance your chances of getting approved by a lender.

To build your credit, as soon as possible, you need to get your finances in order. Pay off any overdrafts, loans and pay down any balances on credit cards. Pay all your bills on time. And DO NOT miss a payment on anything. Even something as simple as your cell phone bill can negatively affect your credit rating.

A few helpful hints to boost your credit score:

Get a copy of your credit report and review it for errors and items that need attention
Keep all credit balances below 50% of the available credit limit
Transfer balances to keep below 50% use of available credit
Raise limits on existing accounts to keep below 50% of available credit
Eliminate, payoff ALL collection accounts
Do not start buying big ticket items such as cars, boats, etc.

ASSETS

If you do not already have a savings account, open one. You can then use this account to start building up savings for a down payment, closing costs, as well as the other expenses associated with buying a home, inspections, moving, new furniture, new appliances and more.

This will be a benefit to you in a couple of ways.

First of all, the bigger the deposit you have, the better your options will be when it comes to getting a mortgage. Someone with a 10% deposit will have more mortgage options available to them than someone with a 5% deposit so save as much as you can.
The second benefit of having a savings account is that it will look good on your loan application as it demonstrates responsible money management.
Lastly, some banks require what they call reserves, that is, money in reserve to make payments in the case of financial emergencies such as job loss, or unexpected repairs. Having these reserves will make you more attractive to potential lenders.

The Current Real Estate Market

Getting into the market in the current environment offers both opportunities and challenges. Suffice it say that getting into a house in the current credit market is harder now than ever. With house prices having risen far quicker than inflation over the past few years, many first time buyers simply do not earn enough money to be able to buy a home.

There are some other options that might be available to you.

Friends & Family

First things first, you could ask your parents. Could they lend you money or borrow from the equity in their home to help you raise a down payment. This could be advanced to you in the form of a secured loan. Or would they be willing to act as a co-signer? A co-signer is where they agree to be liable for the mortgage should something go wrong.

Or, you could consider buying a place together with friends. If you are single, having two or three people buy a property means you can borrow a lot more money.

With these options, make certain that you draw up a proper legal agreement between yourselves as even the closest of relationships can go wrong.

Do Not Overextend Yourself Financially

No matter how desperate you are to own your own place, make sure that you do not over extend yourself with a mortgage. Affordability should always be a key consideration. After all, there is no sense in having your own home if you are too short of money to be able to spruce it up or furnish it!

So now you know a little bit about becoming a first time homebuyer. Even if you don't know everything, you've done something worthwhile: you've expanded your knowledge.

Dan Harris is a successful entrepreneur and freelance business writer.

Dan operates Harris Capital Management and Mobil Settlement, LLC in New York and can provide detailed information on New York Mortgages, New York Title Insurance Issues, New York City Mortgage Companies, New York Mortgage Rates and more.

Dan is also available for seminars and speaking engagements.

He can be reached at CashDan.com or MobilSettlement.com

Mortgage Basics For The First Time Home Buyer

2008-01-24T18:18:00.000-05:00

Understanding the concept

Mortgages are what a lot of people use to buy their home.
Mortgages have been instrumental in helping many people by making that unaffordable house affordable. Some real estate investors make use of Mortgages for buying properties.

However, mortgages are not free money and anyone who buys real estate or plans to buy real estate using a mortgage must understand the concept of mortgages very clearly.

Down Payments and Mortgage Money

A mortgage is the money that you borrow from a financial institution or a mortgage lender for the purpose of buying a property. The mortgage generally covers a part of your purchase price and the remaining portion has to be paid by you upfront in the form of a down payment.

The percentage of total purchase price that you have to pay as down payment is dependent on a number of factors and you may be able to reduce it to as low as 5%.
Many lenders will allow this type of loan based on various factors such as; credit score, documented income, property location and other factors. FHA and VA loans can reduce the down payment requirement on Mortgages even further. Many lenders have special first time buyers programs that offer 3% down payment options.

Whatever you borrow from the mortgage lender needs to be paid back to the mortgage lender over a period of time of course. You will also be paying an appropriate interest on that mortgage. Mortgages and their terms are based on risk to the lender, the higher the risk, the higher the rate. The term and type of mortgage combined with the prevailing market rates will determine the interest rate you pay for your mortgage Generally, you are required to pay back the mortgage in the form of monthly installments which are composed of both interest and principal portions of your mortgage.

Types of Mortgages

There are various types of mortgages such as; fixed interest rate loans and adjustable interest rate loans. There are also mortgages with differing terms, for example you could take out a mortgage for 10 years, 15 years, 20 years, 30 years, 40 years and believe it or not, there are even 50 year mortgages available.

So depending on what type of mortgage you have gone for, your monthly payments might either remain constant (fixed rate) for the full term of the loan or keep getting adjusted periodically (adjustable rate) on the basis of a pre-determined financial index.

Closing Costs & Other Fees

Besides interest rates, there are some other costs that are also associated with mortgages such as closing costs, inspection costs, attorney fees, appraisals, title insurance etc.
If the property needs some repairs, there will be costs associated with that too. Some states have mortgage taxes and transfer taxes, and it varies by state on who is responsible for paying these taxes.

Mortgage Advice

So, now you can see the need to understand the concept of mortgages and the related costs clearly before you actually go forward. Understanding these concepts is really not that difficult if you enlist the help of a good mortgage adviser.

Mortgage advisers come in many shapes and sizes. You can find them every where, a local mortgage broker, at your local bank or credit union, on the internet, in the yellow pages, television advertisements the list is only limited by your imagination. Suffice it to say there is no shortage of places to find mortgage advice some good and some bad.
There is a saying in the mortgage business, if you shop for a mortgage on the phone, you will do business with the best liar, do not let this happen to you. Unfortunately there is no scarcity of mortgage people who will try to get your business lying.

Make sure you find someone you trust, after all this is one of the single largest investments you will ever make in your life. I tend to advise people to choose an adviser who you can visit and look in the eye.

I strongly recommend that you do business with someone who will tell you the absolute truth about what mortgage products are available for your situation, someone who will tell you what you NEED to hear NOT what you WANT to hear, someone who is not afraid to tell you, if you have poor credit, the REAL interest rate available for you etc.
………………………………………………………………………
AUTHOR BIO

Dan Harris operates Harris Capital Management and Mobil Settlement, LLC in New York and can provide detailed information on New York Mortgages, New York Title Insurance Issues, New York City Mortgage Companies, New York Mortgage Rates and more.

Dan is also available for seminars and speaking engagements.

He can be reached at CashDan.com or at MobilSettlement.com

Mortgage Brokers Facing Extinction

2007-11-07T04:15:00.000-05:00

Mortgage brokers may be facing extinction.

The U.S. House of Representatives Financial Services Committee has approved a bill that will fundamentally change the way mortgage brokers are paid. This bill could cause borrowers who can't afford to pay higher brokers upfront to be squeezed out of the market.

The YSP has enabled many borrowers to opt for a little higher interest rate in order to lower their out of pocket closing costs.

While it is important that consumers should not be steered into a particular loan, the bill leaves unclear whether consumers can finance their origination fees and other costs inside the interest rate.

What is at issue here is whether or not brokers can be paid YSP. YSP is the money paid to brokers by the bank. The YSP brokers receive is fully disclosed on the HUD1 form at closing.

If the mortgage is originated by a mortgage banker, or a bank then the borrower is NEVER made aware of the YSP on their loan. Speculation in the mortgage industry attributes this lack of disclosure to the powerful banking lobby.

Organizations across the mortgage industry are fighting vigorously to remove this feature of the new bill from the finished product.

Buyer beware, as is often the case, when politicians try to FIX things they often make a mess.