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.

Bank of New York Named TARP Custodian

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

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.

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

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

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

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.
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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