HAMP, HAFA. LOAN MODIFICATION, SHORT SALE

REAL ESTATE CONSULTING SERVICES

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The fact is… up until now, no one could tell you with certainty whether you qualified for a loan modification under the government’s Home Affordable Modification Program, or HAMP.

The only way to find out has been to apply for your modification, make trial payments for months, and then hope against hope that you get approved. If after all those months you were told you didn’t qualify, you likely to found yourself losing your home, and often times with 30 days to move.

HAMP loan modifications require homeowners to enter into a “trial modification” phase prior to a permanent modification being granted. During the trial phase, homeowners make “trial payments,” but because trial payments don’t stop the foreclosure clock, if you’re declined for a permanent modification, the bank is free to sell the house at a trustee sale, which can occur within a matter of days.

The problem with the HAMP program is that, even though you qualify according to the published guidelines, you still have to pass the NPV test, and how you do that, is not available to the public.

Thousands of homeowners, believing that they are on their way to a loan modification that will allow them to avoid foreclosure, end up being told that they failed the NPV, and that the only difference between them and someone renting a house is that the person renting has more rights and is allowed more time to move.

Now the government says that homeowners won’t be allowed to enter trial modifications until their lenders or servicers have verified all supporting documentation. So, now a homeowner will be expected to spend all that time getting all of their documents together, submitting them to their bank… and then waiting for the bank to say yes or no? There has to be a better way.

"The REST Report… A Better Way to Pursue a Loan Modification"

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Home Loan Modifications, Short Sales and Automated Valuation Model

The REST Report allows homeowners to know with certainty whether they qualify for a HAMP loan modification, and what the terms of that modification would be, BEFORE they apply, so no one has to go trough the costly, stressful and/or time consuming process for nothing.

That’s why we say that the REST Report is the best thing to happen to loan modifications since, well… it’s just simply the best thing to ever happen to loan modifications.

Homeowners can use the REST Report by sending it to their lenders or servicers, along with their supporting documentation when they apply for a loan modification. It’s an 11-page report that uses your specific information and the most up-to-date NPV decision analytics… the same analytics that are used by the major banks and servicers to determine HAMP eligibility.

Others may claim that they can qualify you for HAMP, but no other system can duplicate what the REST Report shows, because no other system available to homeowners runs the most up-to-date NPV analytics, as required by the U.S. Treasury for the HAMP loan modification program.

With the REST Report you’ll have the knowledge and information you need to make more informed decisions.

A. First our trained specialists enter information about you and your mortgage into the REST loan disposition software platform. We make it easy by emailing you a checklist of what you need to have handy when you call, and your report will be emailed to you within a few hours.

B. The REST Report shows whether you qualify for HAMP, and what the terms of that loan modification under HAMP will look like. But that’s not all. Should you not qualify for HAMP, the REST Report will show you why you don’t qualify.

C. The report also qualifies homeowners for HAFA Short Sales, and shows the NPV, or Net Present Value, of numerous other foreclosure alternatives, such as a Flex Mod, an interest only alternative, along with other options.

D. With the REST Report, if you do qualify for HAMP, now you’ll know for sure. But just because you don’t qualify for a modification under the government’s HAMP program, does not necessarily mean that you can’t get your loan modified. Many lenders and servicers have in-house modification programs for which you may qualify.

E. Once you receive your report, one of our trained specialists will review what the report shows, so you’ll know what it says and how to use it. Once armed with the report and the knowledge of your options that comes along with it, you can start making smarter decisions right away. Why would anyone want to go through the modification process without it?

The REST Report is generated using a version of the same software platform that major banks and servicers use to determine HAMP eligibility, so as changes occur in HAMP’s decision analytics and program guidelines the system is updated concurrently.

Your REST Report is good for 90 days from the date it is generated, but that should be enough time to receive an answer from your lender when submitting the REST Report.

Homeowners send a copy of their REST Report to their lenders or servicers, along with the required supporting documentation, when they apply for a loan modification.

If the REST Report shows that you qualify for a HAMP loan modification, you can be assured that you will qualify, assuming your lender follows the rules set forth in the HAMP guidelines for servicers.

4. What do I do if my lender denies my HAMP modification, though my report shows I’m qualified?

The first thing you should do if your lender refuses to grant your loan modification when your report shows that you are qualified for HAMP is contact your lender and make sure the numbers they’re using in their analysis match up with the numbers you submitted and are shown in your report.

Mistakes happen often, and if there’s a discrepancy that can be corrected, your lender will re-run the numbers and you should qualify.

If the numbers the lender is using do match up with the numbers shown in your REST Report, ask the lender to explain to you where their analysis differs from the one shown in your report. If the person you’re speaking to won’t tell you why you’ve failed to qualify, speak with their supervisor. Ask that person to explain why the bank is saying you’re not qualified, and tell him or her that you plan to escalate the matter as far up the chain as necessary, including reporting the lender or servicer to Freddie Mac if necessary.

It’s sad and shocking to some, but there have been cases where banks have simply refused to adhere to the rules set forth by the HAMP guidelines for servicers, which were published by the U.S. Treasury.

(JPMorgan Chase, for example, was recently sanctioned by the bankruptcy court for “producing false and misleading documents,” and Bank of America, on at least one occasion last year, foreclosed on a home on which they didn’t even hold a mortgage.)

If your bank is refusing to grant your loan modification even though your REST Report shows you as qualified, and they’re refusing to consider you for any in-house modification program, you may want to retain a licensed and qualified attorney to assist you in the negotiations with your bank.

Make sure the attorney checks with your bank to see if a sale date has been set, and if so, make sure he or she notifies the bank that there is a dispute and that you are therefore still in the process of applying for a HAMP loan modification. Banks are not permitted to foreclose while a homeowner is being considered for HAMP.

Although unlikely, it is possible that in the most extreme cases, it may be necessary to turn to the courts to settle such a dispute, and the REST Report can be invaluable evidence in such a proceeding. And just imagine what such a fight would be like without the REST Report, where you’d have nothing to show you’re HAMP qualified.

5. What if my REST Report shows I don’t qualify for HAMP?

To begin with, if you are not qualified for a HAMP loan modification, the REST Report tells you why you’re not qualified, and proposes some alternative terms helpful when applying for an in-house modification program. In-house loan modification programs are offered by many, but not all HAMP participating lenders and servicers.

Your REST Report can be invaluable when applying for a lender’s in-house program because your report will also show the Net Present Value (“NPV”) to your lender, of several alternative loan workout options. You may choose to hire a lawyer or other third party to help you obtain such an in-house loan modification, assuming that such a program is offered by your lender or servicer.

But remember… If your report shows that you are not qualified for HAMP, you avoid entering in to a long and costly trial period, and can apply directly for an in-house modification, assuming your lender or servicer offers such a program… or depending on what the report shows, perhaps make a different decision.

6. Does the REST Report guarantee that I will be approved for a HAMP loan modification by my lender or servicer?

No. No one can guarantee that a bank will agree to modify a loan, or do anything else for that matter.

But… submitting a REST Report showing you that you qualify for HAMP, along with your supporting documents, when applying for a loan modification improves your chances of being approved under HAMP, because the REST platform is a version of the same software platform used my major banks and servicers to determine HAMP eligibility.

And, when you have a REST Report, you have what you need to push back should your bank still refuse to modify your loan. Without it, it’s worth pointing out, you are essentially unarmed.

7. I’ve already applied for a HAMP loan modification and am still waiting to hear whether I’ve been approved for a permanent modification. Should I still consider ordering the REST Report? How will it help me?

Homeowners already in a trial modification, but still waiting to hear if they have in fact been approved for a permanent modification under HAMP, benefit from running their REST Report because with their report, they’ll know where they stand before hearing that they have been declined for some undisclosed reason.

Once a bank denies you for a loan modification they can move to sell your house quickly, and sometimes that means a matter of days. By knowing that you don’t qualify earlier in the process allows you to either talk with your bank about alternatives to the HAMP program for which you may be eligible.

Should no modification program be available to you for whatever reason, the REST platform also quialifies you for a HAFA short sale, the government’s latest short sale incentive program for lenders and servicers.

8. Who developed the REST software platform?

The REST platform is a version of the same software platform used by major banks and servicers. It was developed specifically for lenders and servicers participating in HAMP, it uses the NPV decision analytics, as required by the U.S. Treasury.

REST stands for Real Estate Services & Technology, a venture started by the same people that originally built, and still supply and update similar systems to banks and large financial institutions.

9. What is the “NPV Test,” as related to HAMP loan modifications? Does the REST platform use the same NPV required by the U.S. Treasury Department?

As stated in the HAMP Guidelines:

A standard NPV Test will be required on each loan that is in Imminent Default or is at least 60 days delinquent under the MBA delinquency calculation. This NPV Test will compare the net present value (“NPV”) of cash flows expected from a modification to the net present value of cash flows expected in the absence of modification. If the NPV of the modification scenario is greater, the NPV result is deemed positive.

If the NPV Test generates a positive result when applying the Standard Waterfall , the servicer is required to offer a Home Affordable Modification to the borrower.

If the NPV Test generates a negative result, modification is optional, unless prohibited under contract.

The U.S. Treasury Department’s most recent HAMP NPV Model (V 3.1) is currently only available to participating HAMP servicers. For this reason the model used by the REST Report, has certain variations. Although the REST Report is a proprietary model, based on the input provided by the borrower, the loan modification terms proposed in the REST Report, will fall within the allowable tolerances of the HAMP eligibility guidelines.

10. How do I know my bank will pay attention to the REST Report, as far as my being qualified for HAMP is concerned?

Actually, it doesn’t matter. You could submit a personal letter from Treasury Secretary Tim Geithner, and your bank would still follow the same process it always does with application for a loan modification.

When you apply for a loan modification without the REST Report, assuming you meet the basic eligibility requirements and pass the Standard Waterfall test, lenders and servicers enter the information you’ve provided into a spreadsheet or a software platform in order to run the NPV test, which is what verifies that what is being proposed is, in fact, HAMP compliant.

If the NPV test is positive, the lender is required to offer the homeowner a loan modification.

When you submit your REST Report, your lender will do the same thing they always do, and when the NPV test is run, the result your banks receives will match the result shown in your report… almost to the penny, which means you’ll be approved for the modification, assuming your bank is following the rules.

11. How do I use the REST Report in a mediation proceeding with my lender?

Some states now offer state assisted mediation programs to homeowners who are in default or at risk of foreclosure. The job of the state appointed mediators is to make sure that if foreclosure can be avoided, it is avoided.

The problem is that without the homeowner bringing to the negotiating table what is contained in the REST Report, mediators have little to, well… mediate. In simple terms, if all the homeowner has on his to help make his or her case are paycheck stubs and a tax return, the mediator is really dependant on the lender’s representative to propose alternative strategies to foreclosure.

With the REST Report, because it shows the Net Present Value to your lender of various alternatives, gives the mediator a lot more to discuss or the basis to challenge what the lender is or isn’t offering.

12. Are the modified payment terms of the HAMP modification shown in my report accurate?

Yes they are. The modified payment terms that are shown in your REST Report when you qualify for HAMP, are very close to the terms that will be offered by your permanent HAMP modification, sometimes they are literally pennies away.

13. What are the eligibility requirements for the HAMP program?

For a comprehensive presentation and discussion oif the HAMP eligibility requirements, please click on the link at the top of this ad and send me a message there or email me directly at realestateconsulting9@gmail.com .

14. Does everyone applying for a HAMP loan modification have to enter a “trial modification phase,” before being approved for a permanent modification?

Yes. There’s simply no way around it, if you apply for a HAMP loan modification, you’ll enter the trial modification phase for at least three months before finding out for sure whether you qualify for HAMP’s permanent loan modification.

Some homeowners report being in such trail periods for close to a year before they were turned down for failing to pass the NPV test.

Of course, there’s nothing wrong with being placed into a trial modification if you know for sure that you qualify… homeowner reports that it’s the uncertainty that drives them to distraction. With the REST Report, you’ll know what’s ahead so you can make more informed decisions in the best interests of you and your family.

15. Do I have to hire a lawyer or other third party to help me get my loan modified?

No, you most definitely do not have to hire anyone to help you get your loan modified, and in fact we often recommend that homeowners who purchase their REST Report, use the educational tools and Knowledge that we will supply for you to apply for your loan modification on your own and only consider bringing in an attorney third party in the event of a problem arising.

Of course, that being said… it’s really up to you. Not everyone is equally equipped to negotiate with a major financial institution over their mortgage when they are at risk of losing a home. For those individuals that wish to hire an attorney, or a third party we will refer you to PCAG.

PCAG has successfully negotiated many loan modifications, and other foreclosure alternatives. PCAG has been working with the loss mitgation departments of ALL the various financial institutions for over 15 years. They were doing loan modifications for homeowners and commercial property owners before the term "Loan Modification" was a household term at the dinner table.

16. Is it true that the government is now requiring banks to grant principal reductions as part of the HAMP loan modification program?

The government recently announced that lenders and servicers that participate in HAMP will now be “encouraged” to consider principal reductions, but it is too early to know how effective that encouragement will be. Principal reductions, while not unheard of, remain rare, with the government reporting that they make up approximately 10% of all HAMP modifications. That is something I take wit more than one grain of salt.

17. I recently heard that HAMP will now be offering some new assistance for unemployed borrowers. Is that true?

Yes, the government has recently announced that unemployed applicants to the HAMP loan modification program will be offered some additional help in the way of forbearances of payments for 90 day periods, in the hopes that they will find work in the time provided, but again, it is too early to know how this change to HAMP guidelines will manifest itself.

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18. What is included in my monthly gross income?

A borrower’s Monthly Gross Income (MGI) is the amount before any payroll deductions and includes wages and salaries, overtime pay, commissions, fees, tips, bonuses, housing allowances, other compensation for personal services, Social Security payments, including Social Security received by adults on behalf of minors or by minors intended for their own support, annuities, insurance policies, retirement funds, pensions, disability or death benefits, unemployment benefits, rental income and any other income.

19. Will I need to verify my income before being granted a trial or permanent loan modification?

Yes. If you qualify for HAMP, the lender/servicer will verify your income in a number of ways.

The borrower’s income will be verified by requiring a signed Form 4506-T (Request for Transcript of Tax Return) and obtaining the most recent tax return on file for each borrower on the note. For wage earners, the two most recent pay stubs for each wage earner on the note will also be required. For self-employed borrowers or for non-wage income borrowers, the borrower’s income will be verified by obtaining other third-party documents that provide reasonably reliable evidence of income. Borrowers must also represent and warrant that they do not have sufficient liquid assets to make their monthly mortgage payments.

20. What if I don’t want to accept the modified payment terms offered to me by the HAMP loan modification?

There is no question that, with real estate values still declining, depending on the terms of the existing mortgage, and the homeowner’s income, some borrowers have declined to accept the terms of a loan modification, preferring instead to move towards a short sale or even a deed-in-lieu of foreclosure.

And that’s one of the key advantages to running the REST Report… you not only know whether you qualify, but you also know the modified payment terms of that modification. You may not always like the answer, but we think you’ll agree that knowing is always better than the alternative.

21. My credit score has gone down significantly in the last couple of years. Does that mean I won’t get approved for a loan modification under HAMP?

No. Although the NPV formula does require your credit score, a low score by itself does not make you ineligible for HAMP.

22. What if I’ve filed bankruptcy or am in the process of filing bankruptcy? How does bankruptcy affect my obtaining for a HAMP loan modification?

Bankruptcy does not make you ineligible for a loan modification, however, different lenders have different policies as to when you should apply relative to a bankruptcy filing.

23. My home is seriously “underwater”. Can I still qualify for a HAMP loan modification?

Yes. Owing more than your home’s current appraised value, referred to as being “underwater,” does not disqualify you for a HAMP loan modification.

LOAN MODIFICATION

The term “loan modification” means a modification of the note such that the monthly payment is modified. A lower monthly payment can result from lowering or deferring the principal, lowering the interest rate, extending the term of the loan, or forgiving late fees or penalties. In most cases the interest rate and corresponding payment will go down for a period of five to 40 years.

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PHOENIX - HOME LOAN MODIFICATIONS AND COMMERCIAL LOAN MODIFICATIONS - PHOENIX

REC is an attorney Based Home Loan and Business / Commercial Loan Modification Company.
We Help our clients: lower their payments, Extend the term of the note, Reduce the amount of the note they owe on.

PHOENIX - HOME LOAN MODIFICATIONS AND COMMERCIAL LOAN MODIFICATIONS - PHOENIX

REC is an attorney Based Home Loan and Business / Commercial Loan Modification Company.
We Help our clients: lower their payments, Extend the term of the note, Reduce the amount of the note they owe on.

AS SEEN ON MANDELMAN MATTERS WITH MARTIN ANDELMAN