In the past two weeks, I have had no less than five desperate homeowners, with negative equity, mortgage lates, and resetting ARMs call me to help them refinance their mortgage to save them from foreclosure.
In all five cases, a refinance was not possible. I still made appointments for each of the borrowers to come to my office and bring their mortgage coupon.
In each case, I called their mortgage company, got the note modification department on the phone and arranged for a note modification. I did not get one refinance out of this. I did this for free.
I cannot be any busier in my mortgage business here in Las Vegas. As more and more lenders leave our business and head back to the casino jobs they came from, I pick up more business. I am very fortunate.
However, I will continue to do this service for free when asked. I believe we owe this to the people who are in despair.
I went over all of their situations. Then I called the bank and asked for the note modification department. I did all of the talking to the bank. The clients were there to answer questions and give permission for me to represent them in this call.
In two more cases, I explained the note modification process to out-of-state borrowers who found me here on Active Rain and emailed me for advice. Another two free hours.
For those of you you don't know what note modification is, it is very simple. The mortgage lenders today are trying to avoid you going into foreclosure. They have hired hundreds of additional people whose job is simply to try and keep distressed borrowers in their homes.
I wrote a blog about this as a potential solution in early August at My Solution to the Lending Mess---An Open Letter to The Nation's Top Banks.
Let's say you have a 2 year adjustable rate mortgage that just adjusted to 8.500% and you simply can't pay it. Or your rate will soon jump and you know that will be a problem. You have the ability to call your mortgage company, ask for the note modification department and they will gladly assist you. They are there right now waiting for your call.
These people have the authority to tear up your current mortgage note and put you in a new, lower 30 year fixed rate with no fees at all. No appraisal, no credit report, no nothing.
It's as simple as a phone call and a few easy steps.
Most of the banks I dealt with these past two weeks asked for the same things.
They wanted a hardship letter from the client detailing why he can't live up to the terms of the previous Note.
Upon receipt of this they send you a form that asks you for some proof of your income and your recurring debts. This is not a new loan so they are simply seeing if they are wasting their time. They will not be as tough on your debt to income ratio so don't worry about that.
If you lied on a stated income loan to get your house, be truthful now. Its your only hope. They simply want to make sure you can live up to the terms of the new lower Note.
They all said they don't care what the credit looked like today. If they did pull it again, it would only be to see if you were lying about your debt obligations.
They all stressed to the client to be very truthful. They are there to help but they can't help if they catch you in more lies and cover-ups.
In each of the cases, they told the client to allow for up to six months for their new Note to be approved.
However, in the meantime, based on the hardship letter, they would halt all adjustments, come up with a reasonable payment somewhere between 6.500% and their current adjusted rate to allow the borrower to breath while the new plan was crafted.
They told the borrowers, if approved for modification, they could expect a new note, a 30 year fixed, between 6.500% and 7.125%.
Now, I can't tell you if all seven I dealt with these past few weeks will be modified. Maybe none of them will be accepted.
What I can tell you is that each of every one of these people who walked into my office looked like the weight of the world was on their shoulder. When each left my office I could actually see a physical change in them. Stress affects your health and your appearance.
I could just see the stress that had been removed. They looked like different people walking out. All it took was having a little hope and someone who understands the process help them and care about them saving their home.
You should see how intently they listen to the conversation with the bank. They get it. They want to save their home but they are lost in the confusion and jargon of the mortgage process and have no idea how.
Each one of these people thanked me more fervently than my 14 year old daughter did when I bought her the cell phone she had been begging me for for over a year. And that was a tearful thank you.
I really hope that no one interprets this post as being self-serving. Have I been doing a good deed? Sure, I have. But I am writing this post to make a plea to all of the mortgage professionals in our business.
Tomorrow, and the next day, and the day after that, when the borrower in despair calls you to try and refinance their home to save it, after you run the numbers and see its a lost cause, don't stop there.
Don't brush these people off to face foreclosure alone just because you think its a waste of your valuable time, which is only for making money.
Get involved and help. You helped create this mess. We all did. Give something back and do something good. Get the client on the phone with their bank, get their permission to speak for them, and get the note modifiers on the phone. Go through the situation with them and assist the process.
Don't go through the collections department. That is a waste of your time. Go straight to the note modification people.
I can assure you, at the end of the call, you may not have made any money, but you will have earned the respect of a fellow human being, you will be a hero in their eyes and, I am quite certain, someday you will be rewarded for it.
By the way, if you need a good sample hardship letter for your Note Modification request, see Moe Bedard's blog at Example Hardship Letter to Stop Foreclosure.