Calling on All Mortgage Lenders on Active Rain! Be a Hero - Give FREE Time To A Distressed Borrower and Help Them Save Their Home thru Note Modification

By
Mortgage and Lending with Branch Manager NMLS 557050

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.

 

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Rainmaker
110,874
Lewis Poretz
Bank of England Mortgage - Annapolis, MD
Mortgage Loan Officer - Lending in 50 States

Aaron -  you have a long future in this business...   was what you did self - serving?  damn straight. and you know what? I will do the same exact thing you did...

 

thanks you so much for the post.   you guys remember that old saying   what goes around comes around..........

thanks again for the post 

Sep 25, 2007 10:01 AM #22
Rainer
37,382
Aaron Gordon
Branch Manager - Las Vegas, NV
Home Loan Consultant - Las Vegas, NV

Noah--- I agree that everyone in life must take responsibility for their actions and the consequence thereof.  And that includes the borrowers.   But it also includes the lenders, the agents, Wall Steet, the banks and everyone else who helped push the limits of homeownership too far...just like the .com debacle of 2000.

Lewis--- Good for you!!  I agree 100%!

Sep 25, 2007 04:11 PM #23
Anonymous
Diana

Aaron,

I wish I could find someone like you in my neck of the woods. 

We are looking at a real chance of losing our home and I just want to cry. The stress it has caused me is so overwhelming. My husband and I can't even sleep at night because our minds are crowded with worry and "what if's".

7 years ago we were referred to a wonderful man who was a mortgage broker and he helped us get into our first home. Not a big fancy place and it's a not really in a popular big city but we love it.  5 months after moving in, I lost my job. It's been a constant struggle ever since.  We've been on the verge of foreclosure twice and somehow pulled ourselves out of it.  Last October we went back to see that wonderful broker because we were in foreclosure. He talked us into a loan that was an interest only fixed loan for the first two years - but would adjust in October 2008. He was able to get us a few thousand in cash to put in the bank to rely on for the first year of higher payments (we went from paying $1300 a month - including insurance and taxes, to paying $2200 with the new loan not including anything).  His idea was that we would build up our credit for 12 months, pay the house on time for 12 months and then come back to see him this October 07 to get us into a better loan - a whole year before it would ever adjust, no worries. 

We do well for the first 7-8 months but then we have car problems, higher bills and a multitude of other little things that add up and next thing you know, we're behind but making our payments within the next 30 days - determined not to get to 60 days but knowing we are walking on the edge and about to fall off if something happens.

So I call the broker to see if we're going to have problems in October with us paying 30 days late and he assures me we'll be fine, just stay under the 60 day mark and he'll see what he can do .. and call me back.  I get no call for a week and then he tells me what we all already know - he can't get us out of this loan and he suggests we sell while we still have some equity in the house and rent instead.  Problem #1 - I do not want to move! I know it might seem silly but the reality is, my son is at an age where he needs stability including a home in this neighborhood with his friends. Not to mention we have pets and we've been working so hard to try and keep this house - I can't just let it go. Add to this the fact that both the homes on either side of me have been up for sale for at least a year - no one is buying! Even if we put it on the market, I know it wouldn't sell - nothing is selling here right now.

We trusted this man. I feel so betrayed and left up the creek without a paddle.  I also found out in the process of talking to various people at Countrywide (the people who have our loan right now) that there is a $10,000 prepay that neither my husband or myself remember being told about - but I'm not counting it out that we were told and just didn't fully understand.

So now I'm playing a game of phone tag with Countrywide to try and get a loan modification because we owe for August and now September .. with October here in a week. We do not have the money.

If we could just get 2 payments worth of funds under our belt - we could put one month in the bank and pay the first month with the second one. What my husband brings in each month is enough for a NORMAL house payment. I'm not expecting to get the $1300 a month again but we can not afford the $2200 either and especially when we have to pay taxes and insurance (we are behind on those as well!).

I'm out pounding the pavement looking for full time work and have signed up with two employment agencies who are impressed and seem to believe they can get me work within the next month. If we could get something done about the loan as well as me finding a job - we would be set.

I'm sorry I'm rambling. I'm stressed, confused, scared and sad.  I honestly do not know what we will do if we lose our home. All of the technical talk is overwhelming. I do not understand the people at the banks and I do not know what they need to hear. 

I'm suppose to fax my husband's paycheck stubs and a hardship letter tomorrow - I hope I don't screw up!

Thanks for doing what you do - thanks for letting me vent as well.

Take Care

Sep 25, 2007 09:16 PM #24
Rainer
37,382
Aaron Gordon
Branch Manager - Las Vegas, NV
Home Loan Consultant - Las Vegas, NV

Diane--- Thank you so much for your comment.  You have really put this blog into real perspective. 

First of all, I want you to know that you and your husband can start sleeping at night.  It is highly unlikely that you going to lose your home.  Countrywide has hired 2500 people to help people, like you, stay in their homes.   They call that department, "Countrywide Hope."

I saw a press release yesterday where they proudly say they have saved 35,000 families from foreclosure so far.   You will likely be 35,001.   

Don't stress, be confused, scared or sad.  You are doing the right thing. 

It sounds like you are talking to the right people at "Countrywide Hope."   Their job is to help you save your home, not take your home. 

If they have asked you for the hardship letter and your husband's paycheck stubs, you are likely talking to the right people.   Don't worry.  You cannot screw it up.   If your comment to me is anywhere close to the hardship letter you wrote, that part is done correctly.

The paycheck stubs are there simply so they can determine if you will be successful in the note modification.  They are not pre-qualifying you for a new loan.   They are going to look at your entire financial picture, as well as your credit in all likelihood, and give you complete financial advice on how to make this work.

Don't worry about the prepayment penalty or anything else about your current loan, including the past due payments.  

What you can expect is a new 30 year loan, not interest only, between 6.500-7.250% and some serious advice on how to manage the rest of your current, non-mortgage debt.   They will probably add the past due payments to the back-end of your loan or roll partial payments into your new one. 

This process is not going to be easy but it will very likely get done.  Your payment will no longer be $2200, but it won't be $1300 either.

If you stumble at all, and you need someone to get in the middle of this to help you understand it all, please do not hesitate to call me at 702-283-2333.  Anytime.   I will gladly call with you, speak with rep at Countrywide, and make sure you better understand this process. 

There is nothing more important in this life than your personal health and happiness.  Stress often comes from things we can't control.  I want you and your husband to feel like you are in control of this because today you are. 

I believe this challenge will be overcome successfully and I am here for you if you need me.

Thanks, Diana!!  Best of luck to you and your family.  Please update me of your progess.

Aaron

Sep 26, 2007 02:51 AM #25
Rainmaker
549,384
Eric Kodner
Madeline Island Realty - La Pointe, WI
CRS, Madeline Island Realty, LaPointe, WI 54850 -
Aaron, this is very timely!  I have someone whom I plan to send your way..thanks for posting this!
Sep 26, 2007 02:59 AM #26
Rainer
37,382
Aaron Gordon
Branch Manager - Las Vegas, NV
Home Loan Consultant - Las Vegas, NV
Eric-- Thanks!  Send them over.
Sep 26, 2007 03:12 AM #27
Rainer
111,539
Carole Cohen
Howard Hanna Cleveland City Office - Cleveland, OH
Realtor, ePRO
This is fabulous Aaron, I don't know you but I could hug you anyway. John Novak just pointed this out to me on one of my posts. It's linked. I'm going to talk to a few lenders I know tomorrow and get them talking about this....if they aren't already. 
Sep 26, 2007 01:31 PM #28
Rainer
37,382
Aaron Gordon
Branch Manager - Las Vegas, NV
Home Loan Consultant - Las Vegas, NV
Carole--- Everyone can always use a hug!! :)  And everyone needs a good kick in the pants once in a while.  Spread the word!!  We can make a difference.
Sep 26, 2007 01:36 PM #29
Rainer
111,539
Carole Cohen
Howard Hanna Cleveland City Office - Cleveland, OH
Realtor, ePRO
Working on that kick in the pants theory, I just posted a blog on my blogger blog linking to you. This is the kind of grass roots effort I can get behind! 
Sep 26, 2007 01:43 PM #30
Rainer
37,382
Aaron Gordon
Branch Manager - Las Vegas, NV
Home Loan Consultant - Las Vegas, NV
Carole--- Great idea!! Let's hope it catches on.
Sep 26, 2007 02:01 PM #31
Rainmaker
143,626
Kaye Thomas
Real Estate West - Manhattan Beach, CA
e-PRO, Manhattan Beach CA
Aaron-  Don't count on Countrywide to help if you have refinanced.. I know a couple who lost their home because CW would not waive a pre-payment penalty on the second..it was $12K.. CW had both notes.. they have foreclosed and are going after the owner for the difference because as a refi it is no longer a non-recourse loan.. Rumor has it that this is CW policy on all  refi loans where they hold the first and second mortgage.. they will foreclose on the first.. wipe out the second.. then go after the borrower for the balance due..
Sep 27, 2007 04:23 AM #32
Rainer
168,035
Matthew J Blum - (retired from the business)
Palm Beach Gardens, FL
Aaron, Great post. Sorry I did not see it sooner. I know I worked with a couple of clients recently who where exactly in the same situation that you wrote of.  In both cases the lenders where more than happy to work with them directly. Once we found the right person to speak to.
Sep 27, 2007 04:41 AM #33
Rainer
37,382
Aaron Gordon
Branch Manager - Las Vegas, NV
Home Loan Consultant - Las Vegas, NV

Kaye--- I don't know the circumstances but I am not sure that's just a Countrywide issue.  I think that all situations are looked at on a case by case basis.  Note modification will not save everyone. In fact, I followed this post up with Note Modification is a Compromise - It's Not For Everyone and Won't Save Every Home.

Matthew--- Thanks!!  Its the right thing to do and it can be a very successful option today compared to all others presented.  Good for you for helping!!   I think its important today.

Sep 28, 2007 03:02 AM #34
Rainer
3,471
Kelli Smith
Plaza Lane Mortgage & Investment Co. - Derby, KS
Thank you for this information. This has been very helpful. I have seen many people with a ARM loan looking to refinance or find someway out of it.
Jan 26, 2008 07:31 AM #35
Rainer
1,967
NANCY LILLY-HAMILTON
CTX MORTGAGE - East Fishkill, NY
Hey Aaron, I think it's great you stepped up to the plate and offered to help. Yes, we make out living from writing loans, but I never want to see anyone lose their home. Just this week I too had to turn down 4 potential clients. All of them had valuation problems that would not allow a re-finance. Thanks for the post and keep up the good work!
Feb 28, 2008 11:38 PM #36
Anonymous
Dale Ferguson

Thank you for this information. I'm ina 2/28 andI'm up side down 85-k This has been very helpful. I my co-worker told me to look up www.NACA.com. I'm waiting to hear back from them. I have never been late on my 1 or 2 TD, and I'm was680 mid score. when I called my lender the answer I got was a phone call about a short sell.... That's nothing what I asked for.  

Thank you for the info. I'll be calling you soon

Dale Ferguson

 

Jun 08, 2008 10:26 AM #37
Rainer
6,627
Juan Boldizsar
Belleville, IL

I applaud your efforts in helping folks out.  The world would be a much better place if more folks were as generous with their time as you are.  I'm sure that the "Good Karma Godess" is going to be very good to you!

A few weeks ago, I came across a blog post that might be very helpful to your readers.  It has some good pointers for writing hardship letters.  The author of the blog had some very productive things to say about how to write an effective hardship letter.  Check it out here.  Just so everyone knows, I don't know the author, don't work for the author and am in no way affiliated with her -- I just think she writes a darned good blog.

Best regards,

Jun 08, 2008 03:18 PM #38
Rainer
2,684
Jon McCurley
TCS - Redondo Beach, CA

That was a great post. I thought you had to be licensed to do this but I guess not. I have a lot of friends in the mortgage business and I will let them know about this.

Thanks a lot!

 

Jon McCurley

Jun 08, 2008 06:45 PM #39
Anonymous
liberty one lending

We would be more than happy to help.

 

Great post!

Jul 02, 2008 02:57 AM #40
Rainer
25
Steve Dumae
Inline Business - New York, NY

You have come up with a noble cause and it is having terrific success so far and i am sure it will reap rich dividends when the time moves on.

 

 

http://inlinebusiness.com/cgi-bin/d.cgi/custsol/se_ret_07.html

 

 

 

 

 

 

Jul 09, 2008 11:18 PM #41
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Aaron Gordon

Home Loan Consultant - Las Vegas, NV
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