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Mortgage Loan Modifications: Is This Web 2.0 for the Mortgage Loan Originator?

I just got off of a webinar training on Mortgage Coach about Mortgage Loan Modifications. What was so fascinating about the training beyond the sales pitch was the idea of another way for mortgage originators to help distressed homeowners in this time to need.

Arizona is one of states that has been hit the hardest with the downturn in the real estate market. We have some neighborhoods which are rampant with short sales and foreclosures. I have been getting at least 4-5 calls a month from distressed homeowners looking for solid solutions to stay in their homes but felt that the current solutions were just not very viable. Hope for Homeowners the jury is still out on that program.

Now I feel there is hope to make the Mortgage Loan Modification a win,win,win for all sides involved. Mortgage Coach has devised a system to help homeowners stay in their property through a modification to the mortgage note. Mortgage lenders in conjunction with partnered attorneys help the homeowners with the modification process.

Is our roles as mortgage advisors going to change to mortgage modifiers?

I think it will become part of our business mix for sure. These homeowners need help and are seeking our professional advice to solve a problem. Until all the sub prime, alt a, option arms and other niche arm products adjust, there will be a need for this service.

Are we the right people to administer this service?

I am not sure, but I would sure like to help these folks keep their house.

Posted by Gary Miljour - Mortgage Lending for Tempe Arizona on 10/17/2008 05:19 PM

Comments (18)

Loan Modification in the Mortgage / Finance Channel

mortgage loan modifications, loan orignators helping homeowners, mortgage coach, arizona home loans

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18 Comments on Mortgage Loan Modifications: Is This Web 2.0 for the Mortgage Loan Originator?

OCT

2008

Gary, I think it is a great idea, because it puts accountability back to the industry, creates credibility and puts the LO in a position of sdviser rather than just a salesperson.

Good call!

OCT

2008

Bo,

Thanks for the vote of confidence. I too agree that it is a great idea. Heck our industry put these folks in these loans, the least we can do is help them modify them.

I was in that call - don't know if it was the same day - you think it's worth the money they were talking about to get in on this?

Matthew,

I do, I am looking at how the details will work in this office. How many calls are you getting a month from people who could benefit from a modification to their loans. I am getting 3-6 a month and I am not even promoting this service. Also, we are helping these folks for the long haul and that is to stay in their homes.

I feel the investment might not be any different than the initial investment I made when I entered this business. The payouts I think is worth the cost.

What is your reason for doubting?

Gary - I was in on the call too, but am really concerned about the cost to the client. How many people in foreclosure can come up with $3,500 + cash? I am not sold that this is the right way to go, but Heaven knows, we need something that works.

OCT

2008

Fred,

The product was not designed for people in foreclosure. The product is a preventative way to help a homeowner stay in their home. For example let's say that you have a client that 3 months from now will have a rate adjustment and their payment will go up $500.00 a month. You know the client will not be able to afford the new payment and might slip behind on the payments. You would approach this client about a modification.

I think it is a better solution then doing nothing and seeing these people lose their homes. Also if you really figured the cost of a homeowner moving out having to rent putting down 1st and last months rent somewhere else, they are pretty close to that $3,500.00 cost.

I agree it will not be for everyone but for some this would make sense. I am just trying to be open minded and go beyound the costs and think about what the client wants. Most of them want to stay in their homes if possible.

Also its hard to put a price tag on saving a client from financial and credit disaster which is what a foreclosure will do for most homeowners.

Again everyone please give me comments why you are opposed to this. I have still not made a final decision is this is a product I want to sell. It just sounds like a viable solution to help homeowners and is a good fit with my existing business.

Please everyone give me your two cents. Thanks Fred for yours.

OCT

2008

OCT

2008

Gary... I agree... this is not for those in foreclosure or about to go into.... I wasn't in this call and I would be very interested in it. I have one guy locally trying to get me to do some of these with him, but I don't trust the guy. And he is telling me that he has don't a lot of these... again, another reason why I don't trust him nor believe him. In regards to the H4H program, I think this is a much better break down if someone needs some reading on it.

FHA HOPE for Homeowners Program - aka the H4H Program

Gary... call me over the weekend... thanks

OCT

2008

Gary, I just want to pop back in. I am not against the program, I am just not sure it is a good one, like you. Even though I went through the presentation, I am not sold. I guess that is my problem. I really would like to see some sort of mandatory negotiation/mediation prior to foreclosure. It would also be nice if this were available for those that are current on their mortgages and not facing reset of interest rate....in other words, the good guys. Don't see that happening, but what the heck, I can dream.

OCT

2008

Fred,

Thanks for chiming backi in.

I am convinced it would work, but I am still not sure about it. If the current lenders would just do the right thing in the first place this service would not even have to exist.

Borrowers are calling their current lenders and they are getting nowhere. They call me and ask for help. I sincerely appreciate your comments.

Gary, you have hit the nail right on the head. If the lenders/servicers had decent people with the authority to make a decision, this whole thing could be handled so much better than it is. There are a lot of former Realtors and Loan Officers out there that could help in this situation. One of the main complaints I have heard is that you can't ever get in touch with a person capable of making a decision.

So, what is the right way to proceed? I wish I knew. I still think that some form of enforced mediation would help. Voluntary isn't going to fix this problem. Thanks for the soap box. Take care Gary.

@ Fred... I am convinced that it would work also... but as mentioned, you need the lenders to bend here. Sure, would it be good to see the current lien holder to try and work something out prior to foreclosure... that sounds good.... but let me explain something to you in regards to that...

Prior to foreclosure or missed payments... and I am already seeing this now. But if you had the consumer try to get the investor to modify prior, wouldn't you think you would have borrowrers who are even financially okay to try this? You know how many phone calls that I have received from borrowers that haven't missed a payment.... have a decent rate and or payment... and make money... who are trying to get this program to work for them, just because they owe more than the house is worth... I had one person call me who has an interest only loan at 6.25%, who wanted to do this H4H program....

Overall, there is no answer. By supplying such programs and modifications, so many people who aren't in trouble are even trying to reduce their payments or mortgage balance. Fred, not trying to point the finger, but most of your comments to any of these types of blogs say for the most part that you don't think they will work or that they aren't good... or would be hard to work. But we need to start somewhere... if lenders would have tried to work with the borrower many years ago, the foreclosure rate would be down tremendously... but again, it's our economy that has helped with the high rate of foreclosures... just my .02

jeff belonger

Gary, not trying to hi-jack your blog, but need to respond to Jeff on this. I have said that most of these programs aren't good. I haven't found anyone that though they were. I have called for enforced mediation which I believe to be the answer. And, honestly, I believe even people that are paying their loans and are upside down on value should be able to mediate also. And that is by .02. If I am negative, I can only point to years of government action/inaction that has not been much help and banks that still haven't figure out how to work through this.

Thanks for the soap box Gary.

Hello Guys,

I have been reading your post her on loan modification, and that is what I offer along with insurance and annuities. We can help clients for 1900.00 and we include debt settlement along with it at no additional cost. and just sometimes the decreased payment on the credit cards will pay or help pay for the cost of the mod. if I can help please email me at maxis29@yahoo.com

OCT

2008

Fred,

Thanks for the additional feedback. I am not sure if this mod. program will work either, but it sounds like they are trying to do something. I will know by December if I am going to add this feature as part of my business.

Just today I got a call from a past client who got a divorce and owes on a house that is $100K upside down. She is struggling with the payment due to the divorce and called me looking for help.

I referred her to the H4H program. Again a mod. might of made sense for this client.

She just hopes that she will not lose the house and wants to stay in the home if she can.

Jeff,

I agree that the problem is complex and I also have a problem sitting on the fence doing nothing when I feel I could be of more help to the customers out there.

I will call you today, it sounds like you might have some insight to share. Thanks again.

Deborah,

Normally I would delete your message as SPAM, but maybe you are just trying to help. In the future let me know about your service before posting on it. I will leave it since I feel it has some relevance to the discussion of this post.

OCT

2008

It has become one of our business functions due to the calls we get. I try to coach them to call the mortgage company directly and ask for the loan modification or loss mitigation depts.

I also advise them to stay away from anyone requesting money up front. Many obtain the monies up front and the customer receives nothing in return.

They recently enacted a law here in Maryland that these companies can receive nothing in advance until services are renderred.

I usually stay away from these loans since there the owning mortgage company needs to cooperate and most are unwilling or don't know about the FHA Secure loan. Also, being inexperienced in doing this, I don't want the liability.

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