MOD SQUAD: How to Modify Your Mortgage

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Mortgage and Lending NMLS #94045

Len Harley's feature on Mod Scams is timely: I have been researching the issue and found 4 solutions that work for folks who are underwater and do not qualify for the Fannie/Freddie brand of Loan Modification.

1. The borrower negotiates directly themselves. After all your promissory note is a contractual agreement between two parties. Problem here is lenders strong-arm you and make you feel like a criminal for asking. (By the way, that's what happens if you call Hope Now the HUD hot line...they prequal and just turn you over to your lender to fend for yourself with little results to date)

2. Hire a modification specialist attorney. A real one who knows both real estate and mortgage law.... expect 6 months to a year and cost $10K or more. In really complicated cases I know it works and the results can be amazing if you have the right person actually on your team. Forget prepaid legal. They are about as skilled as the collection agencies. If there is any sniff of fraud on your loan this is the best way to go because the lender is legally responsible for underwriting your mortgage to RESPA and they are very afraid of being found in violation.

3. Find a bonafide loan modification company: In Washington state there are a handful who have been successfully modifying loans for about a year under the watchful eye of our very engaged Attorney General, Rob McKenna. Expect to pay a $750 deposit on phase one ($750 due at completion with refund of all but $300 if not successful) our SAG and Dept of Financial Institutions worked on this together and 20 states to follow as outlined in their new bill/law just released this month. OH, and loan modification people must be licensed loan officers or brokers who are both bonded and insured and put your deposit in an escrow account or trust fund. Expect to be engaged in the process and for it to take 60-90 days minimum. (I know folks who have benefitted from this approach because its based on what they can actually afford to pay.)

4. Get a BK specialisty attorney to advise if Chapter 7 or a combination of 7 and Chapter 13 will help you save your home. You must be able to handle a reduced mortgage for at least a couple of years or more...during which time your equity and your credit might start to recover.

The BEST PART of the Obama Rescue Home Affordable Plan is that is has brought the concept of Loan Modification out of the dark closets and back alleys. Follks are getting results. The fog is lifting. AND for those who are wondering...these options are not limited to primary residences. Ask yourself why a lender would not want to modify an investment or commercial property? If anything it's even more likely that an overburdened investor would walk away from a rental first and save their home...you get the picture. My motto: "If you don't ask you don't get...so ASK!"

All the Best! EQUITY TALKS

Loannetter

 

 

susan templeton
mortgage planner
www.loannetter.com

 

 
510-LO-31434   

510-MB-24707-50145    An approved Conventional, FHA/VA/USRDA and Reverse Mortgage Broker

   © Copyright 2009  Loannetter 

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SUSAN TEMPLETON IS A LICENSED LOAN ADVISER IN WASHINGTON

NMLS# 94045

                 

 

Interest rates and products are subject to change without notice and may or may not be available at the time of loan commitment or lock-in. Borrowers must qualify at closing for all benefits. Loannetter is a private brand owned and copyrighted by Susan Templeton.

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Christine Farkas 05/04/2009 02:41 AM
Topic:
ActiveRain Community
Location:
Washington Whatcom County Bellingham
Groups:
Mortgages
Investors
Posts to Localism
Construction
VA Loan Group
Tags:
loan modification
legal means
renegotiate your mortgage

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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

Susan,

Very interesting and very important post. Should the loan modification company be in the borrower's state or it does not matter?

Apr 20, 2009 03:20 PM #1
Rainmaker
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Susan Templeton
Bellingham, WA

Good point that came up in our conversation (2 hour meeting) today! It's important whoever is handling your modification know that this process 'standards' for what constitutes a fair process are being penned by state Consumer Advocates /Attorneys General. A pro should be able to handle your lender direcly in any state using the same make sense guidelines. This is new territory.

Apr 20, 2009 03:26 PM #2
Rainmaker
66,965
Susan Templeton
Bellingham, WA

Jon, I looked up our new 'interpretive statement' from our WA Dept of Financial Instituions and it states you must be a licensed loan originator to handle modifications in the state of Washington... and follow a sanctioned process (pretty basic right now) So yes, do check if your state has any laws to this effect.

Hopefully the consumer protection agencies will be able to investigate any scammers...so report any that you know of!  http://www.dfi.wa.gov/cs/interpretive_statements/mortgage/IS-2009-01.pdf  

Apr 20, 2009 05:26 PM #3
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Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Susan: Thanks for the post! This is helpful. I'm afraid most loan mods. won't work. Either the lender won't be interested or there will be (as has already started to happen) defaults down the line. In theory, it's a great idea. Perhaps this latest one will gain some traction. Take care.

Apr 21, 2009 01:53 AM #4
Rainmaker
66,965
Susan Templeton
Bellingham, WA

Hi Paul, We got to stop (not) meeting like this! Have you seen any good results for your clients? The process of enduring a BK in some ways works for the 80/20 crowd by potentially elminating their second...if you have a VERY good attorney. I heard of one person who got stuck with their 2nd because they didn't realize a document they had been asked to sign by the 2nd bank made them responsible for the shortfall. After all that work and agony you want a better result than that!

Apr 21, 2009 06:47 AM #5
Rainer
5,051
Testing Test
loan - Tustin, CA

Great info Susan thanks.  What is your opinion on the recent defeat of the bankruptcy legislation?  Do you think that will make it harder for homeowners to get banks to play ball?

May 03, 2009 02:07 AM #6
Rainmaker
66,965
Susan Templeton
Bellingham, WA

Hi Mark, The loan modifiers we know go to great lengths to qualify a client based on income, assets, and real situation.  I actually think this benefits the homeowner in that lenders will not be forced to modify unworkable terms dreamed up by a member of the judicial system without this understanding. The Obama rescue has provided incentives to help borrowers and lenders work together more efficiently...let's let that system do it's job.

May 04, 2009 07:18 AM #7
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Susan Templeton

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