WITH ALL THE LOAN MODIFICATION SCAMS OUT THERE, IS THERE SUCH A THING AS A REPUTABLE, HONEST LOAN MODIFICATION COMPANY?
We have all heard the news lately…”loan modification scam takes advantage of another homeowner”, or “call the lender yourself and don’t pay a third party to help you with your modification”. The news loves a bad story and makes one wonder if there are any good, honest loan modification companies out there?
THE POLITICALLY CORRECT THING TO SAY
Now, at www.adjustMYLOAN.com we absolutely think it is a good idea to be proactive when you are a homeowner facing a financial hardship and you believe you cannot make your upcoming mortgage payments. It seems like the natural thing to do (and the politically correct thing to say) and call your lender right away when you are experiencing problems paying your mortgage. The problem is that many homeowners who are not educated in the real estate / mortgage / loss mitigation world do not know what division to call, what to say, and most importantly, what financial information to disclose during those phone calls. What happens is many homeowners fall into three categories when they try and do a home loan modification themselves…”the disconnect”, the “sorry you don’t qualify”, or the worst one of them all the “here’s your crappy modification agreement”.
The “disconnect” is where you call and get transferred over and over, wait on hold forever, and eventually get disconnected. Do this a few times and the frustration is overwhelming. People already have a fear of confrontation and hate waiting on hold forever so many times this is enough to get them to quit.
The “sorry you don’t qualify”is when an uneducated homeowner calls their lender out of desperation and doesn’t understand that the lender is going to ask them for their financial information…sometimes right then and there over the phone. The poor homeowner discloses financials on-the-fly and ends up de-qualifying themselves because they don’t know what loan-to-value / debt-to-income ratio’s the banks are looking for. Again..the frustration is overwhelming because no matter if they qualify or not the fact remains they can’t afford their current payment. The loss mitigation departments at most major lenders are extremely slow and it takes the average consumer a couple of months to get any answers and by this time it might be too late! Lastly, the call centers at these banks are sometimes overseas and we all know how frustrating it can be when you get someone that barely speaks English telling you (without any feeling of empathy) that there is nothing they can do for you!
The “here’s your crappy modification agreement” is so common and it makes us nauseous. Many homeowners don’t have the time to educate themselves on the in’s and out’s of loss mitigation before attempting to modify their own home loan. They don’t understand the processes, how to get to the decision makers, or the fact that you can counter-offer and get better terms. Most wear out after talking to a un-empathetic loss mitigation negotiator at the bank and end up accepting whatever terms they can just to be done with it. Remember, the banks want to mitigate their loss…that’s why its called loss mitigation! They definitely don’t have your best interest in mind otherwise they would make it super easy to complete this process. If you don’t have a real estate / mortgage background, or you don’t have the time going back and forth with your lender(s) for months and months, contract the work out to a trained expert in loan modification negotiating.
THIS ONE IS OUR FAVORITE
How about this one…“call a HUD certified counselor and get a FREE modification”. While this advice sounds good, we all can agree that nothing good is cheap and seldom anything cheap is good! Free help from a counselor is just that…FREE help (not them actually doing it for you). Anyone can gather the necessary paperwork and submit it to the lender…what a homeowner needs is an aggressive person (or team of people) to fight for the best loan terms possible and not just a paperwork submission helper. Every “financial expert” on the news is telling homeowners to avoid paying up-front fee’s to modification companies and go to a HUD certified counselor for free help. These same people are so far removed from any financial struggles that they don’t feel the severity of the situation. It’s easy to give advice when you are not the one struggling financially, or fighting with your spouse everyday over finances. HUD counselors do not have the time to spend 40-50-60 hours fighting to get you better mortgage terms. In most cases they help you gather the necessary documents and submit them to the lender. Then whatever modification (if any) the lender gives after months and months of waiting is what you will have to accept. NOT AT ADJUSTMYLOAN.COM. We spend all the time necessary to aggressively fight to get you the best loan terms available.
NOTE: HUD Counselors do help you submit the correct financials so in that instance they are a good resource if you do insist on doing this yourself just don’t expect them to do the actual negotiations for you!
THE LOAN MODIFICATION MERRY-GO-ROUND
There was a news story about a congresswoman who tried and negotiate her own loan modification only to get the run-a-round and give up frustrated. CLICK HERE to watch the video. Yes, it is possible to get your own modification, but statistics prove that almost 40% of homeowners who achieve their own loan modification re-default within 6 months because the lender(s) put them into a half ass modification that was in the banks best interest…not the homeowners. DON’T BE A STATISTIC. There are loan modification companies out there who actually do the work they are promising to do and all it takes is some research to find the right one.
OUR SUGGESTIONS TO FINDING THE RIGHT LOAN MOD COMPANY
MAKE SURE THE PERSON YOU ARE DEALING WITH HAS A PHYSICAL BUSINESS ADDRESS AND BUSINESS PHONE NUMBER.
GET COPIES OF RECENTLY NEGOTIATED LOAN MODIFICATION AGREEMENTS TO PROVE THEY CAN DO THE JOB
DO NOT PAY A LARGE UPFRONT FEE…A SMALL FEE IS OKAY BUT IT SHOULD COME WITH A MONEY-BACK GUARANTEE IF THE MOD IS NOT SUCCESSFUL
MAKE SURE THE COMPANY YOU ARE USING HAS AN ONLINE TRACKING SYSTEM SO YOU CAN SEE THE PROGRESS OF YOUR LOAN MODIFICATION AT ALL TIMES
MAKE SURE YOU MEET THE COMPANY AT THEIR OFFICE AND SEE THAT THEY ARE CONDUCTING BUSINESS (GET TO KNOW THE COMPANY)
GET REFERRALS AND TESTIMONIALS TO VERIFY COMPANIES HISTORY
GET COPIES OF ALL PAPERWORK THAT OUTLINES THE BUSINESS RELATIONSHIP
WHAT MAKES ADJUSTMYLOAN.COM DIFFERENT
First and most importantly, we are a full-service (brick and mortar) loan modification company that has been negotiating loan modifications and short sales in Phoenix, Arizona for over 5 years. Our parent company is a member of the Better Business Bureau with zero complaints and can show you completed loan modification agreements between us and almost ever major lender. We are fully transparent and do not hide behind a corporate slogan…we invite you to get to know us in person or through our many videos on our website www.AdjustMyLoan.com. Our website, back-office tracking system, and negotiating processes are unique to us and designed to keep you educated and informed of your loan modifications progress from start to finish. NO OTHER LOAN MODIFICATION COMPANY HAS THE EXPERIENCE, INTEGRITY, AND PROCESSES WE HAVE HERE AT ADJUST MY LOAN. We invite you to get to know us and our professional Loan Modification staff. Lastly, we DO NOT CHARGE any expensive upfront fees for our loan mod service and always offer free consultations to see if you qualify!
Foreclosures Rise First Quarter 2009: Loan Modification Is A Solution!
Below is an article talking about how the foreclosure rate has surged in the first quarter of 2009. The temporary foreclosure halt of most major lenders, as well as Fannie and Freddie Mac at the end of last year is now over. More and more foreclosures are being filed and every homeowner in trouble of paying their mortgage payment is wanting to know whether or not the Obama “Making Homes Affordable” plan is going to help save their home! The stressful situation they are in is not uncommon and even though the government preaches to call the lender and work out a modification yourself sounds like the politically correct thing to say, it is not that easy to navigate the maze of automated phone systems and outsourced customer service centers that your lenders utilize. Getting professional help is a great option that way you can focus on making more money and spending time with your family and not worrying about negotiating with your lender(s)!
The Loan Modification Experts at adjustmyloan.com have negotiated hundreds of loan modifications and short sales for homeowners over the last few years. We are highly educated, loss mitigation specialists that have the training, systems, and energy to go after your lenders to get you the best loan terms possible. Trust, integrity, and honor are the core beliefs of our company and every one of our employees puts the customer’s needs first which is easy to see from the first conversation you have with our experts. We invite you to call us at 1-800-557-7573 and get a FREE LOAN MODIFICATION CONSULTATION from one of our loan mod consultants today.
The Following Article Was Taken From MSNBC.MSN.COM
Foreclosure actions surge in the first quarter
Upcoming big unknown: Will Obama mortgage relief help reverse trend?
WASHINGTON - The number of American households threatened with losing their homes grew 24 percent in the first three months of this year and is poised to rise further as major lenders restart foreclosures after a temporary break, according to data released Thursday.
The big unknown for the coming months, however, is President Barack Obama’s plan to help up to 9 million borrowers avoid foreclosure through refinanced mortgages or modified loans. The Obama administration expects its plans to make a big dent in the foreclosure crisis. But it remains to be seen whether the lending industry will fully embrace it, despite $75 billion in incentive payments.
The faltering economy is causing the housing crisis to spread. Nationwide, nearly 804,000 homes received at least one foreclosure-related notice from January through March, up from about 650,000 in the same time period a year earlier, according to RealtyTrac Inc., a foreclosure listing firm.
In March, more than 340,000 properties were affected, up 17 percent from February and 46 percent from a year earlier.
Foreclosures “came back with a vengeance” last month and are likely to keep rising, said Rick Sharga, RealtyTrac’s senior vice president for marketing.
Nearly 191,000 properties completed the foreclosure process and were repossessed by banks in the quarter. While the number was down 13 percent from the fourth quarter of last year, it is expected to rise through the summer and then possibly taper off.
Fannie Mae and Freddie Mac, the big mortgage finance companies, together with many banks had temporarily halted foreclosures in advance of Obama’s plan. Now armed with the details about which borrowers can qualify, the mortgage industry has begun foreclosing on ineligible borrowers.
The Treasury Department has signed contracts with six big loan servicing companies - including Citgroup, Wells Fargo and JPMorgan Chase. Many have already started processing loans as part of the government’s “Making Home Affordable” plan.
“We need to get the long-term solutions for these folks,” Shaun Donovan, Obama’s housing secretary, said in an interview.
In the coming months, Donovan said, there are still likely to be increased foreclosures, especially from vacant houses, second homes and those owned by speculators. None of those properties will qualify for a loan modification. However, he remained optimistic that overall foreclosures could start to decrease this summer.
But even industry executives who emphatically support the plan emphasize that it’s success isn’t guaranteed.
“The effectiveness of the plan overall obviously is going to depend on the level of industry participation,” said Paul Koches, general counsel of Ocwen Financial, which collects loan payments on subprime loans.
Many borrowers and consumer groups claim the modifications offered by the lending industry don’t do enough to help cash-strapped homeowners, despite more than a year of public prodding from regulators. Fewer than half of loan modifications made at the end of last year actually reduced borrowers’ payments by more than 10 percent, data released last month show.
Plus, the lending industry has been swamped by the unprecedented wave of calls from distressed borrowers. “You can’t wave a magic wand and make the loans suddenly modified,” Sharga said. “They’re all individual transactions.”
In RealtyTrac’s report, Nevada, Arizona, California and Florida had the nation’s top foreclosure rates. In Nevada, one in every 27 homes received a foreclosure filing, while the number was one in every 54 in Arizona. Rounding out the top 10 were Illinois, Michigan, Georgia, Idaho, Utah and Oregon.
As more and more homeowners realize that a loan modification is a viable solution to lower their monthly mortgage payments and avoid foreclosure, more and more fraudulent loan modification companies keep popping up to take advantage of the situation. Foreclosure rescue scams are nothing new and many homeowners have been taken advantage of in the past, however, these new loan modification scams are more devious and fraudulent then ever by masking themselves as “Attorney” (when they are really not), “Attorney-Based”, or even as ‘”Government Sponsored” (which is the worst of them all since there is no such thing)! We get dozens of homeowners each month reach out to us after they have been taken advantage of by a company or individual that promised to reduce their principal and/or get them a guaranteed loan modification only to pay an upfront fee and get no results. These unfortunate homeowners would then ask for a refund only to get the runaround or a disconnected number. The loan modification experts at www.AdjustMyLoan.com want to blow the whistle on these scam artists and lead generating companies and help homeowners avoid the same mistake as some of our current clients!
Understand Who You Are Submitting Your Information To:
The Lead Generating Company / Official Looking “Government” Website
Telemarketing has been around since the telephone became popular and over the real estate boom many telemarketing companies sold “refinance / loan products” and made millions! Once the real estate boom ended, so did their golden ticket! They immediately saw the need for a loan modification solution and since there were so many loan mod companies popping up they switched their pitch to loan modifications. They then sell these leads to companies or individuals for a fee ($5-$35 per lead) and get their leads from direct mailers or websites that look official but in reality do nothing but gather your personal data. The homeowner submits their information to the site thinking they are contacting a company but in reality they are only giving their private financial information to a telemarketing company. Below is a list of these websites to be aware of:
These are just a few of the many telemarketing companies that use your personal financial information to make money! WHY SEND YOUR INFORMATION TO A THIRD PARTY COMPANY LOOKING TO SELL A LEAD? Some of these websites look so official you really believe you are submitting your information to a government sponsored agency only to find out they are trying to charge you and expensive upfront fee for a service that doesn’t produce results!
Why Is AdjustMyLoan.com Different?
First and most importantly, we are a full-service (brick and mortar) loan modification company that has been negotiating loan modifications and short sales in Phoenix, Arizona for over 5 years. We are a member of the Better Business Bureau with zero complaints and can show you completed loan modification agreements between us and most major lenders. We are fully transparent and do not hide behind a corporate slogan…we invite you to get to know us in person or through our many videos on our website www.AdjustMyLoan.com. Our website, back-office tracking system, and negotiating processes are unique to us and designed to keep you educated and informed of your loan modifications progress from start to finish. NO OTHER LOAN MODIFICATION COMPANY HAS THE EXPERIENCE, INTEGRITY, AND PROCESSES WE HAVE HERE AT ADJUST MY LOAN. We invite you to get to know us and our professional Loan Modification staff. Lastly, we do not charge any expensive upfront fees for our loan mod service and always offer free consultations to see if you qualify!
Wachovia Loan Modification, Loss Mitigation Negotiation Service
FREE CONSULTATIONS AND NO UPFRONT FEE’S
AdjustMyLoan.com Has Perfected The Wachovia Loan Modification Process And Gets The Job Done
AdjustMyLoan.com, a National Loss Mitigation Company, has acquired the specific criteria and documentation to accelerate loan modification requests for mortgages serviced by Wachovia Home Loans and its subsidiaries. In an effort to stem the housing crisis, AdjustMyLoan.com is providing a specialized service to homeowners in default or facing foreclosure through Wachovia’s “Making Home Affordable Program”. Many homeowners who are struggling to pay their high monthly mortgage payment may qualify for one of Wachovia’s Loan Modification programs and lower their monthly mortgage payment dramatically!
Following President Obama’s Homeowner Affordability and Stability Plan introduced March 4, 2009, AdjustMyLoan.com and Wachovia aim to lower monthly mortgage payments to 31-38% of a given borrower’s gross monthly income. This decrease of interest rate is only the first step and we have successfully completed Wachovia Loan Modifications with interest rate reductions, term extensions, as well as the infamous principal balance reductions many believe are impossible to achieve! The loan modification experts at Adjust MyLoan have the proof that they can and will help you with your Wachovia loan modification needs.
For Wachovia borrowers who are currently delinquent or struggling to keep current, you may be eligible for the “Home Affordable Modification” on your current loan. Additionally, Wachovia has extended the foreclosure moratorium to give at-risk customers time to explore the new solutions in the Administration’s plan.
If you have an unaffordable home loan from Wachovia (owned by Wells Fargo), then it is time to learn about your options. Wachovia Loan modifications, which typically involve an adjustment to the interest rate, principal balance, arrearages, and term of an existing mortgage loan, are the preferred method for dealing with the housing crisis. By obtaining the tools to fast-track loan modifications with Wachovia, AdjustMyLoan.com offers a comprehensive plan to help Wachovia homeowners save their homes from foreclosure, bring loans current, and insure that on-time payments will continue for the life of the loan. Further, AdjustMyLoan.com is wiping out late payments and late fees through their negotiation efforts. Imagine being 3,4,5, or even 6 months or more behind and getting the Loan Modification Help you have been searching for to save your home from foreclosure! It is possible and we can show you proof that AdjustMyLoan.com’s system is working to help those that need Wachovia mortgage help.
Homeowners Will Need To Gather The Following:
Bank Correspondence / Foreclosure Notices
Hardship Letter Explaining Your Circumstances And Why You Must Modify Your Loan (must be signed by borrower)
2 Most Recent Mortgage Statements For Each Loan
2 Months Bank Statements For All Borrowers (12 Months If Self Employed)
2 Months Pay-Stubs For All Borrowers
2 Years Tax Returns Including W2’s, 1099’s And All Schedules For All Borrowers
Insurance Information (agent name, company, address, phone, email and policy number)
Any Documents To Verify Hardship (Death Certificate, Medical Bills, Divorce Paperwork ETC)
Then You Need To:
Contact a loan modification expert at AdjustMyLoan.com to pre-qualify for one of our streamlined programs. Our qualification takes only a few minutes and once qualified, rest assured AML is going to fight relentlessly to get you the best loan terms possible.
For more comprehensive information about options available to homeowners facing financial difficulties, please visit AdjustMyLoan.com and check out the loan mod learning center and blog post. There you will find the most up-to-date information on Wachovia’s “Making Home Affordable Program”, the Homeowner Affordability and Stability Plan, and the latest financials news and tips.
Wells Fargo Loan Modification, Loss Mitigation Negotiation Service
FREE CONSULTATION AND NO UPFRONT FEE’S
FOR IMMEDIATE RELEASE
AdjustMyLoan.com Has Streamlined the Loan Modification Process for Wells Fargo Customers
AdjustMyLoan.com, an attorney based loan modification company based in Phoenix, Arizona, has been successfully processing loan modification requests for Wells Fargo customers since April of 2008. Going in line with President Obama’s Homeowner Affordability and Stability Plan introduced March 4, 2009, AdjustMyLoan.com and Wells Fargo have now developed and implemented a fast-track process toward home-centered financial security with AdjustMyLoan.com’s Wells Fargo Loan Modification Program.
For Wells Fargo borrowers who are currently delinquent or struggling to keep current, AdjustMyLoan.com has developed a specialized service to provide sound solutions to distressed Wells Fargo mortgages. By offering a combination of adjustments to the interest rate, principal balance, arrearages, and term of an existing mortgage loan, AdjustMyLoan.com and Wells Fargo aim to bring loans current and insure borrowers can afford their mortgage payments for the life of the loan.
Loan Modifications are the preferred method for dealing with the housing crisis. Our streamlined process is designed to expedite the loan modification process with Wells Fargo and our professional loan modification negotiators handle the entire loan mod process from start to finish so you can focus on making money and spending time with your family! AdjustMyLoan.com now offers an exclusive comprehensive plan to help Wells Fargo homeowners save their homes from foreclosure.
Homeowners Will Need To Gather The Following:
Bank Correspondence / Foreclosure Notices
Hardship Letter Explaining Your Circumstances And Why You Must Modify Your Loan (must be signed by borrower)
2 Most Recent Mortgage Statements For Each Loan
2 Months Bank Statements For All Borrowers (12 Months If Self Employed)
2 Months Pay-Stubs For All Borrowers
2 Years Tax Returns Including W2’s, 1099’s And All Schedules For All Borrowers
Insurance Information (agent name, company, address, phone, email and policy number)
Any Documents To Verify Hardship (Death Certificate, Medical Bills, Divorce Paperwork ETC)
Then You Need To:
Contact a loan modification expert at AdjustMyLoan.com to pre-qualify for one of our streamlined programs. Our qualification takes only a few minutes and once qualified, rest assured AML is going to fight relentlessly to get you the best loan terms possible.
For more comprehensive information about options available to homeowners facing financial difficulties, please visit AdjustMyLoan.com and check out the loan mod learning center and blog post. There you will find the most up-to-date information on Wells Fargo’s many repayment and loan modification options and the latest financial news and tips.
Once again AdjustMyLoan.com gets quoted in the news! This story is a discussion of what percentage of a homeowners income should go towards a mortgage payment! This is a direct reaction to Obama’s “Homeowner Affordability and Stability Plan” previewed last week with details coming out March 4th, 2009. www.AdjustMyLoan.com is a professional Loan Modification Company that fights for homeowners to re-negotiate their current loan terms in order to lower their monthly mortgage payment. To us, the lower the mortgage payment to income ratio the better! What are your thoughts?
February 26th, 2009
Article from AZCentral.com and on the front page of the Arizona republic
WHAT PERCENTAGE OF INCOME SHOULD BE SPENT ON MORTGAGE PAYMENTS?
Under its new mortgage- relief plan, the Obama administration is staking a claim that most homeowners facing foreclosure should be able to pay 31 percent of their gross income for a mortgage.
Not 50 percent or not 60 percent, as is the case with many strapped homeowners.
But 31 percent of income still is a hefty number. Historically, borrowers’ mortgage payment limit was set at about 25 percent of their gross income before deductions for taxes and other subtractions.
With car payments, credit-card debt and everyday expenses, Phoenix-area mortgage brokers, bankers and others say that 31 percent still is too high for many homeowners.
“They would wind right back in default,” said Paul Klimke, president of the Central Arizona chapter of the Arizona Association of Mortgage Brokers.
Over the years, mortgage guidelines have been relaxed to enable more people to qualify for loans. In a time of rising prices, buyer demand and low interest rates, the Phoenix market allowed for refinancing, quick sales and home-equity lines of credit to help stretched consumers.
No more.
As sales slowed, home prices plummeted and foreclosures rose, many existing owners have been trapped. Their houses are worth much less than their loans, and their mortgage payments are killing them financially.
Experts predict a new wave of foreclosures over the year due to job losses and adjustable mortgages that will reset to higher rates and push up monthly payments.
Librada Martinez hopes the mortgage relief promised by the Obama administration will help her.
She makes $40,000 per year and has a $200,000 mortgage on a two-bedroom southwest Phoenix home that she bought for $180,000 in 2005. Her $1,400 mortgage payment is 47 percent of her gross income and 60 percent of her take-home pay. She was able to make the payments until an illness created unexpected medical bills.
“I tried to sell the house or get a roommate,” she said, adding that she finally just stopped making payments.
Martinez is hopeful she will be able to restructure her loan under the Obama plan but is concerned that homes in her neighborhood similar to hers now are selling for $70,000.
“I want to stay in my home - it’s perfect for me,” Martinez said. “But I don’t want to make payments on a $200,000 loan when my house is worth $70,000.”
The program announced by President Barack Obama in Mesa on Feb. 18 will offer financial incentives to lenders to restructure loan payments so that they are no more than 38 percent of the borrower’s income. More details about the plan are expected next Wednesday.
According to details already released, lenders would receive $1,000 up front for each modified loan and more down the road if the borrower stays current.
The government would use up to $75 billion in economic-stimulus funds to match additional loan modifications from the lender to bring down the payment from 38 percent to 31 percent.
For a household with gross annual income of $100,000, the monthly payment at 31 percent would be about $2,600. That’s about 50 percent of take-home pay after basic federal withholding. Add utility payments, food, health insurance, car payments and other consumer debt and there is likely very little left, said Joann Hauger, executive director of Community Housing Resources of Arizona. It is a non-profit organization that provides one-on-one mortgage default and pre-purchase counseling.
At this time, 38 percent is thought of as the upper limit for qualifying, with many households paying significantly more. Thirty-one percent is considered the upper limit of conservative guidelines for loan underwriting.
Before the boom, under traditional approval ratios for loan underwriting, 28 percent of gross income was considered the maximum for the mortgage payment and 38 percent for all debts combined.
Klimke noted that most of the people now in trouble have mortgage payments alone that are more than 38 percent of their gross income, sometimes much more.
“That’s what got us in trouble,” Klimke said.
Jay Butler, director of realty studies at Arizona State University, also believes 38 percent is too high in many cases.
“I’m curious what government will use as a definition of income and what the ratio would be for total debt,” he said.
Many of the people whose mortgages are in trouble have a lot of other debt and couldn’t afford the payments even if they were reduced to 31 percent of their income, counselors said.
Cody Sperber, a partner in AdjustMyLoan.com, a Phoenix firm that helps homeowners renegotiate loan terms, said that many of his clients are making mortgage payments that are 55 percent to 60 percent of their incomes.
Sperber said he has clients whose total debt payments are more than 90 percent of their income and owe $200,000 more than their homes are worth.
Hauger said that the homeowner bailout plan will be a challenge in Arizona because of the large number of lost jobs on top of the significant drop in home values - 34 percent in the fourth quarter alone, according to the 20-city Case-Shiller Home Price Index.
“There is a tremendous amount of consumer debt that could leave people unable to make payments even at a lower amount,” she said.
“In reality, there are an awful lot of people that no matter what, their homes won’t be saved.”
Below is an Press Release from the Fed’s concerning the upcoming changes to Regulation Z (Truth-In-Lending Act) also known as TILA. Unfortunately many lenders in the past took advantage of the market and made predatory loans to homeowners who are now in serious default. These upcoming changes will prevent further predatory loans from being originated but unfortunately not help those already affected. The professional Loan Modification Experts at AdjustMyLoan.com help homeowners who believe they were a victim of Predatory Lending to uncover these violations through a Forensic Loan Audit on their original loan paperwork and use these findings to negotiate new loan terms with their lenders. If you believe you were a victim, call our Loan Modification specialists at 1-800-557-7573 today.
Regulation Z (TILA) Press Release From The Feds
The Federal Reserve Board on Monday approved a final rule for home mortgage loans to better protect consumers and facilitate responsible lending. The rule prohibits unfair, abusive or deceptive home mortgage lending practices and restricts certain other mortgage practices. The final rule also establishes advertising standards and requires certain mortgage disclosures to be given to consumers earlier in the transaction.
The final rule, which amends Regulation Z (Truth in Lending) and was adopted under the Home Ownership and Equity Protection Act (HOEPA), largely follows a proposal released by the Board in December 2007, with enhancements that address ensuing public comments, consumer testing, and further analysis.
“The proposed final rules are intended to protect consumers from unfair or deceptive acts and practices in mortgage lending, while keeping credit available to qualified borrowers and supporting sustainable homeownership,” said Federal Reserve Chairman Ben S. Bernanke. “Importantly, the new rules will apply to all mortgage lenders, not just those supervised and examined by the Federal Reserve. Besides offering broader protection for consumers, a uniform set of rules will level the playing field for lenders and increase competition in the mortgage market, to the ultimate benefit of borrowers,” the Chairman said.
The final rule adds four key protections for a newly defined category of “higher-priced mortgage loans” secured by a consumer’s principal dwelling. For loans in this category, these protections will:
Prohibit a lender from making a loan without regard to borrowers’ ability to repay the loan from income and assets other than the home’s value. A lender complies, in part, by assessing repayment ability based on the highest scheduled payment in the first seven years of the loan. To show that a lender violated this prohibition, a borrower does not need to demonstrate that it is part of a “pattern or practice.”
Require creditors to verify the income and assets they rely upon to determine repayment ability.
Ban any prepayment penalty if the payment can change in the initial four years. For other higher-priced loans, a prepayment penalty period cannot last for more than two years. This rule is substantially more restrictive than originally proposed.
Require creditors to establish escrow accounts for property taxes and homeowner’s insurance for all first-lien mortgage loans.
“These changes have made for better rules that will go far in protecting consumers from unfair practices and restoring confidence in our mortgage system,” said Governor Randall S. Kroszner.
In addition to the rules governing higher-priced loans, the rules adopt the following protections for loans secured by a consumer’s principal dwelling, regardless of whether the loan is higher-priced:
Creditors and mortgage brokers are prohibited from coercing a real estate appraiser to misstate a home’s value.
Companies that service mortgage loans are prohibited from engaging in certain practices, such as pyramiding late fees. In addition, servicers are required to credit consumers’ loan payments as of the date of receipt and provide a payoff statement within a reasonable time of request.
Creditors must provide a good faith estimate of the loan costs, including a schedule of payments, within three days after a consumer applies for any mortgage loan secured by a consumer’s principal dwelling, such as a home improvement loan or a loan to refinance an existing loan. Currently, early cost estimates are only required for home-purchase loans. Consumers cannot be charged any fee until after they receive the early disclosures, except a reasonable fee for obtaining the consumer’s credit history.
For all mortgages, the rule also sets additional advertising standards. Advertising rules now require additional information about rates, monthly payments, and other loan features. The final rule bans seven deceptive or misleading advertising practices, including representing that a rate or payment is “fixed” when it can change.
The rule’s definition of “higher-priced mortgage loans” will capture virtually all loans in the subprime market, but generally exclude loans in the prime market. To provide an index, the Federal Reserve Board will publish the “average prime offer rate,” based on a survey currently published by Freddie Mac. A loan is higher-priced if it is a first-lien mortgage and has an annual percentage rate that is 1.5 percentage points or more above this index, or 3.5 percentage points if it is a subordinate-lien mortgage. This definition overcomes certain technical problems with the original proposal, but the expected market coverage is similar.
One element of the original proposal has been withdrawn. The Federal Reserve Board had proposed for public comment certain requirements pertaining to so-called “yield-spread premiums.” During the intervening period, the Board engaged in consumer testing that cast significant doubt on the effectiveness of the proposed rule. As part of its ongoing review of closed-end loan rules under Regulation Z, however, the Board will consider alternative approaches.
In finalizing the rule, the Board carefully considered information obtained from testimony, public hearings, consumer testing, and over 4,500 comment letters submitted during the comment period. “Listening carefully to the commenters, collecting and analyzing data, and undertaking consumer testing, has led to more effective and improved final rules,” Governor Kroszner said.
The new rules take effect on October 1, 2009. The single exception is the escrow requirement, which will be phased in during 2010 to allow lenders to establish new systems as needed.
In a related move, the Board is publishing for public comment a proposal to revise the definition of “higher-priced mortgage loan” under Regulation C (Home Mortgage Disclosure), which requires lenders to report price information for such loans, to conform to the definition the Board is adopting under Regulation Z.
President Obama In Mesa, Arizona To Unveil His Administrations Foreclosure Plan
President Obama was in Mesa, Arizona on Wednesday to discuss an aggressive “Stop Foreclosure Plan” his administration plans to put in place over the next few weeks. The plan essentially was broken down into two major parts with the finer details to be disclosed within two weeks.
The first program is to help 4-5 million struggling home owners with loans owned or guaranteed by Fannie Mae or Freddie Mac to help them refinance. AdjustMyLoan.com interpreted this as a way for upside down homeowners why were “playing by the rules” as Obama mentioned to get a guaranteed refinance to a set interest rate.
Does this mean homeowners who qualify for this solution will not need an appraisal? Are they going to refinance these homeowners to todays values or just reset the interest rate? Also, who is to set the interest rate? A government agency?
The second program is a Loan Modification Plan with government subsidies to lenders to reduce their monthly interest payments. Finally someone is speaking our language! Below are some bullet point how the plan will work:
Lenders who participate will be responsible for bringing down interest rates or doing principal balance reductions so the monthly mortgage payment is no more than 38% of pre-tax income.
After that the government would match the amount reduced by the lender to bring the payments down to 31% of their pre-tax income.
$1000 incentive for servicing agents (who collect fees for refinanced or delinquent mortgages) to work with qualified borrowers to modify loans. They will get $1000 for each loan they modify plus another $1000 per year for each year that homeowner remains current on their modified loan!
Homeowners who recieve this Loan Modification will recieve $1000 a year for five years off of the principal amount owed as long as they stay current! (HUGE)
Government money will be used to help homeowners avoid default all together by giving a $500 incentive to lenders and $1500 incentive to homeowners if a loan gets modified before the homeowner goes into default.
The final part of the plan would allow bankruptcy judges to “Cram Down” primary residences and complete forced loan modifications if a homeowners qualifies for bankruptcy protection. This would allow judges to lower interest rates, extend out the length of the loan, and reduce the principal amount owed (cram down) on the mortgage! (HUGE)
Currently homeowners who owe more than 80% of their homes worth have a difficulty refinancing or selling in today’s market. This plan should help about 9 million homeowners nationwide and cost about $75 billion dollars but will be well worth it if implemented correctly.
AdjustMyLoan.com is a national Loan Modification Company based out of Phoenix, Arizona that specializes in loan modifications and forbearance agreements. Our loan modification experts audit, package, propose, and negotiate loan modifications on our clients behalf. We offer FREE LOAN MODIFICATION CONSULTATIONS and never charge an upfront fee for our service! Call the loan modification experts at AdjustMyLoan.com today and get the professional help you deserve.
HOW TO RUN A LOAN MODIFICATION BUSINESS WITH HONOR AND INTEGRITY!
This is Cody Sperber one of the managers of www.AdjustMyLoan.com. I created this post because I have had the concept of “running a loan modification business with honor and integrity” on my mind and I thought it would be a good idea to share some of the core beliefs we believe in at AdjustMyLoan.com with you (our potential client).
With the news constantly looking for a worthy story, and many fly-by-night loan modification companies popping up everywhere, I feel like we (meaning everyone who does loan modifications) get pegged into the same corner as vultures who take advantage of homeowners facing major financial difficulties. And even though there are many who do take advantage of the situation, there are a few companies like AdjustMyLoan.com that are trying to position themselves to provide a valuable service with full disclosure and a pay system that protects both the homeowners and us as businessmen. We believe we have created a check and balance system that all Loan Modification companies should mirror if they are going to do business self regulated, ethical, and legal! We have taken some of our concepts from the Better Business Bureau as well as the United States Navy (which I am proud to have served for). We have researched the most aggressive foreclosure rules and laws (which happen to be in California and Florida), and implemented them into our contracts even though the great state of Arizona does not enforce these strict policies. Below is a list of responsible and ethical practices found at AdjustMyLoan.com that we wanted to share with you:
We are not in the business of coaching homeowners. We empower them through education of their situation and possible solutions. If any of our employees gets caught coaching homeowners to not make mortgage payments etc…then we let them go immediatly. We constently have training of how to interact with homeowners and their questions.
We offer FREE LOAN MODIFICATION CONSULTATIONS and charge NO UPFRONT FEES for our Arizona Loan Modification Service. We utilize FIDELITY NATIONAL TITLE to create an escrow account and escrow the money homeowners give us until we perform the services outlined in our contract. If we fail to perform, then the money automatically gets refunded to the client with no questions asked.
Our contracts are clear and to the point. We have a 3 day right of recession policy and we clearly outline our services and explain when it is that we will earn our money.
We have a standard fee we charge for our services and do not charge a percentage of the loan balance like some companies.
We are a member of the Better Business Bureau, D&B, and have a strict privacy policy where we do not rent or share any information with third parties without full disclosure and permission. Our offices are kept secured and only files we are actively working on are taken out of their locked file drawers.
We own the building that we are in (brick and mortar) and do not go to homeowners houses to sign people up at their kitchen tables!
Our management constantly has training from our legal counsel to keep us up to date on current foreclosure rules and laws.
Our employees were recruited directly from the banks we are negotiating with and go through extensive training before working on client cases.
Lastly, we only accept clients whom we truly believe we can modify their loan(s) for. We are not a chop shop that takes on any file that comes through the door only to throw it against the wall to see what sticks. We carefully pre-qualify all potential files before acceptance into our program.
In the end, integrity is a core concept that either a business centers itself around or completely ignores. There is no middle ground or grey area in the loan modification business. The talented Arizona Loan Modification Professionals at AdjustMyLoan.com want to earn your trust as well as your business and show you what an ethical loan modification company looks like.
CALL US TODAY FOR YOUR FREE LOAN MODIFICATION CONSULTATION
ADJUSTMYLOAN.COM EXPLAINS ARIZONA’S ANTI-DEFICIENCY LAW
Okay…first a quick disclaimer: AdjustMyLoan.com (Arizona Loan Modification Experts) is not giving you legal advice, stop foreclosure advice, or creating any type of client-Attorney relationship. This is informational only and we suggest you speak with a trained real estate / tax attorney about your specific situation and the rules / laws in Arizona as they pertain to Arizona’s Anti-Deficiency Statutes. Now, on to the good stuff.
When a homeowner purchases residential property in Arizona and defaults on their loan(s), their lender(s) have certain remedies they can pursue. They can sue the borrower directly or conduct either a Judicial or Non-Judicial foreclosure. Since Arizona is a Trust / Deed state, in most cases lender(s) file for foreclosure (sending you a Notice Of Default) and conduct a Trustee Sale (non-judicial foreclosure).
In some states, when a home is sold at a foreclosure sale and the amount it sells for is not enough to cover the underlying debt secured by the real estate, the lender can come after the homeowner for the Deficiency. Arizona has two “Anti-Deficiency” statues that will often apply to loans secured by residential real estate that can protect you from this happening! The first one applies to mortgages that are foreclosed on judicially (this practice is rarely used anymore but if you want to learn more, see A.R.S. 33-729(A)). The second Anti-Deficiency statute applies only to deeds of trust when foreclosed via a trustee sale (see A.R.S. 33-814(G)).
This is the anti-deficiency rule most homeowners care about and the one we will focus on.
In order to be protected under this statute, you must have residential property that is used for single-family or dual-family dwelling, and on 2 1/2 acres or less. (Commercial properties and Multi-Family units larger than a duplex are not protected under this statute) Next, you want to understand what kind of money you borrowed. Answer this question; Did the money you borrowed pay for all or part of the home you purchased?
PURCHASE MONEY
If all or part of the money you borrowed was used to purchase the property, NO DEFICIENCY will be available except in the case of voluntary waste (A.R.S. 33-729(A)). Voluntary Waste is when you damage the home and diminish the value (so if you are short selling your home or letting it go to foreclosure, don’t hire a salvage company to come gut the property…you can be held liable for all damages!!!) We consider money borrowed to purchase the property as “Purchase Money” because you basically went to a bank and borrowed money to buy a home and the home itself was the only security for the loan!
Refinance loans also fall under this protection as long as you did not get a “Cash Out Refi”. The law is a little unclear if a lender can actually come after you if you did a “Cash Out Refi” because the Anti-Deficiency protection under A.R.S. 33-729 (A) applies to loans used for payment of all “or part” of the purchase price! (See Bank One v. Beauvais, 188 Ariz. 245, 937 P. 2d 809 (App. 1997)) So if you did a “Cash Out Refi” and you are being sued for a deficiency, you may have a chance….but probably not!
NON PURCHASE MONEY
If the money you borrowed was not used to purchase the property “Non-Purchase Money“, then you might have a problem (Home Equity Lines of Credit fall under this type of money). Your lender can choose to either sue you directly on the note and waive security of the mortgage or deed of trust, file a Judicial Foreclosure and after the sale sue you for any deficiencies, or just continue with a Trustee Sale. If they just continue on with the Trustee Sale, then you are in the clear and should be protected against further judgements (See A.R.S. 33-814 (G)). If the lender decides to file a Judicial Foreclosure they will file a lawsuit and seek a judgement foreclosure on the mortgage or deed of trust. This process is expensive and time consuming (sometimes lasting up to 12 months). If this happens, the homeowner will have up to 6 months from the date of the filing to bring the loan current, but if they fail to do so, the property will be sold at a sheriff’s sale and the lender will have up to 3 months to sue for the deficiency. The amount of deficiency is typically limited to the difference between the total amount owed and the fair market value of the property (not necessarily the auction price). Lastly, the lender can just sue on the note, forgoing any security in the property. They would do this if you have little or no equity, have other collectible assets, and they do not want to wait up to a year for a Judicial Foreclosure to work its way through the system. THIS IS THE ONE YOU NEED TO BE WORRIED ABOUT AND IF YOU DO GET SUED…HIRE AN ATTORNEY IMMEDIATLY!
FHA, VA, AND HUD LOANS
These type of loans have different collection rules and can result in action against the person. If you have these type of loans, we suggest you get real proactive real quick when working with the lender(s) and if you do get in trouble, hire an attorney to represent you!
SUMMARY OF ALL THIS LEGAL MUMBO JUMBO
Arizona is a Trust / Deed state meaning we use Deeds of Trust to secure residential real estate. If you have a single family or duplex home on 2 1/2 acres or less, and your loan is “Purchase Money”, you are protectedfrom deficiency regardless if the lender uses a trustee sale or judicial foreclosure.
If your loan is NOT “Purchase Money” you may be liable for any deficiency if your lender uses a Judicial Foreclosure, or waives the deed of trust and sues directly on the note. If your lender decides to do the traditional Trustee Sale, you are protected from further deficiency judgements!
CAN AN ARIZONA LOAN MODIFICATION GIVE ME DEFICIENCY PROBLEMS?
No, an Arizona Loan Modification will not trigger a deficiency judgement because you are not selling the property, you are just recasting the mortgage. AdjustMyLoan.com helps homeowners audit, package, propose, and negotiate loan modifications on their behalf. In every loan modification proposal we build, we ask for a reduction in the principal amount owed (Principal Balance Reduction). Many homeowners are “upside down” in their mortgage(s) and owe as much or more than their home is currently worth so we attempt to reduce the amount owed to reset the loan back to current market values. If approved by your lender(s), this Principal Balance Reduction can trigger a tax event and the lender could issue a 1099(c) in the amount that was written off, BUT WILL NOT AFFECT OR CAUSE A DEFICIENCY EVENT! We ask all lender(s) to waive their right to 1099(c) our clients as part of the acceptance of our proposals…in most instances this works and the lender absorbs the tax ramifications as part of the deal!
ADJUSTMYLOAN.COM “ARIZONA LOAN MODFICATION EXPERTS” WANTS TO EARN YOUR BUSINESS!
AdjustMyLoan.com is a national loan modification company based out of Phoenix, Arizona. Our Loan Modification Experts want to educate homeowners on any “Stop Foreclosure” options available to them and teach them how a loan modification can help them avoid foreclosure, lower their monthly mortgage payment, and maintain their credit. We are a member of the Better Business Bureau and have many referrals and testimonials to prove our business ethics. We offer FREE LOAN MODIFICATION CONSULTATIONS to see if you qualify for any Arizona Loan Modification Programs and have a tracking system so you can follow your loan modification progress from start to finish. If you are interested in learning how a loan modification can help you and your family, call the phone number below today!
