Details of President Obama’s stop foreclosure plan “Making Homes Affordable” was released yesterday (March 4th, 2009) and so begins the journey of Government Assisted Loan Modifications! At www.AdjustMyLoan.com we have always been a fan of the Government subsidizing lenders, servicers, and investors for completing loan modifications and think this is a step in the right direction but is it enough? Below we outline some facts of the new plan as well as give you a quick video to watch. About 7-9 million struggling homeowners should qualify for help according to the plan but in won’t help many in states like Arizona, Florida, and California where home prices have declined so much that homeowners are underwater over and above the plans 105% qualifying mark. Also, one noticeable missing piece is a subsidized “Principal Balance Reduction” measure that would reset home values to current market rates! Maybe the future bankruptcy “Cram down” legislation that is trying to get passed right now will force lenders to enact voluntary programs to write down negative equity!
HOMEOWNERS BEWARE…even though this plan is subsidized by the Federal Government it is not a forced program. Lenders can choose to work within the guidelines of the plan or not so remember that your bank still has their best interest at heart and not yours. They could still put you into a loan modification program that does not necessarily have the best loan terms available. By educating yourself on your options or getting professional representation you could walk away with a much better Loan Modification than if you just call your lender directly without first devising a plan.
Now let’s talk about loan modifications:
How Will The Modification Part Of The Plan Work?
In summary, participating servicers will (in order):
•Determine that a loan meets the minimum eligibility criteria (owner occupied, originated before January 1, 2009, UPB equal to or less than $729,750). If yes:
•Obtain sufficient income information to determine if the borrower has a front-end debt-to-income (DTI) ratio of 31%or greater (verbal income may be accepted for initial evaluation subject to verification prior to final approval). If yes:
•Capitalize (add to the loan amount) accrued interest, past due taxes and insurance, delinquency charges paid to third parties (e.g., for inspecting the property), and escrow advances by the servicer - but not late fees or other default fees charged by the servicer;
•Determine how much of an interest rate reduction is required to get the borrower’s mortgage payment to 31% DTI, and if the DTI still exceeds 31% at the rate floor of 2%, modify the loan in other respects specified in the Guidelines;
•Apply a Net Present Value (NPV) test to determine if modification (including the incentive payments) provides the investor with a better financial outcome than foreclosure. If yes:
•Put the borrower on a trial modification at the new interest rate and payment for three months.
•If the borrower is current at the end of the trial modification period, the servicer will execute a modification agreement that includes escrows for taxes and insurance even if the prior loan was not escrowed.
At AdjustMyLoan.com it is business as usual. We are helping more and more homeowners negotiate a reasonable loan modification with their lenders and continue the fight to save as many homes as possible from foreclosure. Many homeowners have questions about this new plan but only time will tell if it really works or not. At the end of the day, it still is a voluntary plan that only affects mainly Fannie and Freddie loans and has strict qualifying measures that could bog down the program. If you are a homeowner trying to navigate your way towards a loan modification, please call our Loan Modification Expertsat 1-800-557-7573 and recieve a FREE LOAN MODIFICATION CONSULTATION.
Borrowers Who Are Current on Their Mortgage Are Asking:
1. What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?
Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.
2. I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.
3. How do I know if I am eligible?
Complete eligibility details will be announced on March 4th when the program starts. The criteria for eligibility will include having sufficient income to make the new payment and an acceptable mortgage payment history. The program is limited to loans held or securitized by Fannie Mae or Freddie Mac.
4. I have both a first and a second mortgage. Do I still qualify to refinance under the Homeowner Affordability and Stability Plan?
As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible to refinance under the Homeowner Affordability and Stability Plan. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms on the first mortgage.
5. Will refinancing lower my payments?
The objective of the Homeowner Affordability and Stability Plan is to provide creditworthy borrowers who have shown a commitment to paying their mortgage with affordable payments that are sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in
their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
6. What are the interest rate and other terms of this refinance offer?
The objective of the Homeowner Affordability and Stability Plan is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.
7. Will refinancing reduce the amount that I owe on my loan?
No. The objective of the Homeowner Affordability and Stability Plan is to help borrowers refinance into safer, more affordable fixed rate loans. Refinancing will not reduce the amount you owe to the first mortgage holder or any other debt you owe. However, by reducing the interest rate, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.
8. How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?
To determine if your loan is owned or has been securitized by Fannie Mae or Freddie Mac and is eligible to be refinanced, you should contact your mortgage lender after March 4, 2009.
9. When can I apply?
Mortgage lenders will begin accepting applications after the details of the program are announced on March 4, 2009.
10.What should I do in the meantime?
You should gather the information that you will need to provide to your lender after March 4, when the refinance program becomes available. This includes:
· information about the gross monthly income of all borrowers, including your most recent pay stubs if you receive them or documentation of income you receive from other sources
· your most recent income tax return
· information about any second mortgage on the house
· payments on each of your credit cards if you are carrying balances from month to month, and
· payments on other loans such as student loans and car loans.
Borrowers Who Are at Risk of Foreclosure Are Asking:
1. What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?
The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.
2. Do I need to be behind on my mortgage payments to be eligible for a loan modification?
No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
3. How do I know if I qualify for a payment reduction under the Homeowner Affordability and Stability Plan?
In general, you may qualify for a mortgage modification if (a) you occupy your house as your primary residence; (b) your monthly mortgage payment is greater than 31% of your monthly gross income; and (c) your loan is not large enough to exceed current Fannie Mae and Freddie Mac loan limits. Final eligibility will be determined by your mortgage lender based on your financial situation and detailed guidelines that will be available on March 4, 2009.
4. I do not live in the house that secures the mortgage I’d like to modify. Is this mortgage eligible for the Homeowner Affordability and Stability Plan?
No. For example, if you own a house that you use as a vacation home or that you rent out to tenants, the mortgage on that house is not eligible. If you used to live in the home but you moved out, the mortgage is not eligible. Only the mortgage on your primary residence is eligible. The mortgage lender will check to see if the dwelling is your primary residence.
5. I have a mortgage on a duplex. I live in one unit and rent the other. Will I still be eligible?
Yes. Mortgages on 2, 3 and 4 unit properties are eligible as long as you live in one unit as your primary residence.
6. I have two mortgages. Will the Homeowner Affordability and Stability Plan reduce the payments on both?
Only the first mortgage is eligible for a modification.
7. I owe more than my house is worth. Will the Homeowner Affordability and Stability Plan reduce what I owe?
The primary objective of the Homeowner Affordability and Stability Plan is to help borrowers avoid foreclosure by modifying troubled loans to achieve a payment the borrower can afford. Lenders are likely to lower payments mainly by reducing loan interest rates. However, the program offers incentives for principal reductions and at your lender’s discretion modifications may include upfront reductions of loan principal.
8. I heard the government was providing a financial incentive to borrowers. Is that true?
Yes. To encourage borrowers who work hard to retain homeownership, the Homeowner Affordability and Stability Plan provides incentive payments as a borrower makes timely payments on the modified loan. The incentive will accrue on a monthly basis and will be applied directly to reduce your mortgage debt. Borrowers who pay on time for five years an have up to $5,000 applied to reduce their debt by the end of that period.
9. How much will a modification cost me?
There is no cost to borrowers for a modification under the Homeowner Affordability and Stability Plan. If you wish to get assistance from www.AdjustMyLoan.com visit their website or call their toll free number 1-800-557-7573. They do not charge upfront fee’s for their loan modification program.
10. Is my lender required to modify my loan?
No. Mortgage lenders participate in the program on a voluntary basis and loans are evaluated for modification on a case-by-case basis. But the government is offering substantial incentives and it is expected that most major lenders will participate.
11. I’m already working with my lender / housing counselor on a loan workout. Can I still be considered for the Homeowner Affordability and Stability Plan?
Ask your lender or counselor to be considered under the Homeowner Affordability and Stability Plan.
12. How do I apply for a modification under the Homeowner Affordability and Stability Plan?
You may not need to do anything at this time. Most mortgage lenders will evaluate loans in their portfolio to identify borrowers who may meet the eligibility criteria. After March 4 they will send letters to potentially eligible homeowners, a process that may take several weeks.
If you think you qualify for a modification and do not receive a letter within several weeks, contact your mortgage servicer or www.AdjustMyLoan.com to see if you can participate in the program. Please be aware that servicers and counseling agencies are expected to receive an extraordinary number of calls about this program.
13.What should I do in the meantime?
You should gather the information that you will need to provide to your lender on or after March 4, when the modification program becomes available. This includes
· information about the monthly gross income of your household including recent pay stubs if you receive them or documentation of income you receive from other
sources
· your most recent income tax return
· information about any second mortgage on the house
· payments on each of your credit cards if you are carrying balances from month to month, and
· payments on other loans such as student loans and car loans.
14.My loan is scheduled for foreclosure soon. What should I do?
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 Specializes In Countrywide Loan Modifications! Get The Professional Help You Deserve…Call AdjustMyLoan.com Today!
Countrywide Home Loans might just be the worst servicer in America!!! YES THEY ARE DOING WORKOUTS….NO THEY ARE NOT AS EASY TO GET AS YOU MIGHT THINK! If you are struggling to make your monthly mortgage payments, and you have a Countrywide home loan, then call the Arizona Loan Modification Experts at AdjustMyLoan.com and get a Countrywide Loan Modification done today. Dealing with a large lender such as Countrywide Financial can be frustrating and time consuming. While Countrywide is offering loan work out plans to many of it’s distressed homeowners, not everyone will qualify. Take a second and educate yourself on what a lender like Countrywide is looking for and what documentation you will need when requesting a Countrywide Loan Modification.
First, realize that when you initially call your lender you are going to be speaking with an employee that has zero ability to help you in any way except regurgitate information! Stay calm no matter what they tell and keep pressing the fact that you are no longer able to make your mortgage payments and need to qualify for a workout / loan modification. Ask them to send you out the necessary documentation you will need to fill out and DO NOT GIVE THEM FINANCIALS OVER THE PHONE AT THIS TIME. You want to take some time and develop a strategy that will support your loan modification request and if you start giving them information this soon, you might shoot yourself in the foot and get denied a loan mod because you make too much money!
Second, gather the following documentation you will need to support your case:
Paycheck Stubs (at least 2)
Tax Returns (2 years)
Recent Bank Statements
Write A Hardship Letter Explaining Your Situation (see link for examples)
Any Documents That Support Your Case Such As Death Certificates, Medical Bills, Lawsuit Paperwork etc.
You need the above documents to support your request and are part of a Countrywide Loan Modification package. By creating a complete professional looking proposal, you are making the home retention negotiators job easier and they will be more likely to work with you if you try and do this on your own!
Third, decide if you have the time - energy - and skill set to deal with your own Countrywide Loan Modification. If you do, fill out the forms the bank sends you and try and negotiate it yourself. But if your like most people, you will want to hire a professional representative with real negotiation experience to help you get the best loan terms possible. They layers of beurocratic bullcrap as well as the fact that Countrywide is mainly a Servicer for investors on Wallstreet make the negotiation process difficult, time consuming, and most of all…FRUSTRATING.
AdjustMyLoan.com has hired negotiators directly from Countrywide’s Loan Modification department. We figured if we wanted to get the job done right, hire directly from the lenders you are trying to negotiate with! 1,2,3,4,5,6,7…. The list keeps getting bigger of Countrywide Loan Modifications we keep getting done because we understand their process, we know what they are looking for, and yes, we DO HAVE INSIDE CONTACTS AT THE HOME RETENTION DEPARTMENT!
In Arizona, 13,000 homeowners will be receiving a letter from Countrywide offering a loan modification because our great foreclosure fighting Attorney General Terry Goddard who helped spearhead a settlement that uncovered Countrywides deceptive lending practices! If your one of the 13,000, then you should send Terry Goddard some flowers and a thank you card…if your not, you should call AdjustMyLoan.com and get some professional help.
AdjustMyLoan.com is a national loan modification company based out of Phoenix, Arizona. Our professional Countrywide Loan Modification Experts can help you audit, package, propose, and negotiate a Countrywide Loan Modification today. Call our toll free number 1-800-557-7573today and receive a FREE COUNTRYWIDE LOAN MODIFICATION CONSULTATION.
BELOW IS A LIST OF FAILED BANKS COURTESY OF THE FDIC. THESE “BLACK SHEEP” LENDERS HAVE BEEN TAKEN OVER BY THE FDIC OR SOLD TO OTHER BANKS AND ARE MOTIVATED TO MODIFY THEIR LOANS TO CLEAR THEIR BOOKS!!! IF YOU EVER WANT A FREE LOAN MODIFICATION CONSULTATION, CONTACT THE ARIZONA LOAN MODIFICATION EXPERTS AT ADJUSTMYLOAN.COM OR CALL OUR TOLL FREE NUMBER 1-800-557-7573.
FDIC FAILED BANK LIST
The FDIC is often appointed as receiver for failed banks. This page contains useful information for the customers and vendors of these banks. This includes information on the acquiring bank (if applicable), how your accounts and loans are affected, and how vendors can file claims against the receivership.This list includes banks which have failed since October 1, 2000.
Below are a few advantages of a Loan Modification, as well as general qualifications to get accepted in a Loan Modification Program. We put this list of Loan Modification Informationtogether to help you understand what most banks are looking for before they choose to proceed with a work-out plan! If you are considering conducting a Loan Modification, www.AdjustMyLoan.com would love to earn your business. We offer FREE LOAN MODIFICATION CONSULTATIONS and can let you know quickly if we think their is a solution to your housing problem. Call our toll free phone number 1-800-557-7573 today and get the professional help you deserve.
AdjustMyLoan.com Comments On Whether Bankruptcy Judges Should Be Allowed To Force Lenders To Do Loan Modifications?
This post is a result of Citigroup announcing ( http://www.usatoday.com/money/economy/housing/2009-01-08-citi-mortgages_N.htm) its support of a “controversial bill in Congress to let bankruptcy judges reduce what debtors owe on home mortgages in an effort to stem the USA’s rising tide of foreclosures.” On the surface, the Professional Loan Modification Experts at AdjustMyLoan.com support this bill, but we do want to take a look at both the positive and negative affects it could have if passed! On the positive side, homeowners that are falling behind on more than just their mortgage payments and have to file bankruptcy, would have a real solution to clearing their debt, lowering their monthly mortgage payment, and saving their home from foreclosure! Also, it could cause other forms of loan modification programs to come to existence as a direct result of the bill being passed. Any movement towards Principal Balance Reductions on the amounts homeowners owe on their mortgages is a good move for everyone!
On the negative side, it may force many homeowners who just have a “housing problem” and not problems with their other bills to file bankruptcy just to qualify for some relief. Also, it could cause prices of mortgages to increase for everyone due to the lenders risk. What about the contracts between lenders who are acting as servicing agents and the Wall Street investors who purchased Mortgage Backed Securities? Would these “forced loan modifications” violate their rights? Lastly, is giving one person the power to decide how much, if any mortgage help necessarily a good idea? I guess we will have to wait and see what the pre-qualifications are outlined in the bill. With an estimated 8.1 million homeowners risking foreclosure, it could revamp the appraisal industry if every home within these programs had to have a certified independent appraisal!!!
Below is the article from USA Today about Citigroup’s backing of this bill:
By Julie Schmit and Stephanie Armour, USA TODAY
Lending giant Citigroup (C) on Thursday threw its support behind a controversial bill in Congress to let bankruptcy judges reduce what debtors owe on home mortgages in an effort to stem the USA’s rising tide of foreclosures.
The proposal, pushed by Democratic lawmakers, could be included in economic stimulus legislation.
The banking industry has long fought such “cramdown” legislation, saying that it would raise costs for other mortgage borrowers.
But Citigroup’s backing - after winning some concessions on the proposal’s terms - may persuade other banks to do the same and encourage the passage of legislation, supporters say.
”This would help hundreds of thousands of people quickly reach loan modifications,” says Kathleen Day of the Center for Responsible Lending, which supports the measure. “If you can keep people in their homes, everybody wins.”
An estimated 8.1 million U.S. homeowners are at risk of foreclosure.
The compromise was struck between Citigroup and top lawmakers, including Sen. Richard Durbin, D-Ill., and Sen. Charles Schumer, D-N.Y. Schumer said several banks have expressed interest.
Citigroup, in a letter to lawmakers Thursday, said the change would be an additional tool to help troubled homeowners and “represent an important step forward.”
But the Mortgage Bankers Association said in a statement it remained opposed to cramdown legislation because it would destabilize an already turbulent mortgage market.
Under the bill, only loans originated before the measure’s enactment could be altered. Lawmakers had sought the change for all loans. Also, borrowers would have to show that they attempted to contact their lenders to modify the loans before they filed for bankruptcy.
Judges could lower mortgage principal, change interest rates or extend terms.
Currently, bankruptcy judges can alter loan terms for vacation homes and other debt, but not mortgages on primary residences. Giving judges that power would not only help troubled homeowners, but prod banks to do more loan modifications before homeowners go to bankruptcy court, supporters say. So far, banks’ voluntary programs have had only minimal success.
“Whatever (lenders) were doing was working really badly,” says Patrick Newport, an IHS Global Insight economist.
If you are interested in learning how a LOAN MODIFICATION can help you lower your monthly mortgage payment, avoid foreclosure, and stay in your home, or you just want to educate yourself on the qualifications needed to apply for a LOAN MODIFICATION, contact the LOAN MODIFICATION experts at AdjustMyLoan.com.
CLICK ON THE VIDEO TO SEE ADJUSTMYLOAN.COM ON THE NEWS TALKING ABOUT THIS TOPIC!
ADJUSTMYLOAN.COM EXPLAINS THE IMPORTANCE OF A WELL WRITTEN LOAN MODIFICATION HARDSHIP LETTER!
When requesting a Loan Modification from your lender(s) be prepared to create a loan modification hardship letter explaining your circumstances. This explanation is one of the most important parts of a loan modification proposal and is one of the first things your lender looks at. You only have one shot at convincing the bank that your situation warrants a loan modification so take time when creating your hardship letter. Have your Loan Modification Hardship Letter clear and to the point. No more than 1-2 pages, and handwritten is best. Tell them what was causing you to struggle, what you are doing or did to overcome the problem, and exactly what you want them to do for you. Below are two examples of Loan Modification Hardship Letters that should help you get an idea of what most banks are looking for:
Loan Modification Hardship Letter #1
August 10th, 20__
Regarding
Borrower: John and Rebecca Smith
Subject Property: 555 N. Baseline Rd. Mesa, Arizona 85202
1st TD With Countrywide Loan Number: ##########
2nd TD With National City Mortgage Loan Number: ##########
Dear Lender / Servicer:
I am writing this letter to explain our family’s unfortunate situation that has caused us to become delinquent on our mortgage. We have tried everything in our power to keep current on our payments but unfortunately since our interest rate adjusted, we have fallen behind and would like you to consider working with us to reduce our monthly payments.
The main reasons that caused us to become late are a decrease in our income, increase in our monthly obligations, current market conditions, our adjustable rate mortgage, and our inability to refinance.
I work as a waitress and my husband works at a marketing manager for a local screen printing company. Most of my income has been generated by tips and has decreased dramatically due to the unfortunate economic situation. My husband job is secure and he has been with the same company for 2 years. We have a 3 year old son and cannot afford daycare in order to get a second job.
For the past several months we have been cutting back on our misc. expenses. We no longer have premium cable, go on vacations, or eat out. Our credit cards are getting maxed out due to us paying our mortgage on them and can no longer keep that up. We have currently missed 2 payments and wish to work out a payment plan with you after you reduce our rates to something we can afford.
My husband and I consulted mortgage professionals regarding a refinance but due to our lack of equity, the falling home prices in our community, and our lack of assets we were denied.
I have no other choice but to ask you to please consider my request for a loan modification. My family and I would really be grateful if you can help us work out a payment schedule we could afford. We do not want to lose our home. We wish to continue making mortgage payments on time for the remainder of our loan.
Sincerely and Respectfully,
Rebbecca Smith
Loan Modification Hardship Letter #2
Date
Lender name
Lender address
Attn: Loss Mitigation Department
RE: Borrower name, Loan number
To Whom It May Concern:
We are writing to you to explain our current financial situation that has caused us to default on our loan agreement. We don’t want to lose our home and will anything we can to work with you to remedy the situation and find a solution that will benefit us both. We first became delinquent on our mortgage payments due to [INSERT YOUR REASON HERE BRIEFLY]. We’ve tried to bring the account current, but haven’t been able to catch up by paying the full amount due. The trouble started approximately [INSERT DATE HERE] and we believe that this is a [TEMPORARY or PERMANENT] hardship.
We are now in a better position and would like to work out a plan to begin making payments again and stay in our home. We are hard working, responsible individuals willing to work to keep our home. We would appreciate it if you would consider a modification to our existing loan terms in order to lower the monthly payment and include some or all of the past due amount. We’ve created and implemented a new budget for our family and we are confident that we would be able to meet the new, lower monthly payment every month without fail. We’d appreciate any help or suggestions you could give to us regarding this matter. It’s an extremely difficult time for our family and we’d really like to get the issue resolved as soon as possible.
We hope these examples help you create a well written Loan Modification Hardship Letter that gets you the loan modification you deserve. If you need help with your Loan Modification, AdjustMyLoan.com is a national Loan Modification Company based out of Phoenix, Arizona that can help you audit, package, propose, and negotiatiate a Loan Modification on your behalf. Visit our website www.AdjustMyLoan.com or call our toll free phone number 1-800-557-7573 today.
Negotiating 101 – Tips For Negotiating Your Own Loan Modification!Dealing With Objection
This section is dedicated to the psychology of negotiating LOAN MODIFICATIONS. In most instances, when you first call your lender, they will be helpful…then something happens! They switch from customer service role, to debt collector role and things become interesting. Obviously the main key is to always stay calm and remember that they did not put you in this position. Also remember that they are overwhelmed with cases, get yelled at all day long, and do not get paid very much money. Below are some tips and tricks that we have found useful when dealing with loss mitigation.
Building Trust, Rapport, And Satisfaction
If you are entering into a negotiation, you will be in a much stronger position if you can convince the other side of your qualifications. This is why we spend so much time doing our research with the INCOME / EXPENSE WORKSHEET and running COMPS. Your first priority is to convince the decision makers that you can do what you propose. The whole point of this is to build trust! Next, spend some time building a rapport with the negotiator. Ask about where they are located, how busy they must be, ask them about their background and experience, even talk about your family. The more of a real person they view you as, and greater the chances they will go to bat for you when you need them to. Lastly, get ready for some flexibility. You don’t want to be thought of as a deal breaker, but a deal maker who understands that you must create a mutually beneficial relationship that both you and the bank are okay with!
Dumb Is Smart
Remember, things are not always what they seem! Sometimes it is a good idea to play “dumb” to gain more information from the other side that they might not volunteer if you are a Mr. Know-It-All! Listening is the key to this concept, so even if you have a razor sharp mind, play “dumb” and gain the strategic advantage.
You Have Got To Do Better Than That
If in your negotiation you reach a gap that you are not sure how to bridge, a simple statement “you have got to do better than that” can work wonders. The point of this is to get them to the point where they say “this is the best that we can do for you”. This does not cost you anything and is a good way to push the envelope without causing a fight.
Take It Or Leave It
If your lender tells you that this is the deal “take it or leave it”, you do have some options. Obviously, you could take or leave the deal depending on your situation. Before you do, first try and change the parameters of the discussion by offering an agreement with an alternative. Let’s say you are trying to get a 3 month forbearance, a principal balance reduction of $50,000, and an interest rate adjustment from 7% to 6%, and they say we will reduce your interest rate and that is it…”take it or leave it”. A good response could be “okay, I might accept the lower interest rate if you can give me a 6 month forbearance on my payments to help me cover the lost benefits of the principal balance reduction.” Now you have taken back control and changed the pace of the negotiation.
The Two Dreaded Personalities
1. Mr. Intimidator
Here is a quick story. We were once negotiating a short sale with a loss mitigator from one of the nation’s largest banks. We sent in the short sale packet and made our initial phone call. The loss mitigator claimed that she never received the packet and asked us what the offer was for. We told her and she immediately yelled “this is an insult….do not call me back until you have a higher offer” and then hung up. She did not even see the paperwork, the statistics, or the offer yet! We knew instantly we were dealing with a Mrs. Intimidator. We tried calling back and every time she would not even let us speak more than a few sentences and then she would cut us off and say “I told you to get me a higher offer…you are wasting my time so don’t call me back again until you get something higher.” This posed a huge problem because the offer was actually a really good offer…she was in Ohio and we were in Arizona, so she had no Idea what market values were or were doing (declining). Everytime we called her we stayed calm even when she yelled at us.Finally, we called back about 2 weeks later and as fast as we could talk (before she hung up on us), we told her how hard we were working, everything we could about the family losing their house, how market values had declined, regurgitated market statistics such as foreclosure rates and short sales in the neighborhood, and told her that if she does not take a second look at the numbers we were going to let the house foreclose. She said she did not care and hung up. We waited and the next day she called us back and apologized for her attitude. She claimed she thought long and hard about this family’s situation and from that point on was our best friend. Literally overnight the whole tone and pace of the negotiation changed for the better. We had the auction postponed, got an acceptance for our short sale, and completed the transaction. She realized that bullying us around was not the answer and changed up her strategy!
2. Mr. Know‐It‐All
This is the most difficult personality type to deal with. These are the people that you cannot tell anything to. They can be in another country and claim to know exactly what is happening here in Arizona. They have done this a thousand times and you are just another file they have to get finished before the end of the day! Flattery with the know-it-all can get you anywhere you want to go. Once the know-it-all is convinced of their superiority, their guard goes down. The key here is to give minimal information and many “you know” statements. For example, say something like, “with the declining housing market and my loss of all my equity, I cannot afford my new interest rate. You know what is typical since you have done this a thousand times. Let me send you a proposal that you are familiar with and we can use that.” Also, do not challenge them directly, this will only infuriate them. Instead stroke their ego!
Last Piece Of Advice
If you come to a standstill with your assigned home retention mitigator, you can always attempt to move it up the chain of command and speak with their supervisor. In most cases, your negotiator will not volunteer their contact info so you may have to call customer service and ask for the manager of _____________ (your negotiator). It may be a good idea to ask for the name of your negotiator’s manager’s phone number on your initial contact for your file.
CONTACT ADJUSTMYLOAN.COM IF YOU GET STUCK
If you still stuck, AdjustMyLoan.com is a national LOAN MODIFICATION COMPANY based out of Phoenix, Arizona. The Loss Mitigation Experts, professional LOAN MODIFICATION NEGOTIATORS, and affiliated Forensic Loan Auditing Attorney’s at AdjustMyLoan.com are always here to help if you get to a point where you cannot handle the LOAN MODIFICATION yourself. We have years of loss mitigation experience and can help you audit, package, propose, and negotiate your LOAN MODIFICATION. We are also a member of the Better Business Bureau, have a log-in system so you can see your LOAN MODIFICATIONS progress, charge NO UPFRONT FEE’S, have a MONEY BACK GUARANTEE, and have many happy client referrals for you to review. We understand that the hardest part for a homeowner to do is remove all emotions fromt he negotiation. If you need us, just give us a call at 1-800-557-7573 and WE CAN STEP IN AND GET THE JOB DONE!
