Time for another correction of the half-accurate information about mortgage modifications typically posted on the internet. I’ll correct ‘em here and the reader can follow the link if they choose.
Innocently enough the article spotlights a couple that was so far buried in their home mortgage that getting a mortgage modification would not be advised. The Home Affordable Mortgage Plan, or HAMP, was designed for ‘under-employed’ distressed mortgage holders. This couple is and was; but given the severe loss of value in their home, mortgage modification would be a waste of their financial well-being. A drop of $100,000 in value strongly indicates the justification for a short sale. Go get another one. Leave the emotional homestead behind. You wre looking for a home when you found this one.
One other option that has surfaced recently is a Principal Reduction Refinance. This involves another lender negotiating ‘short sale’ buyout and deficiency negation. The loan has no credit score requirements and carries a higher interest rate, but if the payments are affordable, it gives the opportunity to hold the house and refinance again in a few years after credit scores have recovered.
The couple spent their savings trying to keep their mortgage afloat. I wish I could have talked to them. Bad idea. The distressed mortgage holder needs to separate life’s savings, mortgage equity (or lack of it) and consumer credit. Properties that have lost significant value are like busses with flat tires; go get another one.
The problem with this couple, as with so many others that have been featured in the press since this mortgage modification mess started, have a conscience. Your bank doesn’t have a conscience. You can’t afford one, because they will take every dime you want to pay in ‘blood money’ and then kick you to the curb. They did not give you a mortgage because they liked you.
The second couple failed when the bank mistakenly re-evaluated their new income when the husband went back to work. This is not allowed under the HAMP mortgage modification guidelines; but if you reveal more information than you are required to, the bank will use it against you. Kinda like the Falahi’s and White House State dinners, huh?
This is where the bank’s uses the ersatz ‘trial modification’ against the hapless homeowner – not knowing all the rules. If these couples had mailed their documents certified mail, return receipt requested, like I recommend, these stories wouldn’t have happened.
The housing counselor mistakenly states that 20 percent of mortgage modifications have become permanent. No, the figure is one to three percent, depending on who is counting.
Trial modifications were conjured up by the US Treasury for the Home Affordable Mortgage Plan, or HAMP, as one more opportunity for the distressed homeowner to fail and lose their home. The bank gets another opportunity to lose your homework and deny a perfectly justified mortgage modification.
We now know from anecdotal evidence that Loss Mitigation offices are losing files on purpose. With a certified mail, return receipt requested, the distressed homeowner can prevent that. They’re just waiting to point the finger at the system and say, “See? It’s their fault.” Just like the elementary school playground.
The FHA has lifted the requirement that a distressed homeowner demonstrate ‘imminent default’ by being 60 days delinquent on mortgage payments. I’m guessing this article was written before that change and they didn’t know. But now you do. One of the problems with HAMP has been allowing the banks to define ‘imminent default.’
No, Mark Zandi, distressed homeowners don’t default because of severe loss of property value (unless they woke up and smelled the coffee), they default because of mortgage servicers delight in knowing they make more money on a foreclosure than a permanent mortgage modification. So, take all the money available from the distressed homeowner and when that’s gone, foreclose on ‘em.
Pay attention to this quote by Rick Sharga: he also cited another problem with HAMP: that it is a voluntary program on the part of banks and was not designed in a way “that would be successful on securitized loans. In order to get to the payment levels indicated by the program, servicers would have been outside the parameters they were contractually bound to adhere to.”
This points out the abject necessity to get the REST Report. The REST Report calculates the invaluable Net Present Value, or NPV. This calculation tells everyone; loan servicer, homeowner, and foreclosure judge, what is the most expedient solution to a non-performing mortgage: mortgage modification or short sale. It is proving to be a spectacular tool in foreclosure defense.
The third personal example in this article is yet another example of banks negligence and lack of good faith in negotiating mortgage modifications or short sales.
Since this past summer, there is no reason to pay a third party to negotiate your mortgage modification. They can’t do anything you can’t do yourself. Increasingly, judges are recognizing the iron-clad conclusion of the REST Report and holding lender/servicers accountable.
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The internet being what it is, certain search terms need to be empahasized so that you can find the best information. The REST Report is best classified as loan modification software, or mortgage modification software. It’s claim to fame is that you use it to calculate Net Present Value exactly the way the banks do, using the same software. It is best used as a do it yourself loan modification or do it yourself mortgage modification. loan modification and short sale are beneficial foreclosure alternatives that benefit both homeowner and mortgage investor and make the mortgage servicer do the loan modification process in good faith. They must comply with the mortgage relief act in the mortgage loss mitigation process. I have offered loan modification services for three years. Our loan modification success is 4000 successes out of 4000 submissions. I’ll be happy to send a loan modification example in the form of a sample REST Report. I also have a proven loan modification hardship letter developed over three years of practice.
This YouTube video says it all. Go here: How to Get A Beneficial Loan Modification Now Please ‘Like’ the video, will you? That makes it easier for others to find.
Read it here
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Originally posted 2010-01-25 04:52:57. Republished by Blog Post Promoter
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More corrections on misconceptions about Loan Modifications – http://t.co/9dnymlpg