Loan Modifications, (adjustments in interest, principal, interest only etc) option.
We will be offering help here from research and our personal experience as we gain it in working with the authors five lenders, on similar rental property loans, your evaluating your modification offers you receive, further negotiating when necessary and proceeding only with what might work.
Loan Modification is Crucial to have any hope or reason to stay with an underwater mortgage. It likely is to your advantage to walkaway from an underwater mortgage, so it is not you that needs to be doing the selling job necessarily in getting the lender to "modify" the loan to where it is to your interest to stay with continiuing reduced payments. on a reduced interest and even a reduced principal. To get you to stay with the mortgage they need to make some concessions, but that is not the way it is going apparently. They are using the "keep paying pressure" and threat that your credit will be ruined if you do not fulfill the contract etc. You have to not be buffaloed by this threat. You think you need some rep to pressure the lender, that really knows what he is doing, keep in mind, even the government agencies with money and full time negotiators on the publics behalf, are NOT succeeding. It is not happening, even on the government sponsored backed modification reductions. The latest figures on the government underwritten modifications, only 12% of those have applied have recieved modifications. Thru Feb. 1. out of 4.5 million homes under water, 66,000 got some type of modification. My checking "Investors" underwater getting mods...so far found ZERO. Read my article on "who has the problem" go here, and then see if you might be in a postion to deal better with "hope of loan modification" as the only hope. All these people offering "you the paniced home owner" taking your money from $300 to thousands to give you advice or act on your behalf are just taking your money. Unless you have an agreement, in writing with them, no modification obtained that we can live with, no fee. If they will not make that arrangement, then they are likely are just taking your money for holding your hand, (and/or just taking your money well knowing there is little they or you can do to change the current statistics.
Suggest asking for names of 3 people they have gotten modifications for that you can call.
You will want to go thru the motions at least, to give them the option of working something out you can live with, and you will also want to stay with this procedure, because while this is going on in good faith no foreclosure papers are being filed.
Once filed, however, the timing starts to run. The longer it takes the longer you can stay in or rent the home before it reverts to the lender.
Once foreclosure papers filed, those who have gone thru this say, absolutely make no payments to collections or any department other then loan mediation officials, who will tell you they will grant a delay if you just send in a payment or two.
If plan to send or buy any delay in foreclosure with partial payments of any kind, be sure and absolutely get any delay you are buying in writing and ONLY from the loan mediation official. NO ONE ELSE.
Any payments to collections or any one else during this period, no matter what they promise, are just "donations" to the bank.
Deal Only With The Loan Mediation Authority of the Mortgage holder, (not the loan servicing company.)
My experience is the collection department agency etc will use all sorts of names to get you to think you are dealing with the right people, "just send us a payment"and we will do this and this. They have NO POWER to do anything. One of the "come on" names they will use is, you are speaking to the "home retention" department. These collection people, their career is ranked by how good they are at getting people to send in payments, and what ever pretense they use, you are fair game. My experience ( with 9 mortgages refusing payment until some modification) I get many calls a day, and my obeservation is over half are actually in India. They probably have meetings every day on what they need to say or promise to get you to send a payment. What line or promise is "working best today" to get or scare people to send in a "payment".
Sit on the money....Hold Your cards. The bigger the stack, the more cards you have to deal with the loan mediation department.
We will list here tips on steps to take in preparing for the loan modification request process:
- How to take stock of your situation on loans,
- How to determine what help you qualify for
- Tips to evaluate your options
- How to find help from the right people.
You will need to learn to correctly submit a successful application;
- Best ways to contact your lender,
- How to gather the key documents they will require,
- How to assess and communicate your need for modification
- How to prepare that effective hardship letter, that all will require.
You will need the courage to deal with uncooperative lenders, you will need to be informed and know your legal rights, and uncover what is going to be necessary to get a satisfactory modification to happen.
You may need support and be able to contact your lenders leadership, perhaps a consumer support agency, a federal agency, get state agency help and when unfair or illegal practices encountered even your states attorney general.
Leave no rock unturned.
The public and time are also on your side.
Remember, many modifications they do approve do not work out and the owner does not come thru as planned. The lenders fear they may be merely back hassling it over again in a few months. You need to have something that is realistic and that you can assure them you can fulfill.
You might consider asking for somewhat a rather severe adjustment, (for them but you are sure you can handle) but limited to a two year period, this buys you both time, and the situation and market may be turned around by then for both you and the lender.
Disclaimer:
Author is a long time reporter publisher, but has no real estate or tax expertise or qualifications, is a real estate investor with 14 homes, six underwater. and many with 7% loans, and running a deficiency of $5,000 per month in the rental home business. Supplying a forum where fellow investors hung out to dry can discuss options. Reporting here is research and from seeking legal council on personal situation in Arizona.(See Continued Disclaimer Bottom of Page.)
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