Posts Tagged ‘Mortgage modification’

Don’t Miss a House Payment in Hopes of Getting a Loan Modification

In Uncategorized on August 6, 2012 at 11:28 pm
As this housing and foreclosure crisis drags on, I know that a lot of people are desperate to get help with their mortgage. Of course there are assistance programs out there that lower people’s mortgage payments, such as the government’s Making Home Affordable loan modification program, but who gets accepted into them is a decision made on a case by case basis by each mortgage company. One policy that some mortgage companies have, or they tell people they have, is that they only modify loans that are past due. And I know that a lot of times mortgage company employees will instruct a homeowner to miss a payment or three so they can be eligible to get help.
For a lot of people, the possibility of a lower house payment can be a big temptation to intentionally fall behind on their mortgage even if there is money to make the payment.
Don’t do it.
For example, I spoke to a man named Rich who was told exactly this by his mortgage company. So, Rich did what the person at his mortgage company told him to do. He stopped paying his mortgage for three months, then he called and told them he’d like to have his loan modification now. You know what happened? He didn’t get a loan modification. His house went into foreclosure.
Rich was irate when he called me up.
“I just did what they told me I had to do if I wanted a lower payment,” he said. “Then they put me in foreclosure for it? What the hell kind of scam is this they’re running?”
You would not believe how often I encounter this. It’s incredibly common. When a client asks me if they should stop paying their mortgage in the hopes of qualifying for assistance, I always give the same answer: “Not if you want to keep your house.”
There is nothing in the government’s housing program that says borrowers must be behind on payments to be eligible for the program. And yet I’ve heard employees at mortgage companies say to my clients that that is the case. I don’t know why they tell people this. Maybe they’re misinformed. Maybe they’re crazy.
But if you’re somebody like Rich who was told by their mortgage company to skip a payment in order to get help, don’t do it.
Not if you want to keep your house.

Looking for a Loan Modification? Don’t Sweat the Numbers

In Uncategorized on July 19, 2012 at 9:26 pm

Every day I speak to homeowners who are applying to their mortgage company for a loan modification in order to reduce their mortgage payment. And many of them are losing sleep over something that may not even play that big a role in whether they get the modification–their budget numbers.
As part of the application process for a loan modification, mortgage companies require the applicant to submit a list of their income and their various expenses. I’m talking to a lot of people who are driving themselves crazy worrying about what they think these mortgage companies expect their income and expense numbers to look like.
People ask me all the time, “Is my income too high?” and “Am I spending too much on this or that expense?”
They get all wrapped up in worrying that their budget numbers they submit will disqualify them from getting the loan modification they are so desperate for. And I tell them the same thing: Don’t worry about it.
A person’s income and expenses are only one small factor that a mortgage company considers when reviewing applicants for assistance. There are a million other things they look at. For example, the mortgage company will also consider the type of mortgage it is, the value of the property, and the applicant’s credit history. Another factor is the amount of money the government will give them for putting someone in the Treasury Department’s Making Home Affordable program. And of course whenever real estate is concerned, location location, location plays a big role.
And remember, the mortgage company just services the mortgage. That’s why they’re called mortgage servicers. They’re just debt collectors who must follow the policies set by the investor who is actually owed the mortgage debt and who pays the mortgage company for their work. These investors all have different policies concerning who they want to give modifications too. And you usually don’t know who the investor is, much less what their policies are.
But here’s the biggest factor by far that determines who gets a loan modification: That is whether the mortgage company believes they’ll make more money if they modify the loan. If they think they’ll make more money modifying the loan, they do it. If not, they don’t. It’s that simple.
I don’t know why people worry so much about the budget numbers they submit. I guess it’s because it’s one of the few things in the application process they do have control over.
I’ve talked to people who were perfect candidates to have their payment reduced but got turned away. And I’ve talked to people who couldn’t afford their house with 10 loan modifications, yet they were approved. I’ve detailed a few these situations in the following page:’s-75-billion-housing-program-and-why-it’s-not-working/
Take a read, and do yourself a favor and try not to guess what some faceless analyst thinks of how much you spend on toilet paper.

Homeowner Convinced her Mortgage Company using Secret Phone Technology to Avoid her

In Housing Horror Stories on June 18, 2012 at 10:59 pm

In my line of work counseling homeowners who are trying to get help from their mortgage companies, I hear a lot of crazy stories from people who believe their mortgage company intentionally jerks them around–losing documents, giving them wrong information, things like that. I mean, some of what people tell me borders on conspiracy theory type of stuff. It’s nuts.
My personal favorite is how the fax machines at mortgage companies never work. You wouldn’t believe how often I hear a mortgage company employee tell their customer to resend documents because the fax machine was on the fritz. The people who work at the mortgage companies must beat the hell out of their fax machines.
I thought I’d heard it all. But recently a client of mine named Janice told me a new one. Janice told me how a specific person at her mortgage company was assigned to handle her loan modification application, and nobody else at the mortgage company was allowed to speak to her about her situation. The problem was, this particular employee could never be reached and rarely returned Janice’s phone calls. Now this is another one I hear all the time. But her story got weird when Janice told me that whenever her file manager did call her, her phone wouldn’t ring. She would simply find a voicemail from the person.
“It happens all the time,” she told me. “I’m convinced they’ve got some technology that allows them to make a call and have it go right to your voicemail.”
My obvious question to her was, Isn’t it possible you were away from your phone or on the other line when the file manager called?
No, it wasn’t, Janice said.
“This has happened a lot. It just happened again yesterday,” she said. “I was home all day. There were no messages, then at some point I noticed the light on the phone flashing which means I have a message. I played it and sure enough, it was from the file manager.”
I asked her, Isn’t it possible you were talking on the phone when they called?
“I have call waiting,” Janice said. “Why does my call waiting work for everyone else? Why does my phone ring for everyone else except my mortgage company?”

Beware Loan Modification Scams

In Uncategorized on June 14, 2012 at 11:32 pm



In case you’ve been living on Jupiter for the past four years, a lot of people in America have been losing their homes to foreclosure. And the government has trotted out a bunch of programs to help people save their home. If you’ve read much of this blog of mine, you know that a lot of the stories I write about are the nightmares that people go through trying to qualify for these government programs.
Well, a whole cottage industry of scams has sprung up because of this foreclosure mess. A whole array of degenerate con artists is out there preying on people desperate to get accepted into the government’s housing assistance programs. And I talk to people all the time who’ve handed over their hard-earned money to these creeps who make people believe that they can make that happen.
So, if you have applied for a mortgage-assistance program through your mortgage company, or if  you’re thinking about doing so, please, for the love of God, remember this one thing: Nobody can influence the mortgage company’s decision about whether or not to help you, no matter how much you pay them.
Now let me give a run down on how these scams work. A lot of them are operated by lawyers and law firms. Big surprise there, right? Others are operated by “loan modification companies,” or “loan modification experts.” Here’s their basic hook: They tell people that because they are lawyers, or because they are experts, they can negotiate with the mortgage company. Sometimes they’ll promise to get a house payment lowered, or sometimes they’ll just say, “Hey, you know you can’t afford your mortgage, so what have you got to lose by hiring us?”
I’ll tell you what the homeowner loses every time–the hundreds or the thousands of dollars these bums charge.
See, here’s why these lawyers and experts can’t help. The mortgage company works for the entity that owns the mortgage. That entity is called the mortgage investor. The mortgage debt is owed to the investor, and it’s the investor who tells the mortgage company the criteria for putting homeowners into these housing programs. The mortgage company doesn’t just pick people’s names out of a hat like they’re raffling off Christmas turkeys. I mean, we’re talking about hundreds of thousands of dollars at stake here.
But because the application process to get help can be such a nightmare, many homeowners feel powerless and desperate. And it’s that desperation the con artists prey on. A lot of these vultures will run very legitimate-looking advertisements. Still others solicit to homeowners directly. However you might run across them, just remember, if all it takes to save your house is a few hundred or a few thousand bucks, then why are the foreclosure rates the highest they’ve been since the Great Depression?

Bank of America Hounds Couple to Accept a Loan Modification

In Uncategorized on November 28, 2010 at 11:57 pm

While Hundreds of Thousands have been Denied a Loan Modification, this Couple was Practically Begged to take One

  On any given day, a person can find stories in the news about homeowners who beg and plead with their mortgage company for inclusion in the government’s Making Home Affordable loan modification program. Loan modifications have become so sought after that a whole criminal industry has sprung up, where con artists promise homeowners to get their mortgages modified for an upfront fee. (The Federal Trade Commission recently made it a crime to do this.)
  But a woman who recently called our agency told me that she spent the entire summer fielding calls from her mortgage company, Bank of America, repeatedly offering to modify her loan through the MHA program.
  “They would call all the time and offer the modification to us,” said the client, Sandy. “I talked to supervisors and told them to quit calling. And it still didn’t stop. It was torture. It was three times a week at least. They’d call me and my husband. It went on for 6 months.”
  What happened was Sandy had lost her job in December 2009, and by spring they were two months behind on their house payment. Sandy had called the mortgage company to let them know they would be having problems. When they did, Bank of America had them apply for a MHA loan modification (as they do with most borrowers who call with problems). After two months, which is very short for most applications, they were notified the modification was approved.
  But Sandy turned it down because it would have only reduced the payment by $30 per month, no where close to let them afford the house. Luckily Sandy found another job, and they borrowed money from their family to bring the mortgage current. But Bank of America wouldn’t take no for an answer, and spent the next six months hounding these people.
  Adding another layer of weirdness to story, Sandy told me that in June, Bank of America didn’t credit their account for that month’s payment even though the money for the house payment indeed left her account.
  “When I called to ask why they didn’t credit the payment, they told me it was because they wanted to give us the loan modification. So they basically kept the money from the payment in limbo.”
  According to most statistics available, of those who apply for a loan modification, more than half are denied.

With Chase Bank, there’s the truth, and then there’s the truth

In Housing Horror Stories on September 21, 2010 at 12:23 am

  Today I got into an argument with a customer service rep at Chase Bank. I’m usually a pretty cool-headed guy, but I hate to hear people lie. And it also aggravates me when people don’t know their job. I was on the phone with Chase because one of their borrowers called us for advice on what to do since Chase had denied her request for a Making Home Affordable loan modification after her work hours were cut drastically, leaving her unable to make her house payment. Chase’s policy is that they will not modify loans where the borrower has equity in the home. And that’s what happened with the homeowner who was calling us for advice. Unfortunately, Chase sometimes tells their borrowers that it’s the MHA program that carries this stipulation.
  “Chase said the government program is only for people who owe more than their home is worth,” she said.
  “They told you what?” I demanded.
  So we called Chase to find out why this woman was told such a blatant untruth.
  “Yes sir,” said the customer service rep. “The Obama program doesn’t allow loan modifications if there is equity in the home.”
  “No, the government program does not say that,” I said. “Nothing in the MHA guidelines says you can’t get a loan modification if you have equity. That’s Chase’s policy. I’ve dealt with this issue before with your company. Please tell this woman that Chase just doesn’t modify loans if there is equity in the house. ”
  I went around in circles for a while with the rep, and finally I told her to either put a manager on the phone, or to tell a manager what I was saying and to come back to us with an answer.
  She came back after leaving us on hold for a couple minutes.
  “I’m sorry sir, you’re correct. It is a policy of Chase that we only modify loans when the borrower is underwater.”
  “Thank you for admitting that,” I said. And I hung up.
  I got the homeowner to hear the truth, but I still had to tell her she should put her house up for sale if she can’t get a second job.
  So if you’re a Chase borrower trying for a loan modification, and your house is worth more than you owe, forget about it.