Loan Modifications
Unless you have been living under a rock for the last 4 months you can’t help but notice the mortgage problem. I know there are a multitude of reasons for the housing crisis but that isn’t why I put this article together.
Six thousand residents in my local area were laid off in January. Many of my friends and family members are struggling and of course during any conversation it always leads to how do I stay in my home without a job? Being the adventurous type, I decided to see what was going on in the loan modification segment. I pulled down a couple of articles and unfortunately, I am not surprised at what I found.
Treasury did launch a new web site http://www.makinghomeaffordable.gov as a clearinghouse. Hey, hey a new government web site. Considering they passed the bill in a week do you think they could have spent some time to figure out how to get the money to the people?
Two women in California really worked the system. Consumer Affairs, reported that California authorities …”announced the arrest of two scam artists – Mary Alice Yraceburu and Marianne Curtis – who “coldly and heartlessly” conned over one hundred and sixty victims out of thousands of dollars for non-existent loan modification services.”
Evidently these two women operated a company called Foreclosure Freedom. They sent fliers to Californians promising help in stopping the foreclosure of their homes. According to Consumer Affairs .com the fliers read: “FINAL NOTICE – Respond only to this notice immediately.” This is similar to another scam, the Attorney General stopped late last year.
If you need to modify your mortgage there are some things you need to know. First of all this is a booming market for legitimate and not so legitimate people so watch out. Loan modification companies are mediators between you and the lender. There are fees associated and who pays depends on who initiated the action. If you engage a loan modification firm, you will more likely be the one who pays the fees sometimes up to $3,000 UP FRONT. There are no guarantees so be careful. If your loan modification company is asking for money up front, STAND UP, TURN AROUND AND WALK OUT THE DOOR. Legitimate companies know they cannot guarantee success and will usually ask for a percentage after the deal is complete.
Another approach is to Do It Yourself. DYI mortgage modification will require more time, energy and patience. First things first you need to get some financial documents together. These include and Income and Expense Statement, a Net worth Statement and a Hardship letter that explains your particular situation and hardships.
An Income and Expense statement is just what it says, a list of all income including rental properties, stocks, interest etc. A net worth statement is a listing of all of your assets and liabilities. Let’s be clear on one thing going down this route, BE HONEST in developing these documents and in discussions with the lender. Your hardship letter should identify how you find yourself in this situation, lost your job, had a divorce etc.
When you contact your lender, ask for a direct dial number because you will be engaging them often as the negotiation progresses. When you finally get to the person in the risk mitigation department ask for their full name as you want to accurately document the conversation. At that point you are on your way. You will find a very informative video HERE
