We are in the midst of one of the worst mortgage and real estate markets in years. No one really knows what’s going to happen and the exact implications of the wild wild west subprime lending that went on over the last several years. All anyone knows is that it’s going to be bad. Real bad.
We have a system where there is no uniformity. One lender may be doing this while another lenders is doing that. One may be offering loan workouts with troubled borrowers while the other says pay up or shut up.
Lenders and servicers have systems set in place for loss mitigation but in no way are they set up for the big mess and volume of cases that they are handling. They are caught between a rock and a hard place. They’re stuck with their loyalty to their investors and calls from troubled borrowers that are trying to avoid foreclosure and save their home.
Then you have poorly trained collection department employees who could really care less if you end up homeless. Loss mitigation departments that are inundated with thousands of cases and not enough people to handle them. Leaving borrowers who need help, to throw their hands in the air and just walk away from the mess and frustration of dealing with their bank.
On May 2nd, Senator Chris Dodd convened a “homeowner preservation summit” and invited key mortgage industry players. The Senator proposed a “Statement of principles” that urges lenders to use loan modifications to help defaulted borrowers. You can read the text version here.
Lenders such as Countrywide, HSBC, Citigroup, Fannie Mae, Freddie Mac, JP Morgan Chase, Litton Loan Servicing, Wells Fargo and the Mortgage Banker Association agreed to the Statement of principles just 2 days later after Senator Dodd’s announcement.
Hopefully they will put the necessary money into making these departments more efficient like they did in marketing these subprime loans to their borrowers. My guess is that the system needs the government to step in and make them stream line their systems, place more money and training into them to make them accountable and to treat people that are in dire straights with respect.
If anyone has worked with collections and loss mitigation, they know that these are some of the rudest and most unhelpful people in the business world. I understand it is a stressful job dealing with clients who are pissed off and need help. But that’s the job you signed up for, so deal with people with respect or get out of the business.
Lenders please get rid of these rude people because they are doing more harm then good.
I plan to record these phone calls so people can see what you are up against and also to let the lenders know what really goes on with their rude employees that are costing them dearly.
Good luck in getting a loan modification because you’ll need it!
{ 11 comments… read them below or add one }
Plz. help. I have a client who wants to sell her home. She has a 1st and 2nd with country wide. This home is a rental home, she is not late on any payments. However this may not be the case once the lease is up in a few months. her combined interest rate is about 20%. She has a negative cash flow because she has to make the difference of payment from her pocket. She wants to list the property with me. The CMA doesn’t support what she needs to sell the property for. I was told I can’t call and ask countrywide for a discount value. If I did this now this would be treated as a short sale. She would not qualify because she is not behind in payments. Is it possible I can ask for a loan modification. list her house as owner financing to get cash she needs.
Plz. help. I have a client who wants to sell her home. She has a 1st and 2nd with country wide. This home is a rental home, she is not late on any payments. However this may not be the case once the lease is up in a few months. her combined interest rate is about 20%. She has a negative cash flow because she has to make the difference of payment from her pocket. She wants to list the property with me. The CMA doesn’t support what she needs to sell the property for. I was told I can’t call and ask countrywide for a discount value. If I did this now this would be treated as a short sale. She would not qualify because she is not behind in payments. Is it possible I can ask for a loan modification. list her house as owner financing to get cash she needs.
Hi Shirl!
This would be considered a short sale and most lenders will not consider any type of negotiations until she is late. Short sales and loan modifications are used as part of the loss mitigation process. Right now they would see no reason why they would need to work with someone who “on paper” is fine.
You could sell the property and she can remain on title. This is non as a “Wrap Around Mortgage”. However, if the lender finds out then they can call the loan due.
Your client needs to understand that if she is upside down then there is no cash in the property. She has no equity to tap and she is not in a good position to do anything to be honest.
Good Luck!
Hi,
I want to thank you for sharing this information with us. My ARM kicks in next month and no one will refinance me. As I type this, I’m on the phone (on hold) with Country Wide’s workout department. I will try to apply the tips you’ve provided when dealing with the loan negotiators. Thank you again for caring about people like me in this horrible situation.
Hi Catherine!
I’m glad to be of service to you. I wish you the best and please come back and let us know what happened.
Regards,
Moe
Hello Oscar,
I am in your exact same situation with HSBC. I have been trying to contact them only to get the run-around and have been unsuccessful with trying to reach a live representative to discuss my situation and to try negotiate a solution. Please let me know if you have had any luck with HSBC and what your outcome has been with trying to work a loan modification w/them. Thank you.
Steve
Thanks for stopping by Steve and letting us know your story!
You definitely need thick skin and patience to deal with HSBC’s loss mitigation department. You need to get a live person on the phone and be as nica as possible.
And tell them your situation and ask them if you can at least apply for a loan modification and that you want to work with them. They “HAVE TO” forward you a loan workout package at the very least.
Remember to get names, employees id’s etc. and keep very detailed notes.
Best of Luck to You Steve!
I received a call from AMC’s Home Retention program. How do I go about handling them when I call them back on Monday? I want to make sure that I can qualify for a loan modification and that they will find it beneficial to allow me to modify the loan instead of foreclosing on my home.
Hi Moe-
I thought I was alone is this mortgage battle, our mortage payments have went from 800.00 to 1100.00 we cannot afford that type of mortgage, I tried to work out payment arrangements with AMC but they will not work anything out with me! I found your site and I am learning about Loan Modifications……… this information could not have came at a better time! Kelly
Great! I’m glad you found it and I hope it helps you. Please be sure to check out my forum also at http://www.LoanSafe.org I wish you the best and let me know if you need any advice or help!
I own 4 rental properties in Akron, OH all with CITI. My tenants have stopped paying there rents and I can not pay the payments without them paying me. All tenants have had some type of hardship and have just started paying rents. CITI now says that they will not accept a monthly payment unless I pay all payments due. I have had them listed with a Realtor for 4 months now and cant get an offer on any of them. I have worked out a verbal short sail agreement with CITI. What can I do before they go into foreclosure and how can I protect my personal property from being affected with this entire mess.. Please help with some advice of how to deal with the bank….Please email me with any help you may have.