There are a lot of myths surrounding lenders and servicers as to what they will and will not do during the loan modification process.
The confusion and inaccurate data that is propagating the internet and the news is based on ill-informed bloggers or journalists who really have no idea what is going on in the loss mitigation arena. This to me is akin to someone who studies baseball and claims to be an expert, but has never caught a ball or swung a bat in their lives. How can anyone take them seriously? How can these same people be relied on by the media as “experts” when they have never even played the game?
I have written on the subject of loan modifications more than anyone in the world, and I have personally been involved in over 300 loan modifications both online and off. Our homeowner’s forum at LoanSafe.org has provided 138 homeowners with free information that helped them avoid foreclosure.
All my work is fully documented online for the world to see. Please feel free to Google Moe Bedard and take a look at the work I have done or been involved in. I don’t only do the blog talk; I also walk the blog talk.
The facts are that loan workouts and loan modifications are happening in record numbers and it is the educated homeowner that is getting relief on their mortgage and saving their home.
What I wanted to do with this article is to educate homeowners as well as the press with the facts and myths that seem to surround the ever elusive loan modification.
“Loan Modification Myths and Facts”
Myth: Do you have to be late on your mortgage in order to be eligible for a loan modification?
Fact: No, you do not have to be late, but it helps if you are. In other words, you will get more attention and help on your mortgage from your lender or servicer if you’re late.
I have been involved in many modifications where the borrower was not late. However, these instances are rare and require a tough battle to win. Is it impossible? Hell no!
It takes a person with thick skin and an iron will to do this. It’s not unusual for it to take 3-6 months of calls, faxes, emails, letters etc. to get help before you get relief. I have found that the person that is willing to be the greasy wheel and never give up is usually the first person that gets the attention they deserve.
You can view over 100 success stories in my forum of other homeowners who fought their lender or servicer and won. You can also view the thousands of people still fighting in the “Tell Us Your Story Section” of the forum. Their stories are all documented online in their own words for the world to see and learn exactly what homeowners are up against.
IMPORTANT TIP: One of the most effective tools to cut through the toxic mortgage maze is a mortgage audit or forensic loan document review that can help discover legal violations on your loan, which will help you negotiate your mortgage before you are late.
If your lender or servicer is facing a lawsuit based on legal violations on your mortgage, or they can simply avoid litigation by modifying your loan, guess what they will do? 99% of the time they will cave to your demands and give you a sweet and affordable loan modification (one much better than you could have ever imagined or obtained on your own).
If they don’t assist you with a modification and there are legal violations on your loan, please consult with an attorney right away!
I have seen modifications down to as low as a 2% interest rate using the above methods. Yes, WOW!
Myth: Hope Now and 995-HOPE are here to protect your best interests.
Fact: Yes and no.
I say yes and no because they are here to help but they only go one layer deep in their assistance with struggling homeowners while knowing fully well what is in the 2nd layer. So, why don’t they go the extra mile and get into the legal arena on these toxic loans? For instance, why don’t they review every single borrower’s loan documents for legal violations?
The #1 reason is that these two entities are funded by lenders who don’t want you to go into that 2nd layer and get into all that legal stuff that will bury them in lawsuits. They’d also rather not have the last nail put into their coffin by being added to the infamous imploded lenders list over in Aaron Krowne’s blogging world.
Do they “really” have your best interest at heart? I say a BIG FAT NO!
How can they have your best interest at heart when they are taking money from the very same people who put you in the position you’re in now? In other words, do not buy into their hype and propaganda.
If you feel you might be the victim of predatory lending then call a competent mortgage lawyer. Do not call HOPE NOW for help because you will not get help, let alone hope!
Read my articles, Hope Now Reports Record Loan in April, Moe says “It’s Still Not Enough.”, or Do NOT Call 888-995-HOPE for help! Read on to learn why, and Please call 995 Hope if you want to get screwed by your lender, again!
Myth: Lenders and servicers are offering principle reductions on borrowers whose mortgage balances are in the red and owe more than the home is worth.
Fact: Yes, but this is very rare.
This is usually done when a borrower has a 1st and 2nd mortgage and the 2nd is negotiated down and settled for 10-20 cents on the dollar. The first is less likely to offer a reduction in principle unless they are facing litigation and or there are legal violations on the borrower’s loan.
There are many scammers that claim they can do this on a regular basis. Don’t buy into their hype or snake oil because that is all it is.
Think about it. If lenders started writing down mortgage balances to borrowers on a regular basis, then everyone and their mother, brother and sister would know about it and demand the same treatment. They will all be standing in line to have their loan balances whacked in half.
Do you know what that would do to our banking system and the foreclosure crisis? It would crush the remaining banks and the write downs would be gargantuan. The impending flood of litigation initiated by burned investors would engulf Wall Street and drown all the banks in a tsunami second.
I am sure millions of homeowners would just walk from their homes if they didn’t get their principle reduced like the Joneses next door. It’s the old adage, “If you did it for them, then why can’t you do it for me?” Now multiply that by millions and millions of people and you can see why this will not happen anytime soon.
Myth: Lenders and servicers are doing everything they can to assist struggling homeowners.
Fact: That is a crock of crap and total BS!
Please excuse my crap talk, but when I hear BS, I call out the BS talkers at their crap talk game. They are giving the media, our government and the people of this great country nothing but lip service.
They do not have enough man power to help all the wounded homeowners suffering in their mortgage contracts. Tens of thousands of employees have been laid off (the same guys and gals that made these loans), and now all of these millions of loans that these same tens of thousands of people created are going bad. So, there lies the HUGE problem that NO ONE seems to address, EVER! I have made this claim for the last year in several articles and not one journalist in the country has shined a light on this very serious issue that needs to be exposed.
Please read my past article on this subject, Should Lenders be Allowed to Participate in the Mortgage Clean Up Process?,
If you don’t have enough people to help the millions of people that need help, then you are not doing everything you can do to help, right? This is common sense, and if you don’t have that, then I can’t help you there.
In fact, all these Hope Now numbers and MBA stats are just lip service and propaganda.
How long are the American people going to remain in their apathetic states before they stand up against this injustice being played out in every city in our country by lawless lenders and servicers who are dragging us all down with them?
News you may be able to use
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That’s right, Moe. Fight the injustice and expose the lies. The tyrants of the mortgage and banking industries have destroyed the economy of the nation and sickened the economy of the whole world. It’s disgusting how they continue to present themselves as trying to help the consumer when in fact they are just trying to help themselves by maintaining their greed and avarice. Never believe the lies that are presented in the news media. They just perpetuate the situation we find ourselves in by not telling the whole truth to the American people. Keep fighting. Keep fighting!
Thanks Captain. Lets continue to spread the word.
Its practically impossible to modify a loan with JPMorgan Chase. If homewoners in trouble file a class action law suit against Chase stated income loans - Chase will have no choice but to modify practically all the loans. Majority of loans were lite doc, no doc or stated income…
CAN I APPLY FOR HOME MODIFICATION EVEN IF I WORK IN ANOTHER STATE.. TO SAVE MY HOME?//
I have a question, can a loan servicer, Saxon, take insurance money and apply it to the balance of a loan? I had an accident on my property, not me, and they withheld the last third of the payout because I am deliquent on my mortgage. When I asked previously if they could do this, the rep said unequivicably no, but they sent me a letter that stated just the opposite. What gives?
I am in default on my home loan, but when I call my bank for a loan modification i keep getting and extension, will I lose my home with the extension?
Hello Everyone,
I have a loan that is serviced by SPS and I agree it is like pulling teeth to get anyone to work with you. I call and get one person that tells me to do one thing; I do it, only to be told by someone else when I call back that they cannot help me. It is very frustrating and tiring. I just sent a letter to them requesting a loan modification under the Obama-Home Affordable Modification Program. I will keep my thoughts and prayers going up along with crossed fingers that this will help me otherwise me and my family are out on the street. This is a tough company to work with but I am trying……Good luck to all of you!
How do you determine legal violations on your loan? Do you have an article that lists some things to look for? This would be great for student loans as well!
Friend made a payment to avoid foreclosure of $5470.12 the loan was 3 months behind monthly payment is 537.00 was told the payment brought the loan current as of end of february. Now shes being told the woman she spoke to didnt note the account as current. They say she owes 1300 when monthly payment is 537 and was due march 1. Do you have any suggestions?
Regarding Saxon. I believe they are the worst service company there is, and that’s saying something. I don’t believe you will get any assistance from them, and I think they will pursue any method possible to apply charges to your loan, whether legal or not. I think it’s just a matter of time before the Attorney General of Texas announces some huge class action lawsuit against those guys like he did with Countrywide. But Saxon couldn’t get itself bought out by a bigger player, so it will probably just crumble. I sure hope so, anyway.
Good luck with those guys, but I fear the worst for you.
Does that whole ‘find legal violations and threaten to sue’ angle work? When the owners of the company I work for (attorneys) set out to learn the modification business last year, they partnered with a lawyer who claimed to do a forensic accounting, find errors, then threaten to sue unless they modified the loan. And it didn’t work. And thinking about it, I don’t see how it really could. Do you think Wells Fargo would be afraid of some country lawyer who can’t afford to go to trial? If so, he’d have to charge his clients a fortune for his services sine they’d often include trial fees. No, Wells would wipe the floor with guys like that, run them out of money in no time.
So far I don’t think the lawyer touting that method has modified any loans for his customers. However, it’s a great marketing tool, and probably much easier to attract clients.
But I could be wrong and it may work. I’m just skeptical.
Great site. Thanks for the info. I agree 100%. If a homeowner thinks that the lender or bank is going to give them a Loan Modification that has the homeowners best interest at heart they better think again. The lenders and banks have only one thing in mind, there investors and there bottom-line. Using a third-party entity to negoiate a Loan Modification on the homeowners part, really is the best approach.
BENEFICIAL- WILL THEY HELP? THATS A BIG FAT NO!! I HAVE CALLED, WRITTEN,FAXED, AND CALLED AND CALLED WITH NO HELP. I CAN PAY SOMEONE$2500 TO DO THIS FOR ME BUT IF I HAD THAT I WOULD PAY MY MORTGAGE. THEY DON’T TAKE INTO CONSIDERATION COLLEGE TUITION AND CHILD CARE- THATS AN ADDITION 1400.00/MONTH THAT I DIDN’T HAVE TO PAY OUT WHEN I GOT MY MORTAGE. PLEASE SOME ONE HELP ME.
Could you tell me if Ocwen, Central
Mortgage, Wachovia, Washington Mutual
or Bank of America have lawsuits for
no doc loans or adjustable rate loans.
Thank you.
TYPE IN YOUR LENDERS NAME FOLLOWED BY SCAM. You’ll find people who’ve gotten a modification from your lender WARNING YOU. This is what I found so far…
1. Their negotiator will charge you upfront fee’s $500 +
2. Your lates payments and fees will be added to the new loan principle.
3. They claim they’re taking years off the loan. Where?
4. They’ll reduce your current payment by maybe $30. a month. But they’ll just add it back in to your escrow account or it’s coming out of your new higher principal loan.
5. They may say you don’t qualify under the new plan even though you do.
Check it out:
http://www.complaintsboard.com/bycompany/american-home-mortgage-servicing-a55770.html
I love this thread because my main concern is that people get educated. The reson we are in this crisis is due to irresponsible lending, and now it is up to us to fix this huge mess. Our crisis of credit could have been avoided, however now that eveything is said and done, we all have to do our part in trying to reverse the damage. I respect Moe Bedard for putting in so much effort to educate consumers. My loan modification company does legitimate loan mods for people in real need. Banks are much too busy and have maybe one or two people in their loss mitigation department, so it is up to the consumer to be proactive.
I am helping a friend who does not speak English to modify his loan. He has a very high interest rate at this moment, and it will become in ahigher one in less than a year from now, he also signed a contract that does not alow him to refinance his mortgage for three year after this period his mortgage will change from fixed to variable.
tell me if this is a subprime mortgage?
Regards
Luis Alvarez
My husband started a loan modification on one rental property that we own a few months ago. This property is mostly occupied by family (my brother) so obviously we don’t want to just let it go. Then later when our own home was in trouble we tried to get it added to the process but the attorney said no he didn’t feel he could handle any other cases at that point.
Since we have found another attorney, who seems to be on the level, willing to work out payment arrangements, and claims to have a 95% success rate in restructuring loans through loan modification. He feels we have a chance to save both properties but doesn’t know yet that we already requested a modification on the rental. not sure if we need to tell him or not? I think it’s sad that we’ve had to engage two attorney at this point, without really knowing what will be the outcome on either house.
The question in my mind now is this. Is it possible that we might actually save our rental property (the house my brother lives in) and lose our primary property? We want help but also want to be ready for the reality of what might really happen.
We are trying to negotiate with Wells Fargo, they bought our loan when we were in the process of working on a reduced principal & interest rate loan with our old lenders now WF will have nothing to do with us. We never missed a payment or were late, I think there may be something funny going on here, the district manager of our old loan company and others have told us our loan should have been red flagged so they knew we were in the middle of a new loan. What now?
did the state of indiana just pass a law forbidding loan modifications being handled by afs loan modification agencies from the state of california??
Moe Bedard,
I recently came in contact with a company named “Grander Financial” in Irvine, California. I have checked into the background of this company with the Department of Real
Estate and BBB; they seem to be authentic. However I am still lost! Today the DRE told me that I should do the Mod myself because these companies will end up doing the same thing that I am capable of doing??
Based on what I’ve been reading it seems it would be best to have a person who has more experience in this area, perform the modification. I do need to do something pretty soon. Can you help with a suggestion? Are you familiar with Grander Financial?
does anyone have the phone number to the EXECUTIVE TEAM AT WELLS FARGO thanks
Does unemployment income count as income in the Homeowner stability plan
I am currently working to mod my loan with Wachovia / Wells Fargo. Unemployment is NOT supposed to be count toward income. When you go for a loan or refi at your bank, they will not give you a loan based on this temporary income. However, the Loan Mitigation dept and 995-HOPE will try to count that as income. They want it which ever way works to their advantage!! You answer will vary depending on who you talk to!
Wall Street and Associates is a loan modification scam, falsely guaranteeing results, charging upfront fees, pressure selling at all times, and even claiming an affiliation with the Obama plan.
Check out their site: http://www.WallStreetandAssociates.com to see their nationally televised commercial with Obama on it. These people should be shut down immediately. Here is their info:
Wall Street and Associates
16200 Ventura Blvd.
Suite#301
Encino, CA 91436
Phone: (818) 999-0333
Fax: (866) 204-9998
Dear Moe,
I am new to the finance industry and read your article. I am (when you boil it down) a sales man. Working under the certificates of the broker and the lawyers. We are selling Loan Modification services. I interviewed with another company prior to the one I’m with now and all I can say is BOILER ROOM!
This one seems to be legitimate though. Everything you blogged is in compliance with what they are saying they can “possibly” do for people. We are charging about 1% of whatever the current principal is, and more if they are late, because that may call for more legal action. I’m out in California, so telling homeowners they need to come up with 1% amounts from anywhere to 3-10K.
Anyhow my question is, is 1% a fair amount? it seems reasonable to me if you look at the overall picture. I’d sure like to get a correspondence going with you, but I don’t want to take up too much of your blog space. anyways let me know. Thanks!
Can you get a loan modification if you pay interest only????