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.
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 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.
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?