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Umm, back to the regularly scheduled programming.
My boss and I have been searching out this loan modification stuff for awhile now. I have come up with some pretty interesting information after finding the material I was looking for - not that I KNEW what I was looking for, but when I found it, wow!
If you go to the government’s website on the agenda of “Keeping Homes Affordable”, the program that was initiated by Obama and now is allowing for 125% of your home’s value to qualify, you will find some very interesting stuff there, especially if you’re a person about to lose your home to foreclosure.
But before I go into that, I will preface this: I applied online with a company that sends your info out to “Loan Mod Specialists”. Those companies call you and start giving their line (of BS, I might add). I have listened to well over a dozen of them at this point. They ALL tell you they are accredited with the Better Business Bureau, they ALL tell you they have had the highest success rate of any modification company in the business anywhere, etc etc etc. Well, they can’t ALL be the best, now can they?
Some of them sound like used car dealers - their voices have SCAM written all over it. One guy I summarily rejected after 2 rounds of crap. After reading online about people getting ripped off - numerous stories about it, and then seeing these 2 companies in California who are being given a cease and decist order - I just wrote it all off. NO WAY am I giving UP FRONT that kind of money to ANYONE for anything like that.
Why on God’s green Earth would you pay that much money up front? Do you do that with anything else in life? I mean, they want the whole amount in their account before they will do anything for you. It turns out, a lot of them aren’t DOING - ANYTHING - after they get the money. I told ALL of them flat out that there is no way I was going to fork over that much cash before “your company” even did a thing. They all tell you that your money is fully refundable, etc etc etc. I asked all of them to send me their policy on the refund and all the fine print. Not a single one of them sent me anything that dealt with that particular point - they sent me a lot of other stuff, but not anything that covers THAT issue.
So, I figured, what they hey, why can’t I just do this myself? I”m the biggest do-it-yourselfer on the planet (okay, you can argue that if you want) I will do anything - just about - if I can, indeed, do it. Talk about THESE days, definitely I need to save every penny I can considering this last weekend’s AC catastrophe and the financial dump my bank account took after that little gem of an event occured.
Well - here’s what I found out: That plan by the Obama Administration? You have to go through your OWN lender to get it. You can’t just go onto the government’s - or anyone else’s - website to do it. The loan mod “specialists” don’t bother to tell you that little detail. If your lender is doing the mods, great, if they are not, what is a loan mod “specialist” going to do about it? It’s ALL a bunch of guff. Why can’t you just do it yourself?
The simple answer is: YOU CAN. Your bank/lender probably has a whole section of their internet website dedicated to it - and probably including an online form you can fill out to apply for whatever mods they are giving out. If they don’t, CALL THEM YOURSELF. So what if you’re behind in your payments, that’s the whole point. If you are not calling them out of fear, you are only hurting yourself. They’re going to ask you to send them all kinds of information. They are going to ask you to go over every penny of expense you have for any given month. My company even wanted to know how much money I spend on dog food. EVERY expense.
I have found that, with these people, if you are nice to them and respectful, they aren’t going to chew you out and demand a payment - there are MILLIONS of other Americans going through the same thing you are, this isn’t like you are the odd-ball-out/lowlife/scumbag because you are behind in your payments. If that’s true, the entire country is a giant sleezeball filled with scumbags.
Okay, before you call them, here’s your homework. Go over ALL of your expenses, write them all down - calculate each expense for an entire month: Food; gasoline; cable/satellite; credit cards; car payments; water bill; electricity; phone service; cell phone; any other utilities I have miss such as natural gas; ALL of it. Add it all up. Now, you add up your monthly income. Well, what if your monthly expenses exceed your monthly income? Well, that’s the REASON you need a loan modification, right? Your lender isn’t being forced to do anything, it’s all about what they are willling to do. Which is why the term nice and respect and don’t get mad/heated arguments/nasty words - they aren’t going to do you ANY good and may hurt you. No 2 lenders are alike - you can’t know what they are willing to do for you - if anything - until you apply for that mod. Just be ready with all the information they are going to want.
For the Obama plan, the interest rate can go as low as 2%. Whatever 31% of your income is, that’s how low they will go with the interest rate, but not lower than 2%. So, you can figure that out, too - calculate what is 31% of your monthly income and that’s what they are going to base a loan mod on. If your income actually goes even lower than that - some companies are actually “adjusting” the mortgage. Again, it’s just what each individual company is willing to do. If you don’t have a job and no way to pay anything - well - I am not an expert, I’m just sayin’ what I’ve learned.
When they get all the information they want, they will come up with whatever they can do for you - if anything. I’m at the end of my paper trail - my lender wants me to prove my tenant income via rental agreements, I was told this on the phone today. No problem, I have all 3 of them. I have sent them all kinds of information and have made a lot of phone calls to my company. I won’t even entertain another phone call from another loan mod company, they can all go bug off. Even if I don’t get anything - but I was told today that I most likely will get “something” - he just wouldn’t tell me until I could prove my income.
Well, I may have shot myself in the foot by telling them about my tenants - I might have “screwed” myself out of a better offer by telling them I have that income - especially considering it would be nice NOT to have to have fully 3 tenants living in my home. Be that as it may, I want to be honest about it, so - I am. But I don’t really know how they come to their conclusions, so, I am definitely not suggesting anyone say they are getting less income than they are. I’m not really giving any kind of advice - I’m just saying here that for those that are facing foreclosure, are afraid of the scams and losing money for nothing, you most certainly can do this process by yourself.
Regardless, another thing they are going to ask you is for a letter of hardship. WHY can’t you pay your mortgage? Mine was simple: 2 separate cuts in hours have netted me over $900 per month in lost income from work. That is definitely an excuse they will accept. You might have had a spouse that lost their job - but you still have yours. Anyway, if you are looking for the refinance mod - I think you have to be current on your payments. Hey, I’m just trying to motivate people to take their own action, that’s really all I”m doing here. In my case, once I get started on something, I am relentless, I will continue on the given path until there is either a resolution or the path comes to a fork in the road - or a multi-phased intersection with potential paths leading multiple directions. BTW, even the loan mod people ask YOU to write up your own letter of hardship. I really can’t see WHAT these people are doing? Just taking your paperwork and sending it in, the same as you could have?
Another aspect of this mod is that it is a 5-year thing. It is not permenant, at least not from what I read. The interest rate will go up in increments over a span of time, I think, after the 5-year time frame elapses. It’s basically a life line being thrown to you - probably the thinking is that hopefully, after that much time, you have jobs again and can make the payments at a higher interest rate. Whatever - save your home now, deal with that bridge when it comes, that’s all I can say about it. That does NOT mean it’s going to revert to an ARM - it just means that the prevailing rate will apply up to a certain amount/percentage. I wasn’t real clear on that aspect of it - I’m sure the lender will be able to give you better info.
Anyway, I am so infinitely glad I did NOT give those mod companies any money, I didn’t even hint with any of them that I was going to do anything, I just wanted to hear the spiel and after I get several calls, I then wanted to hear if the spiel was the same from all of them. Definitely not. I am guessing what they are going to offer me - I’ll take anything at this point just to get out of arrears, but I would love to get the mod that lowers your interest rate, as I don’t think I qualify for the refinance (total bummer).