Mar 09

Loan Modification - Help for Home Owners

REAL ESTATE BEAT    

Loan Modification - Help for Home Owners
Written by Bill Barksdale


It’s not news to anyone that we are in challenging times.  We all know that government has failed to provide responsible leadership when it comes to the economy and oversight of financial and other large corporate operations.  Deregulation and lack of prudent oversight is causing a break down of our national and world economies while governments pump trillions of tax-payer dollars into failed, sometimes corrupted companies.  Someone, of course, is getting these dollars – but that’s a different topic.

If you are a home owner who is in danger of losing your home because you can no longer afford to make your mortgage payment due to adjusting (read that as increasing) loan terms or bad terms from a sub-prime loan – you are probably asking if there are solutions out there that can help you.  Foreclosures rose 82.6% last month compared with a year earlier according to a new report from ForeclosureS.com.  What can be done to stop the bleeding?

Let me start by saying, I am not a loan modification professional.  I am not an attorney or someone who is qualified to give financial advice.  You need to speak with appropriate professionals.  I can only let you know that there is help available for many who need it.

You cannot be passive if you are in danger of losing your home.  In preparation - get a large pad of paper or a notebook to take notes as you go through this process.  You’re going to be speaking with a lot of people as you save your house.  TAKE NOTES!  On the left side enter the date & time you make a call.  Write down each phone number you call.  Follow that with the name of the person you speak with, what their title is and briefly summarize what is said by them and you.  As you go through this process make every effort to be polite to the people you speak with.  They are getting a lot of calls and if you want help, be nice but firm.

According to the U.S. Department of Housing, there are several things that can be done with loan modification.  1) Legal fees, related foreclosure costs and some other expense can be added into the modified loan.  2) Late charges can be waived by the lender when the loan is modified.  3) The interest rate can be changed (lowered).   One professional loan modification company states they can help you get rate & terms changed and will help with writing a “hardship letter” to the lender explaining how you got into this situation, payments that are overdue can be added to the loan amount, the loan term can be made longer to help lower the payment.  It’s even possible to eliminate 2nd mortgages.

The first thing to do is pick up the phone and call your mortgage lender!  Find the courage to make that call.  You will be making many calls as you save your home.  Now is the time to start – today.  Call the customer service phone number on your mortgage statement.  Don’t wait until you can’t make your next payment to do this.  Tell the person you speak with who you are and be prepared to give them the loan number that appears on your mortgage statement.  Ask to speak with the Loss Mitigation Department.  Ask for the direct dial number for that department and write it on your pad.  You’ll need that number in the future.  Don’t chat with the customer service person.  They usually can’t help you.

Ask the Loss Mitigation Department person their name (write it down) and title.  Explain that you have a loan that is adjusting to terms you cannot afford and you don’t want to become delinquent on your loan.  If you are already delinquent, explain that you need to modify your loan to avoid falling further behind.

Ask how the loan terms can be modified so you can afford to keep making payments.  It’s important to let them know that you want to keep making payments and keep your house.

If you get someone who refuses to help ask, politely but firmly, to speak with a supervisor.   If that doesn’t work, call your congressional representative and ask for help.  In our area that is Congressman Mike Thompson.  His phone numbers are 707-226-9898 or 202-225-3311.

The lender is going to ask you questions about your situation and you must be totally honest.  They will confirm the information you give them.  Frankly assess your situation.  Remember, you want the lender to have confidence that you can keep making your payments if you can just get that payment reduced or, at least, not have it go up.  Lenders are always assessing what is acceptable risk for them.  Responsible lenders are actively trying to help their customers if there’s a chance the loan modification will improve that borrower’s situation so that they can keep making their payments.

If you are in too deep, they may not be able to help you, but I always believe in trying.  Don’t give up just because you get one “no”.  If you have enough income to keep making your preincrease payment, you have a good chance of getting a loan modification.  There are books and publications that explain the process.  Search in internet.  Call your local bookseller.

For those who just can’t face the process on their own or you get no help from your lender, there are companies that specialize in Loan Modification assistance to assist challenged borrowers.  Some are just scams and some are responsible professionals that will make every effort to help you.  One loan agent that I have worked with for years, Debbie Owsley at 707-566-9746, has been specially trained to help borrowers with loan modification.  There are others.   You will pay a fee to these people but the good ones can really help.  Note that not everyone can be helped.

Legitimate professional companies have legal council to assist you, as well as other necessary resources such as established relationships with many loss mitigation departments at loan companies.  Remember that lenders are being flooded with requests for help.  This process takes time.   If you have lost your job or have some other problem that means you can’t make even a modified payment, they may not be able to help you.

As our economy changes, more solutions will start emerging.  We are in a time that needs creative solutions.  The very bad economic decisions that resulted from the deeply flawed path of deregulation that was started in the1980’s and carried through to the present, will take time to reverse and repair.  Hopefully, with public pressure, politicians that pushed for complete deregulation will retire and truly ethical, responsible leaders will emerge in both government and business.   This process will change lives.  It’s important to remember, we are all in the same boat – that is, a nation that must always work to find solutions and be better.

ABOUT THE AUTHOR, Bill Barksdale: I have been selling real estate in the Willits/Mendocino Co. market for over 18 years. I can be reached at Coldwell Banker Mendo Realty Inc. PH: 707.459.8888 or Email me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it . I hope you will find my site (Bill Barksdale's Real Estate Site) of use to your home buying or selling a home now or in the future.

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