Banks who participate in the HAMP (Home Affordable Mortgage Program) are supposedly not allowed to foreclose on a distressed homeowner who is negotiating a mortgage modification. Turns out that expectation is voluntary. Turning in my homework was always voluntary too. Wasn’t yours?

“The federal government requires banks participating in HAMP not to foreclose on homeowners while they’re being considered for a loan modification.” Those of us in the mortgage modification biz have all known this forever. This is akin to: A law prohibits car mechanics from selling someone’s car while they’re repairing it.

However, in HAMP, the rule is voluntary and has no enforcement mechanism.
Kinda like HAMP in general. We also know that banks foreclose on homeowners while they’re being considered for a loan modification all the time. We read about it weekly. If you haven’t seen or read it before, the Foreclosure Dept. and Loss Motigation Dept. at your bank are two, autonomous offices and no one requires them to communicate. One person actually getting up and walking to another department to talk? Nah? Email? Not possible. Now anyone that even knows how to hook a computer up knows that scenario is evidence of total disregard for business ethics – unless you work in a bank.

You assume that your bank negotiates a distressed mortgage in good faith at your peril. If you’ve read even more than one story of banks losing mortgage modification files, you might see a pattern here. We do.

And that seems like… if your car dealership blew up your car while they were repairing it… and then claimed it was a mistake. Oh, my. Did we do that again? Sir, I’m so sorry… I had no idea… Larry… damn it… it was a break job. You threw your cigarette into the gas tank again, didn’t you? Look, we’ve talked about this before… Sir, I’m sorry, it looks like you’ll have to buy a new one. (Actually, that happened to me. Again, how do you prove it? Stay with me. The answer is the REST Report, again.)

California SB 1275 was bill that would have required lenders to provide homeowners with a fully considered loan modification decision prior to foreclosing. It also would have given homeowners the right to sue their lenders if the bill’s process wasn’t followed.

The Center for Responsible Lending said, “The confusion and errors that cost Californians their homes, are devastating to the state’s housing market, but are avoidable.”

In New York this year, the legislature approved a new law that gives the state attorney general permission to sue lenders for repeatedly failing to consider loan modifications in a timely manner and for foreclosing during the modification process.

Even though the bill was supported by EVERYONE but the banking lobby, it was rejected 36-30 in the California Assembly. Even after it was approved by the state Senate and three Assembly committees. This time… no… Can you say, “Banking lobby?”

If your philosophy is that the lenders should not be held accountable and not have repercussions for their actions, then you might buy into this.

This is the third leg of evidence that the legislative and executive branches of either federal or state government will not hold banks accountable for ineptitude in their processes. But again, we see the judicial branch stepping up to the plate and insisting that banks do assume responsibility to negotiate in good faith on a mortgage modification or short sale. All the distressed homeowner need do is prove compliance every step of the way. If you understand “Return Receipt Requested” when you go to the Post Office. You’re good to go.

I sell the REST Report: the one single tool to mount a foreclosure defense in any court, to prevent foreclosure and neotiate a beneficial mortgage modification – without an attorney – which is the best way currently anyway.

The REST Report uses the same software your bank uses to approve a mortgage modification or short sale.

Call me and you can fight them with their own sword.

Read Mandelman here

Several weeks ago I watched Treasury Secretary Geithner dodge questions about the mortgage modification mess that is HAMP (Home Affordable Mortgage Plan). The week before I watched Press Secretary Robert Gibbs do the same thing. It is that the mortgage modification law exists, but the federal government, and the US Congress, are going to do nothing to enforce it. This past week it was made clear that the nation’s Judicial Branch was moving to pick up the slack.

Mandelman posts an article today that confirms all of that. Now since everything Mandelman does and writes about the mortgage modification mess is non-profit and political commentary, he does his typical rant and rave about the situation. If you’re as angry as Mandelman is, then you should follow the link below and read his article.

I on the other hand, more than Mandelman, am concerned with any practical solution to an individual distressed mortgage owner solving their mortgage dilemma. The answer, as Mandelman will tell you, is the REST Report. Every post I’ve written since the end of June advises the REST Report. Why? Because it is proving itself as the one, single, effective method to reconcile a distressed mortgage: either through a beneficial mortgage modification, or an effectice short sale of your property.

Two weeks ago, Mandelamn interviewed a homeowner who had struggled for 14 months to get his loan modified. He finally did in a few short weeks after sending in a REST Report. This is huge. If you have a distressed mortgage, read on only if you have time. When you decide you come first, your next call should be to me. I sell the REST Report.

No one knows more about the mortgage modification mess than Mandelman, as will become apparent at reading any article he posts. Among other credentials, he was an advisor to the US Congress and the Federal Trade Commission on the recently enacted Financial Reform Bill.

To condense Mandelman today:

It all started this past August 16th and 18th, when the Treasury Department invited some bloggers to come hear what Tim Geithner and other nameless Treasury officials had to say on a range of topics, including the foreclosure crisis and the Home Affordable Modification Program, HAMP.

Treasury Department officials said, in no uncertain terms that they knew HAMP wouldn’t save homeowners from foreclosure. The administration knew they’d only reach a fraction of those needing help, the official claimed, and that millions of homeowners would ultimately lose their homes to foreclosures that the administration chose not to prevent. Nevertheless, HAMP remains the best option — even though it’s reaching fewer borrowers than forecast. HAMP prevented an outbreak of foreclosures exactly when the system could have handled it least.

The big idea was; pass a law, look good, and then ignore enforcement.

The reader needs to understand the term, “shadow inventory,” those with severely delinquent mortgages, in foreclosure or already repossessed that have not yet been put on the market — has significantly grown since the administration took office and is estimated to range from 5 to 7 million homes. Through June, borrowers in foreclosure have been delinquent for an average of 461 days before being evicted from their homes, according to Jacksonville, Fla.-based data provider Lender Processing Services.

Cherry-picking from Mandelman’s observations:

1. President Obama appointed Timothy Geithner to be Treasury Secretary. As president of the Federal Reserve Bank of New York, Geithner served under a board of directors headed by JP Morgan Chase CEO Jamie Dimon. Geithner had been partly responsible for the decision to let Lehman Brothers go under, for TARP (Troubled Asset Recovery Program), and for American International Group (AIG) paying its creditors with taxpayer money. As his chief of staff, Geithner chose a former lobbyist for Goldman Sachs.

2. President Obama: “The recession was caused by a perfect storm of irresponsibility and poor decision-making that stretched from Wall Street to Washington to Main Street.”

3. On February 10, 2010 Obama said that he didn’t “begrudge” the $17 million bonus awarded to Dimon and the $9 million to Goldman Sachs CEO Lloyd Blankfein. “I know both guys. They are very savvy businessmen.”

4. A group within the White House that began calling themselves the “pitchfork gang,” said their attempts to persuade Obama take a tougher stance on Wall Street were undermined by Geithner and by National Economic Council head Larry Summers. Geithner and Summers were apparently worried about upsetting business confidence.

5. In the stimulus’s first year, the administration spent only $17 billion of the $139 billion allocated for infrastructure spending.

6. Geithner and Summers repeatedly blocked attempts to get tough on Wall Street on the grounds that doing so would threaten the recovery itself by upsetting the bankers.

Just on one day I’d like to see Obama come out in favor of cream in coffee, just so I could watch some knucklehead Republican oppose it on Face the Nation. “No, I say there should not be cream in coffee.”

Back to the distressed mortgage owner that Mandelman interviewed: At the end of the interview Mandelman asked him if he had anyone to talk to through the experience and he explained that he didn’t. Not the sort of thing you talk about, he explained. Through 14 months of being put through hell by his bank, through 13 SCHEDULED SALE DATES THAT WERE EACH POSTPONED AT THE LAST MINUTE… and he never told his wife until it was over and his got his modification. And again, he got it two weeks after purchasing the REST Report.

Read it here

Your lender may not sandbag you anymore. They must respond to your mortgage modification good faith efforts. This is a monumental decision.

Once again, Mandelman writes about the little guy beating the bank into a mortgage modification. The legalese will kill the avrage homeowner, but the effect is stunning. Get the REST Report, prove submission of your supporting documents, and you can do your own mortgage modification. The subject in the article did, is doing, just that. Judges are progressively recognizing that the REST Report, in addition to a complete mortgage modification file, is proof in a foreclosure defense.

This major lender tried to insist that they did not have to negotiate with the distressed homeowner, even with a federally guaranteed mortgage. (That being Fannie or Freddie, of course.) The judge found that, yes, good faith negotiations were in order. Little guy wins.

In this case, currently, the homeowner was missing some second level documentation. The judge gave the homeowner thirty days to submit it. You can imagine how much assistance this homeowner will get behind the scenes to comply. It’s happened before. Judge shreds the mortgage and awards a free house to the bealeguered homeowner. Stay tuned, it just may happen again.

A judge in U.S. District Court, Southern District of California, has issued an order that the Borrower is the Intended 3rd Party Beneficiary of HAMP. He may sue for Breach of Contract when the lender refuses to negotiate a mortgage modification in good faith. The lender never refused a mortgage modification, they just never responded. To anyone who has been sandbagged by their lender in pursuing a mortgage modification, does this sound familiar? The lender just proceeded to foreclosure as they wished.

This step is crucial: “Commitment to Purchase Financial Instrument and Servicer Participation Agreement for the Home Affordable Modification Program under the Emergency Economic Stabilization Act of 2008 with Federal National Mortgage Association.” (“Fannie Mae”) and agreed to perform certain loan modification and foreclosure prevention services for eligible loans.

The distressed mortgage owner also sued under the “Unfair Competition Law (Cal. Bus. & Prof Code § 17200 et seq. (“UCL”) and seeks damages. Can you say, “Pay me?”

The court ruled that the case should and would be held in the local jurisdiction. No traveling to Washington, DC. These banks are clever, aren’t they?

If you’re the intended third party beneficiary to a federal contract you can sue for breach of contract.

Last year, as you may recall, there were several attempts to enforce the HAMP guidelines and none were particularly successful. Mandelman wrote one article about an LA Superior Court judge who ruled that “HAMP Has No Teeth,” which was the headline of the story. In Minnesota someone tried to say that HAMP was a “right” and had some sort of “due process” argument involved. It didn’t fly at all. Now, with this ruling, it does.

Mandelman is right when he says that up until this order, it was pretty difficult for a homeowner to sue their servicer for doing almost nothing according to the HAMP guidelines. So, this is a pretty big deal.

Judge M. James Lorenz is in the U.S. District Court, Southern District of California. Judge Lorenz then went through every single page of the HAMP contract and Program guidelines. This judge is not afraid of doing the work.

Lastly, the lender’s lawyers tried the old “but your Honor… a homeowner can’t be the intended beneficiary of anything because then they’d all sue and it would be “unwieldy.” To which the judge hopefully just laughed. Judge Lorenz said that it wasn’t unwieldy because the lender would only have to worry about the customers they didn’t modify, which is a well-defined group, not the public at large.

In conclusion, (I love saying that because all my term paper teachers hated it) the REST Report sets you up for the same success this distressed mortgage owner is experiencing.

Alleging that you qualify for a mortgage modification isn’t enough. You need to show the judge absolute, irrefutable proof. You need a document that can withstand ANY amount of scrutiny. The REST platform is not a toy. It absolutely can stand up in court.

Saying you submitted all your supporting documents is not enough, you must prove that also. Return Receipt Requested proof from the USPS is the same necessity.

Guessing whether the lender in this case will appeal is an item for Las Vegas bookies. Opinions vary. Mandelman doesn’t think they will because if this order were to be upheld by the higher court, this lender and every other bankster would be in deep ca-ca. Another lawyer, who disagrees with Mandelman, points out that if they appealed it could mean waiting two years. But that lawyer also admitted that while the lower courts waited for the high courts decision, the court might very well issue TROs and stop foreclosures until the Appellate Court’s decision has been reached.

I provide the REST Report. Currently the only reliable method to get a mortgage modification is to do it yourself. Call me.

Read it here

Perhaps sandbagging distressed mortgage owners is exactly what the lenders had in mind. We’re now reading countless media posts about distressed homeowners giving up on mortgage modification negotiations because the banks wait months, approaching years, to meaningfully negotiate mortgage modification. We’re guessing the banks figure that the stress of unknown mortgage payments is greater on the beleaguered homeowner than the banks themselves. Wear ‘em down and they’ll give up.

We know that there will be no pressure from the government on the lenders to negotiate in a timely manner or in good faith. If you’re in a hurry to get a mortgage modification, give it up now and short sale, or do a strategic default (a very, very bad idea).

The new Principal Reduction Assistance provision to HAMP removes the excuse of being ‘underwater’ on a mortgage, removing strategic default as a viable alternative. Either modify or short sale, that’s the way it is. The distressed mortgage owner in the linked article made that mistake. He will pay. The article completely misses that point.

If you want a mortgage modification badly enough, you’ll endure the stress of sandbagging. Other than that, you have two responsibilities. First, purchase the REST Report and use the bank’s calculation of Net Present Value against them; and second, be able to prove to a judge that the bank received your supporting documents. Notice I didn’t say, “prove you sent them.” No, you must “prove they received them.” How? Return Receipt Requested through the United States Post Office. That’s how.

Another of the bank’s tactics will be to request the same documents over and over again every few months. The more opportunity to lose them. A foreclosure judge will not let the bank get away with demanding the same documents over and over. Be prepared and the judge will hold the bank to good faith negotiations. But the burden of proof is on you. Again, you can’t get in front of a judge and expect him to take your word for your faxing supporting documents. He has no reason to doubt your banker when he says, “We never got ‘em.” He said, she said.

The reason no one can answer your questions on the phone is because they don’t know anything. You will never talk to a bank authority, ever. Given preparation you’ll get official documents. That’s all. That’s enough. Again, don’t hold your breath. Missed payments go on the end of your loan. So why care how many payments you miss?

Your bank may not foreclose while you are in mortgage modification negotiations. Your single task is to ensure they don’t foreclose “By mistake.” Consult your local foreclosure judge regularly.

More than three-quarters of the homeowners who responded to a questionnaire said they did not trust their servicers to make a good-faith effort to evaluate them for a modification. Are you shocked?

I am a re-seller for the REST Report. The REST Report uses the same software the banks use to calculate the NPV for your home. It is admissable in court as a foreclosure defense and ensures that the judge will insist on good faith negotiations for your mortgage modification. Call me.

Read it here

The final article about the mortgage modification mess reports on the bank’s part in not assisting distressed mortgage owners in mortgage modification. This article in “The Street” finally approaches the real cause. The fact that the author found a mortgage modification company still in business is remarkable by itself.

The mortgage modification specialist quoted in the article mentions the habit of banks to simultaneously negotiate and foreclose on a distressed mortgage. Alluding to the banks losing supporting documents is a classic understatement.

Why it took three articles to finally get to the banks is a mystery. The banks started this mess, and they do everything to delay the solution. In a related article, this same “The Street” publication actually quotes a US Treasury official in their whitewashing the sandbagging by the banks. Those of us who follow this industry know full well that bank administrators deep-six mortgage modification files.

The article glosses over any explanation for failed mortgage modifications.
Quoting estimates of distressed mortgages nationally is useless here. The only important mortgage is the reader’s.

Bank’s have always had in-house mortgage modification plans. The fact that most of them are more beneficial than HAMP is irrelevant. No one can imagine that the bank’s are any more motivated to use their plan than HAMP (Home Affordable Mortgage Plan).

The one single calculation crucial to a mortgage modification negotiation is the NPV, or Net Present Value. This number is the bottom line in the decision of the bank to prioritize a mortgage modification,short sale, or foreclosure. Typically, this decision is also based on expediency for the bank.

Without this calculation, the distressed homeowner, and foreclosure judge, are at the mercy of the lender or servicer.

The single best document a distressed mortgage owner can include in their mortgage modification application is the REST Report. The REST Report uses the same software the banks use to calculate NPV (Net Present Value). It is being recognized by foreclosure courts as a definitive document in a foreclosure defense. It arms the distressed mortgage owner with a defense against banks and servicers that can’t, or won’t negotiate in good faith.

I provide the REST Report. Call me.

Read it here

An article today in The Street illustrates several current trends in the trials and tribulations of getting a mortgage modification. The family profiled here has been pursuing a mortgage modification for 18 months or so, with no success. This article illustrates without stating the main conclusion any other distressed mortgage owner needs to understand: For the foreseeable future, you need to pursue your own mortgage modification without any professional assistance. No professional mortgage modification firm, attorney or not, will, nor should they; engage in assisting any distressed homeowner with a mortgage modification.

The banks simply take too long. (With the current news, apparently they’re even incapable of consumating a new purchase or refinance mortgage.) No professional firm can afford to sit through the delays of the lender. It is a moot point to discuss the validity of ‘up-front fees’ for a mortgage modification negotiation. If it takes 18 months (and it routinely does), up-front fees just don’t matter.

Let’s be clear though, for a bank to state that “it’ll take six months to even look at it,” is a criminal lack of good faith. The family profiled here made the mistake of not applying for mortgage modification much earlier.

The article, and subject family, should know that it is illegal for a lender to pursue foreclosure while the distressed mortgage owner is negotiating a mortgage modification.

The federal administration has made it clear that they will not make any effort to enforce HAMP, or the Home Affordable Mortgage Plan. The distressed homeowner is on their own. The law exist, but not enforcement of it. This prevents the lender from foreclosure concurrent with mortgage modification negotiations. Not that they won’t try. It’s very probable that the homeowner will have to go to court to point this out to a judge. Very probably, this same judge would need to be consulted when the bank erroneously requests duplicates of previously submitted supporting documents.

The best way to pursue a mortgage modification is to purchase the REST Report and submit that along with the other required documents. The REST Report uses the same software the banks use to evaluate the NPV, or Net Present Value, of your property. This calculation is what the banks use to decide whether to grant a mortgage modification, short sale, or foreclosure.

The REST Report is recognized in the courts as proof of calculations that benefit all parties concerned, and will assuredly influence that same judge of good faith negotiations on the part of the beleaguered homeowner.

Call me. I provide the REST Report. It is THE answer for you to beat this mortgage mess and keep your home; or short sell it if need be.

Read it here

It took two and a half years, but finally, New York has taken steps to hold banks and mortgage servicers accountable for their negotiating mortgage modifications in good faith. Lenders and servicers have avoided distressed mortgage owners since the mortgage meltdown at the end of the Bush presidency. Just in the last few months, a few bank administrators have even been caught admitting to this obvious lack of good faith. (Please see the first video on this blog home page.)

It is patently impossible to blame the ninety-nine percent failure of mortgage modification negotiations and trial modifications on distressed homeowners failure to submit supporting documents for their mortgage modification. We all knew it.

New York regulators have crafted new laws to give the state authority to punish mortgage servicers. This is something the federal Treasury Department, in administering the Home Affordable Mortgage Plan, or HAMP, has failed to do. It is clear from statements from Press Secretary Robert Gibbs and Treasury Secretary Geithner that the federal government has no intention to put any more pressure on banks to negotiate mortgage modifications in good faith.

The new rules set clear standards for how servicers must handle homeowners seeking a modification. It appears that these regualtors will even be searching for an example to pushand publicize.

The delays that hundreds of thousands of homeowners have encountered in the administration’s mortgage modification program have highlighted the poor performance by many mortgage servicers amd banks, particularly the largest 86. Struggling homeowners seeking a modification frequently wait months, even years, for an answer.

The New York laws, which go into effect Oct. 1, lay out how servicers must handle homeowners in danger of foreclosure. Within 10 days of a homeowner’s applying for a modification, the servicer is required to acknowledge the request and specify what additional information is needed. Within 30 days of receiving all of the required information, the servicer is required to render its decision and respond with either a written offer or a denial in writing.

Those rules are precisely the same as those for the administration’s modification program. These timelines resemble timelines for the Home Affordable Foreclosure Assistance law that the banks helped write that took effect last April.

The linked article refers to threats of witholding of incentive payments. What needs to be pointed out is the laughable incentives. They are so low as to be insignificant.

It appears that banks and servicers will be accountable for lost submitted documents. In another section, they prohibit servicers from continuing foreclosure proceedings if the homeowner is being evaluated for a modification. We’ve long known that the forelosure department of a lender is not held accountable to communicate with the Loss Mitigation Dept. right across the hall. Foreclosures occurring during the mortgage modification process have been a persistent problem.

The regulations are an important step in bringing transparency and accountability to an industry that has long avoided regulation despite a history of abusive practices.

The Consumer Financial Protection Bureau, newly created by the Financial Reform bill, will have jurisdiction over servicers and could set similar rules. It’s well recognized that rollout of this bill will take two years. The banks are strongly fighting the appointment of Elizabeth Warren, who did more than anyone else in Washington to put teeth into the bill.

We know that it will be up to the individual distressed homeowner to pursue their own mortgage modification for the foreseeable future. The REST Report evaluates a mortgage modification application on the same software platform the banks use to evaluate mortgage modifications. I provide the REST Report. Call me.

Hopefully other states will get the message and go after the real culprits here.

Read it here

and here

The latest version of HAMP, or the Home Affordable Mortgage Plan, has accomodations for underwater mortgages to have principal reduction accounted for. As Mandelman states, where was it a year ago? As one reads through the details (watered down in Mandelman’s article, and even more watered down here), it is even more crucial that the distressed mortgage owner get the REST Report as an indispensable part of their mortgage modification application.

It doesn’t matter if the distressed mortgage is a government backed loan or not. The calculations provided in the REST Report will positively influence your lender in your mortgage modification negotiations.

The REST Report uses the same software platform that the banks use in calculating the terms of any mortgage modification, or even a short sale.
I’m assuming that your head will be spinning, as mine was, after reading even this superb terms reduction by Mandelman. I provide and also strongly advise the REST Report to any distressed mortgage owner who asks me. Briefly, all of the ethical and professional mortgage modification companies I knew of have been sandbagged by the banks. It’s up to the individual distressed homeowner to pursue their own mortgage modification for the foreseeable future. This is the way to do it.

Mandelman chronicles the failure of TARP to help homeowners, as well as HAMP. He points out that both pieces of legislation were a year late. He points out that this principal reduction aspect is a year or two late also. As with HAMP, the distressed mortgage owner today needs to know that the legislation is there at least. The problems with HAMP are not intention, but with enforcement.

The US Treasury’s new Principal Reduction Alternative (PRA) is scheduled to become effective on October 1, 2010, or whenever version 4.0 of the HAMP NPV is implemented, which ever is later. HAMP’s NPV Version 4.0, was originally scheduled to be released on June 1, 2010. Reportedly, testing of 4.0 is well underway and is should be released to the servicers in the next couple of weeks.

Net Present Value, or NPV 4.0 is what drives the PRA, which is a “deferred principal reduction program” that allows the homeowner to earn a principal reduction over a three-year timeframe by making all payments in accordance with the loan’s modified terms. Under the PRA, servicers are required to evaluate the benefit of principal reduction for every HAMP eligible loan with “high negative equity,” which Treasury defines as having a mark-to-market loan-to-value ratio greater than 115%. The crucial aspect here is that servicers are required to evaluate a property’s suitability. The REST Report will do that for the homeowner.

The PRA dictates that servicers must evaluate any loan being considered for HAMP, with a mark-to-market loan-to-value ratio greater than 115%, using both the Standard and the Alternative waterfall test.

As I read Mandelman, the consideration of loss of value is to be considered even before interest rate reduction. There are two ‘Waterfall’ tests for the lender/servicer to consider.

Mandelman points out that the lender/servicer is free to use their internal calculations to see if their is another, more beneficial to them solution to reconciling a given non-performing asset. He points out that this makes possession of the REST Report even more critical.

Apparently, this PRA, or Principal Reduction Alternative, are reported to the Internal Revenue Service and may have tax consequences as income. Given the abatement of tax consequences on negotiated mortgage deficiencies on short sales in 2010 and 2011, I’d bet something will be done by then.

Second mortgages held by the same lender/servicer are to be treated the same as the first mortgage.

The lender/servicer is required to respond to a complete mortgage modification application within 30 days. Another point that makes the REST Report crucial.

More responsibility will be placed on the borrower to keep current with negotiated payments. One more reason to not pursue a doomed mortgage modification.

The Helping Families Save Their Homes Act of 2009 (HFSTHA) established a Servicer Safe Harbor, and TILA was amended for the purpose of providing a safe harbor to enable such servicers to modify and refinance mortgage loans under a “qualified loss mitigation plan.”

To paraphrase Lombardi, there are four possible conclusions here. One of them is bad:

1. Read this article, be convinced, and call me for your REST Report.
2. Read Mandelman’s linked article, digest it, and call me for your REST Report.
3. Read Mandleman’s linked article, be fairly confused, and call me for your REST Report.
4. Read Mandelman and do nothing, and probably lose your home.

Call me. I’ll get you squared away and you’ll breathe a huge sigh of relief. As the TV commercial says, “I do it all the time.”

Read Mandelman here

My local newspaper published an article today about the mortgage modification mess. It seems the spectre of mortgage modification scams is here in Mesa County, Colorado also. The publication today is one more indication of our community’s history of being a six to nine month lagging economoc indicator. The author makes the same mistake that every other reporter makes in reporting on this mess: taking the word of ineffectual HUD counselors and realtors that aren’t fully informed.

Industry wide, professional and ethical mortgage modification firms are being sandbagged by the banks and forced to close their doors because the banks are allowed to avoid good faith mortgage modification negotiations. An informed distressed mortgage owner cannot expect a professional company to keep the lights on and wait a year to get paid for their effort.

The recently signed Financial Reform Bill allows up-front fees for attorneys, but it’s estimated that it will take as long as two years for the allowances of this bill to implement. Until then, the distressed mortgage owner is left to their own devices.

To almost every housing counseling hotline in the region, the phone calls are incessant. The average foreclosure prevention counseling agency is answering 150 calls a week from borrowers, far more than it can actually help. Nationwide, the wait time to see a counselor used to be one day, now the homeowner in need can expect to wait one week. Hud counselors have consistently only completed ten percent of the mortgage modifications they work on. The HUD counselor is quoted as saying that none of their long term clients have lost their property. She doesn’t say what their success rate is.

With just three foreclosure counselors on Colorado’s Western Slope, it’s only natural that some people are turning to companies across the nation that claim they will help people get out of the foreclosure process for a fee.

The Better Business Bureau knows nothing about the mortgage modification morass. Their information is skewed and worthless.

I know from my own mortgage modification, short sale, and principal reduction efforts that 99 percent of distressed property owners don’t respond to any offers of assistance. There’s no helping them. They’re not listening.

Bulk Real Estate Owned, or REO, sales are nothing new to the rest of the country. They’re certainly not ‘non-traditional.’

The most reliable way to a mortgage modification or a short sale is to purchase the REST Report. The REST Report uses the same software the banks use to evaluate the advisability of mortgage modification, short sale, or foreclosure. I have your report.

The most efficient way to complete a short sale is to have an investor purchase your property for cash and negotiate your hardship in getting rid of the mortgage deficiency before the closing. In foreclosure or after a non-negotiated short sale, the distressed mortgage owner is accountable for that deficiency. I have that investor.

Foreclosure is even worse than a bankruptcy. Don’t do it.

Call me and I’ll ethically and efficiently help you avoid foreclosure.

Read it here

Every week I go to my county foreclosure auction to check on what is selling; and mostly what is not. The banks are not dropping prices on foreclosure properties. It is always a mystery to me why so many distressed homeowners let their property go to foreclosure. I routinely mail advertising offers to negotiate their short sale. I’m sure these same distressed homeowners are deluged with foreclosure avoidance offers. But it’s obvious that the huge majority of these homeowners did nothing to avoid the foreclosure.

I can tell by checking the local Multiple listing Service that they did nothing. The huge majority of didtressed properties are REO, or Real Estate Owned. Very few are short sale offers. This is an incredible mystery.

Linked below is one more article that clearly explains why a distressed mortgage owner should pursue a short sale. I have seen the benefits of an investor-negotiated short sale. The opportunity to avoid almost every negative of a distressed property sale is huge. Again, foreclosure is the worst option.

“Losing your home to foreclosure has many severe consequences. First, anytime the bank forgives debt greater than $600, they have to report it to the IRS. For example, if the homeowner owed $200k for the house but it sold at auction for $120k, the $80k difference would be forgiven. Since this $80k is forgiven, the former homeowner is not going to pay the expenses for it. Since they don’t pay the expenses, the IRS considers this ‘forgiveness’ to be income, and the former homeowner may have to pay income taxes for that $80k. Not only has this person lost their house, but now the IRS will be going after them for tax payments.”

Getting an experienced short sale negotiator can help avoid all of these consequences. Through 2012, deficiencies will not be taxed by the IRS.

“Second, the bank may still choose to sue you for deficiencies of the loan. Using the example above, the bank may want the former homeowner to pay the difference between what the home was sold for and the amount owed. Not only has this person lost their house, but now the homeowner may have to make payments to the bank for the remaining $80k of a house they are not even living in.”

An experienced will negotiate the deficiency away, based on your hardship.
That same investor/negotiator can negotiate a low enough selling price that you won’t have to sit through months and months for serious offers. People looking to buy the property will know that the investor cash offer is much easier to close on. That will make your distressed property even more attractive.

“Finally, the credit damage on a foreclosure is quite painful. A foreclosure is considered by many lenders to be the worst possible event to happen to an individuals’ credit score (even worse than a bankruptcy). A credit score can drop up to 200 points with a foreclosure. But to make matters worse, it takes 10 years to remove a foreclosure from your credit score. Also, a low credit score can affect other items, such as your credit card rates as well as your car insurance rates. In many circumstances, having a foreclosure on your record can prevent you from getting certain types of jobs. Not only has this person lost their house, but their credit will be damaged for a decade and are eligible for fewer jobs because of this personal catastrophe.

We use Real Estate Agents for what they were trained for: selling houses.

Call me. You can have all the benefits of my previous clients.

Read it here