Loan Modification.com

By Christian Dix

The process of getting a mortgage loan modification or a short sale will be simpler in 2011. Getting sandbagged by your mortgage servicer will become much less likely in 2011 – if you follow the new rules.

First, you need to know that mortgage modification is now a do-it-yourself mortgage modification. Same for do-it-yourself short sale. Any other search in Google, such as, avoid foreclosure, prevent foreclosure, or stop foreclosure should result in the same process.

Why? Because the mortgage servicers have learned that no court will hold them accountable for being stupid. As long they don’t foreclose on you, you can’t make them do anything. Only when they file a foreclosure can you, the distressed homeowner, stop them. You stop them by proving that you are trying to negotiate a mutually beneficial solution to your ‘troubled asset.”

At least in the initial stages of mortgage modification negotiations, no third party can do anything you can’t do yourself. You wouldn’t pay someone to tie your shoes, would you?

The new Federal Trade Commission MARS Rule governing ‘up-front fees’ collected by any third party mortgage negotiator makes it highly unlikely that any firm will find it profitable to negotiate a mortgage on behalf of anyone anyway. This under-publicized new rule takes full effect at the end of January, 2011.

To prove good faith to your mortgage investor, you mail every supporting document by certified mail, return receipt requested. These receipts become part of your file that you might submit as evidence in any court foreclosure defense that may arise. The sooner you file, the less fees the mortgage servicer can attach because you have proof that they received your documents/file. Translated: No faxes.

We have anecdotal evidence that one well-known lender had a fax machine in their Loss Mitigation office that fed directly to their shredder. That is no joke, either.

When you call your mortgage servicer, you will be simply talking to a call center. They will be reading a computer screen prepared for them by a Loss Mitigation Department that benefits by foreclosure and fees; not by mortgage modification or short sale. You will never, ever talk to an authority decision maker on the phone. Get your mortgage servicer’s mailing address, request a mortgage modification or short sale package and get off the phone. Anything else just wastes your time and increases your stress.

You DO NOT have to miss mortgage payments to show “Imminent Default.” If you believe what you hear on the phone, call your local convenience store and ask them for instructions. Same authority level. Your mortgage servicer is simply a bill collector. You want to communicate with your mortgage investor. That means certified mail, RRR, period.

Next, you need to provide your mortgage investor with bank industry recognized calculations that show the best resolution to your distressed asset. The REST Report calculates the innumerable calculations needed for you and your mortgage investor to show either a mortgage modification or a short sale as the most beneficial resolution. These calculations result in an ultimate calculation of Net Present Value, USING THE BANK’S OWN SOFTWARE. You beat your lender with their own stick. This is a $2.8 million software program, and your bank knows it.

The Home Affordable Foreclosure Assistance. or HAFA, provision of HAMP (Home Affordable Mortgage Plan) has been a miserable failure. Once you commit, there’s no escape. There are no reports of satisfied homeowners that I can find; and many, many reports of RE agents that hated it. HAFA was written by the banks. ‘Nuff said.

We have run almost 1500 REST Reports with astounding results, both in and out of court. If for some reason, your mortgage servicer ignores the incontrovertible calculations of the REST Report, a foreclosure court judge will not. Has not.

Just imagine your mortgage servicer in front of the judge: “Mr. Lender, are these your calculations, using your software?” Lender: “Yes judge, they are.” You have just proved lack of good faith on the part of your lender. Game over.

Just imagine your mortgage investor going to their mortgage insurer: “So, Mr. Investor, Your own calculations show that a mortgage modification or short sale was the best solution to this distressed mortgage. And you want us to pay you for this foreclosure? We don’t think so.” Game over.

So, after you officially file your supporting documents, including the REST Report on top, you call your local District Court once a month to make sure your case is not on the docket. If not, enjoy your free house. If it
is, march right on down to your foreclosure court and file a copy of your entire file, with certified mail receipts and REST Report on top, as evidence in your foreclosure defense.

Just imagine: Your judge lives in your neighborhood. You have just submitted the bank’s own recognized and proven calculations, with proof of submission to the lender, (Read: good faith). Again, the results have been spectacular, both in and out of foreclosure court.

Lastly, in my two years of assisting distressed homeowners file their mortgage modification or short sale applications, I have found and supplied a spectacular hardship letter template. No one can or should write your hardship letter for you. But there are proven aspects to that letter that get results. It’s required as part of your application, and I know those aspects. Believe it or not, this is a human endeavor. You just have to get to a decision-making authority with an offer they can’t refuse. Heh. Reminds me of a movie I once saw.

Closing caveat: Because every foreclosure action and mortgage is unique, You may or may not need, or want, legal counsel in your mortgage modification or short sale journey. But there’s plenty of time for that later. And you’ll assuredly save money anyway by doing the REST Report research for your attorney anyway. Forensic loan audits are a separate, and probably subsequent, consideration also.

The author has been blogging about the mortgage lender treachery for a year and a half, as well as assisting distressed homeowners in mortgage loan modifications and short sales. For more information, please click: http://mortgage-monster.com/do-it-yourself-mortgage-modification or http://mortgage-mod-monster.com

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