Duration:  00:55:00

Ryan Rockwood: Hey everyone and welcome to the show.  It’s Ryan Rockwood and I’m so sorry we’re running late today.  (Pause) Today is going to be a good day, good call even though it may not be super well produced.  As usual we’re just getting off the phone handling a million calls.  We have way too many but the good news is we have tons of great questions. Today’s call is all about your questions and we’re just going to get through it one by one. And hey why don’t you just leave that up.  I think it will work ‘cause it will be a big racket but my name is Ryan Rockwood. I’m here with my Dad business partner Mike Rockwood who will sit down in just a sec.  But, hey will you hit these lights right here, to illuminate you.  Fantastic, okay.  So welcome to the show everyone.

Mike Rockwood: Hey I’m illuminated.

Ryan Rockwood: Yeah.

Mike Rockwood: You want me to go on speaker here?  You got me on the hits then?

Ryan Rockwood: First I have to call in.  So here, why don’t you call in?

Mike Rockwood: Okay.  You can do all the [Inaudible – 00:01:32]

Ryan Rockwood: And I’ll give them a proper welcome.  For those of you that are new or don’t know.  My name is Ryan Rockwood.  This is my Dad and business partner Mike Rockwood.

Mike Rockwood: Hi everybody.

Ryan Rockwood: Most of you who are here is a result of the 60-minute loan modification book and product and everything that we’ve been doing for the past I guess a year and half now.  And I want to welcome you to the call. What we’re going to try to do is get through a ton of info tonight and even if at first glance a question doesn’t seem to apply to you, I would encourage you to pay attention and hang with us today.  As you can see the production value, tonight isn’t going to be exceptional.  However,

Mike Rockwood: Why?  Is there something wrong with our-

Ryan Rockwood: Well we’re 10 minutes in.

Mike Rockwood: Yeah.

Ryan Rockwood: In getting started and we’re kind of all over the place.  But the bottom line is today it’s all about questions.  You don’t have to a member to be here tonight and it doesn’t have to be a question related to loan mod specifically.

Mike Rockwood: No, tonight we’re the foreclosure doctors.  So questions are accepted on any topic related to foreclosure.  Ryan and I work full-time in real estate in Southern California and we work full-time in Load Modifications and we work full time in any kind of foreclosure workout.  We’ve been really heavily invested in the foreclosure, really for the last couple of years but have worked in it kind for part-time for about 10 years having bought rehab and sold foreclosures for many years.  But we’ve really become loan modification experts kind of by default.  I really needed to get loan modifications in order to hang on to some of my property when the values went so low and my own income dip with the housing downturn.  And so having gone through all kinds of foibles to get some good loan modifications, Ryan and his brother really bug me to put together a kit, a book and a kit to help others.  And so that’s what we did and it became a big success and really now for a year and half it’s been like a full-time job for us.  And so we work loan modifications all day, almost every day and other foreclosure workout solutions of course are a big part of that.  We do short sales from coast to coast.  We’ve done short sales in about 8 or 10 different states. Of course they’re mostly in Florida and in Arizona and California and in Nevada, the big foreclosure states. But we’ve also done them in Texas and Minnesota and Illinois and North Carolina.  So we’re short sale experts, we’re real estate experts, one thing we are definitely not is CPAs, so anything we say having to do with taxes, don’t take as tax advice, it’s just hearsay.  And anything we say that sounds like legal advice, don’t take it as legal advice, it’s just hearsay.  We’re not lawyers.  Don’t take what we pass on to you as legal advice.  Check with your local attorney for legal advice and pay him that retainer.  And so what we do every Tuesday is we share, we hit the airwaves at 6:00 o’clock, a little bit late this evening, sorry about that and we share with you latest information on foreclosure options.  I’m pleased to announce that in the coming weeks we have, today we were working on scheduling interviews with our very favorite mortgage lender, our very favorite bankruptcy attorney, our favorite forensic loan audit specialist and our favorite what we call a short “refi” specialist. That’s a new service that’s kind of becoming and going to be very, very popular.  So over the next month we’re going to have these 4 interviews on Tuesday evenings.  So I know you’ll appreciate that.  And you get an opportunity to speak with the experts and ask questions directly.  That’s really some valuable information coming your way.

Ryan Rockwood: Yeah I think that we have a very exciting product coming out.  We won’t talk much about products tonight.  It will be mostly and help and if you new to the call, we’re not afraid to tell you that our product may not help you.  So we’re always looking for more and more products and services to offer people that we can’t help.  And one of them is a product that for lack of a better name right now we’re calling it the short refinance.  But we’re very excited about it and here’s how it works.  Let’s your home has decrease in value significantly.  Well who’s has it, right?

Mike Rockwood: Right?

Ryan Rockwood: What’s going to happen here is this new product is going to enable an investor to come in and basically buy both mortgages from both banks or 3 mortgages or however many there are and they’re going to be able to structure in such a way that they’re going to get those mortgages so inexpensively that they’re going to rewrite the entire mortgages of the entire property to today’s value which is exactly what happens in foreclosure, it’s just that you won’t have to move out of the property and you will continue to own the property.

Mike Rockwood: It’s like it’s a real elegant solution that really has taken 2 years of intense foreclosure instances -

Ryan Rockwood: Yeah.

Mike Rockwood: You know just for all of us in the industry to really come to grips with. I mean it’s a service that was envisioned right from the start of this housing downturn.

Ryan Rockwood: Yeah it was so obvious that if you need it. But I think it’s not easy so I want to make some – it’s simple but it’s easy to get your mind around it.

Mike Rockwood: Right.

Ryan Rockwood: But so here’s how it works.  If your home’s worth – let’s say you have a mortgage of a million bucks, it’s worth $800,000, you pay this company to come in and it cost money.  Let’s say I don’t know what it’s going to cost but let’s say it cost $3,000. The company is – let me back up. The total mortgages are a million and the home’s worth 800,000 today. So you pay this company $3,000, they come in, they buy those old mortgages for pennies on the dollar which you and I can’t do ‘cause we don’t have that cash and they rewrite it to you at a mutually agreed upon rate.  Let’s say they wrote it to you $795,000.  You be trip, right?

Mike Rockwood: Yeah. So for the bank it accomplishes the same or better than a short sale and for the homeowner it accomplishes better than a short sale because it gets to retain the home and so for certain individuals it’s a really great solution. For those of you who want to keep your home yet you can’t because it’s over in cover there. There’s just too much mortgage on it.  So it could be a great solution, it’s going to be just another one in our arsenal that we’re going to be talking about and offering to our clients. So look forward to that in the future.  All right, we can move on to questions. I got half or I got like over a dozen of them in the last hour.  You want me to start in to some of these?

Ryan Rockwood: Sure.

Mike Rockwood: All right, did you tell people you get questions to us by sending them to questions@60-minuteloanmodification.com or you can enter them right on to that chat at the side of the screen there.

Ryan Rockwood: You know chat’s wanky but I did discover a little trick.  I’m going to get rid of this chat by next week.  That’s my goal is to get -

Mike Rockwood: What do you mean you’re going to rid of them?  What are you going to do?

Ryan Rockwood: I want to see if can see if you we could hire someone to write a chat program that is just maybe no login.  You just pick your own username and go.  You know we don’t need accounts and stuffs like that.

Mike Rockwood: Right.

Ryan Rockwood: So that we want it to be really easy but if you login, create an account and it’s sitting there – my reaction is to hit enter, blah-blah-blah to test it.  And it’ll say no, denied.  Just give it a sec even if it seems like a minute, it’s really horrible. But chat’s something that we communicate anyway, sends questions to questions@60-minuteloanmodification.com.

Mike Rockwood: Okay the first question I got this evening was from Cathy and she asked how long does take to get a short sale approve?  And Cathy that’s a really good question because very often it’s kind of up to the seller and up to the realtor.  And I say that because most of the banks particularly the bigger ones are so back up with short sales.  In fact Bank of America is so back-up that many of them we go through 3 or even 4 buyers before we finally get approval.  And that means 9 months, 15 months, Thursday we’re closing one that I’ve talked about before that is 2 years and 2 months old.  And this is our fifth buyer.  So it really takes – but also we’d had short sales that could take us a little as 45 days.  So it kind of to a very large degree has to with the seller and how interested you are in moving fast.  Some people are very interested in getting through it, getting it off their books minimally hurting their FICO score and then just moving on.  Other people could care less about their credit score, they’re upset about having lost all their own down payment and all the money they put in the home and they want to just live for as long as possible without paying the mortgage.  So it kind of has to do with your own attitude about it but somewhere between 2 and 26 months I think it would be a good guess.  I would say generally a normal short sale takes probably right around 6 months is about an average.  Then Patty asked, how about – good about short refinances.  You haven’t mentioned it much but it is in the notice of default book. Are these good deals and are they being done?  Well Patty that’s a very timely topic as Ryan just said we’re about to introduce a new product directed at short refinances.  It’s a nice combination between a refinance and a short sale.  So for those of you who are so far under water on your home that you do not have until now seen a way for you to able to keep that home.  This might be just the ticket.  So you’ve been thinking someday I’m going to have to short sale this.  Even if you gotten a great loan modification and month to month you’re okay, in the back of your mind you know that someday you have to deal with the fact that you owe so much more on that home that it’s worth.  Well this might be a great solution for you.  We call it a short refinance and we’ll talk more about it in the coming weeks.  Stick with us on this one.

Tony says, “How can I settle with my second mortgage?”  He says he owes $95,000 on to his second and he’s first is $450,000 and the home is now worth about 450.  So Tony says, “I’d be in great shape if I could just buy out the second.”  Tony the way things are going right now here’s the sequence of events.  You know it’s very similar to the process being use in the Credit Card Cure which is Ryan is, there’s a coop, online coop that Ryan started just a few months ago and it’s a process by which you settle your credit card debts.  And the settlement on home pretty lines up credits and second mortgages is really very similar.  The first thing to remember is the lender is not at all interested in negotiating with you for a darn long time until they’re almost pressured by good accounting practices to charge it off which is usually 5 or 6 months of default.  So you really have to be willing to take that kind of pain on your credit score.  You know so it’s 5 or 6 months of missing your payment and then you just initiate settlement just like you would on a credit card debt settlement. You just ask them if they would be willing to accept settlement.  And very often they are, very often they’ll begin negotiations at 90 or 75% of the amount owed and you of course are only interested in settling for about 7.5% of the amount owed around the country.  Of course this is going to become a more and more the “be way” to handle home equity lines of credit and second mortgages because after all that equity has evaporated and we just have to settle on it and move on.  So eventually, it’s going to become common practice and what we’re hearing around the country and with people who sharing their experiences with us is that currently lenders are accepting those kinds of deals because after all in a short sale they get very, very little like 2 to 5,000 max, sometimes only 1.  So what they seemed to be settling for is more like 15 to 25%.  So at this time because the practice hasn’t really gotten popular, hasn’t really been widespread used yet, those are the kind of rates to expect.  But that’s what you have to do, that’s the process and watch for more and more of that in the coming years ‘cause we have to settle on these mortgages that are no longer collateralize.

Tim says, “Is there any way we can be sure that we qualify for making homes affordable modification?”  And when I saw that question I grab, “Yes Tim, it’s absolutely 100% able to be predicted.  I can tell you with 100% accuracy if you qualify for making homes affordable mortgage.  First of all the mortgage must be on your primary residence, it must have been made more than a year and a half ago or more than a year ago exactly January first of 2009. The mortgage must have been made before that.  The payment on this mortgage must be more than 31% of your gross household income and the total mortgage amount must be less than $729,000.  If you meet those 5 criteria, you absolutely 100% without question qualify. Now that doesn’t mean it’s easy to get those loan modifications.  Really not every – I was about to say every working day but we don’t submit one every working day but certainly 2 or 3 every week, 2 or 3 every week we submit fully qualified, completely well-done loan modifications for the making of homes affordable program and it’s still takes us 4 to 8 weeks to get modifications.  And plenty of our clients are still waiting longer than 8 weeks.  In fact if – none of our clients do this but some clients who aren’t even late on their mortgage, they can take up to 4 months or more to get approve.  So it’s like it’s easy to get them.  There are plenty of tricks that we share on this program periodically. And that come of course in the kit that we buy, the do it yourself kit, the 60-minute Loan Modification Kit.  But that’s how you know if you’re qualified Tim.

Ryan Rockwood: You know these 100% certainty thing I think is a little bit misleading because there had been plenty of times when -

Mike Rockwood: Yeah.

Ryan Rockwood: Something comes up. Like I don’t know -

Mike Rockwood: Like your particular investor, the investor who owns your loan and in fact has not taken any tarp money and is not interested in modifying period.  Or there’s another one, this is a loan modification tip now.  Sometimes because of some statistical work that your lender has done either by zip code or by your past income or by your age group or whatever, they’ve determined that they’re not – they kind of [Inaudible – 00:18:17] the opportunities and they decline your loan mod application because they have figured that people in your zip code or people in your income range or whatever cure themselves or cure their own defaults.

Ryan Rockwood: Hey Kevin, it’s Ryan Rockwood calling.  How are you doing?  Good man.  Okay I’ll take your call right in the middle of our – you’re in our show.

Mike Rockwood: We’re on broadcast.

Ryan Rockwood: I was wondering if you wanted to talk about – I just got your e-mail for tonight.  Are you watching the show?  (Pause) Are you interested in talking about it now? (Pause) Yeah, well I just thought – we’re just going through calls and maybe you just happened to e-mail me this but I got to ask everyone to send me questions for the show, so I thought I’d give a call.  You want to take it later or should I put you on speaker phone? (Pause)

Mike Rockwood: This must be a good question. (Pause)

Ryan Rockwood: Yeah well no sweat. Why don’t I just give you a call back after the show?

Mike Rockwood: All right here let me take another question then from Mike.  He says, “PNC his lender,” okay this is one – this came up last week too.

Ryan Rockwood: Yeah, okay cool.

Mike Rockwood: PNC has invited to attend -

Ryan Rockwood: I will give you a call shortly.

Mike Rockwood: -a live event.  So his lender sent him a note said please attend a live event.

Ryan Rockwood: Okay.

Mike Rockwood: In fact they even delivered the invitation to his door.

Ryan Rockwood: Okay, that’s good.

Mike Rockwood: You will take Kevin live?

Ryan Rockwood: Yeah. Kevin?

Kevin: Yeah.

Ryan Rockwood: Okay.

Mike Rockwood: Turn the volume up.

Ryan Rockwood: Yeah, so I’ve got you here on the phone Kevin, we’ll just spend like 5 minutes on the phone if that’s cool with you.

Kevin: That’s great.

Ryan Rockwood: So I thought this would be a good one to take.

Mike Rockwood: Okay.

Ryan Rockwood: But basically we’ve got Kevin and he’s denied a program because he owes 720 and there’s 22,000 in delinquent payments so it kicks it just above the camp (?) program.  So he’s really between a rock and a hard place here and Kevin I assumed that you don’t have 22 grand laying around right?

Kevin: No, I don’t.  I wish I did but I don’t.

Ryan Rockwood: Yeah because that will be the ultimate.  Ain’t that a weird one?

Mike Rockwood: That is wow that’s crazy.  And who’s the lender Kevin?

Kevin: It’s well it was Countrywide now Bank of America.

Mike Rockwood: Bank of America and boy and you can’t get them to consider that – you know that’s not technically a jumble loan, it may even be Fannie Mae, Freddie Mac guaranteed. Do you know if it is?

Kevin: I don’t.  I don’t believe it is but I should look into that.

Mike Rockwood: Yeah because then that would unquestionably qualify you for making home’s that are affordable. Now do you think you have -

Ryan Rockwood: There must be some clause that you’ve never run into that says – you know what I mean? That says it’s -

Mike Rockwood: It’s a jumbo or it’s not.

Ryan Rockwood: Well no, typically I bet we use jumbo as a term but I bet the arrears has to be added into the 729 thing. In California is nearby.  So-

Mike Rockwood: You know who can help?  Kennedy can help us with the loan, the verbage but certainly if it’s guaranteed by Fannie Mae or Freddie Mac or even bought by them.  Do you know who owns it Kevin?

Kevin: I don’t. I mean I’ve got a feeling Bank of America does but -

Mike Rockwood: Yeah.

Kevin: It’s really ignorant of me.

Mike Rockwood: Yeah, no I wouldn’t assume that and I think that actually would be a great step for you.  Is just send them a qualified request and you want to know who owns your loan?  If they don’t tell you on the phone, they’ll tell you in writing if you just send them a qualified written request.

Kevin: Okay.

Mike Rockwood: And you just fax that in to them. And then -

Ryan Rockwood: And the other thing is have you talk about, no you’re current so you’re not going to be at the [Inaudible – 00:22:19] but how about the current value of the property? Well what is it approximately?

Kevin: Maybe 700, 650.

Mike Rockwood: 650, upside down.  So it’s 10% upside down.

Ryan Rockwood: It’s not wildly upside down and you’re local.  So we can short sale it for you if you want.  But I can’t remember, is this a pretty nice place, you really want to hold on to it?

Kevin: Well you know I bought in the idea that I might – yeah I can live here for awhile. Maybe make a little on it.  Now I’m not, it’s set up where I’m working home, I’m a photographer so I’ve set up perfectly for my work and live space.  I just don’t want to hassle but I don’t want to get stuck in this loan.

Mike Rockwood: Yeah.

Ryan Rockwood: Yeah, well the thing is, is that is he a 120%?

Mike Rockwood: This guy could – he’s about 110.

Ryan Rockwood: So it’s that, yeah.

Mike Rockwood: I don’t think he’s upside is in need for a short refund.

Ryan Rockwood: Not upside down enough. But -

Mike Rockwood: Yeah. He’s really caught in no man’s land.

Ryan Rockwood: Yeah, he’s right in there in the middle.  It’s an interesting question, what I think is happening is here – I mean of course we can – you got to determine when you want to get out.  Of course we can get you out of there and the irony is we can probably get all the past debt, all the taxes, everything forgiven and get you out – have you walk it will be free for you.  But the key thing is that in thinking about where you want to move, you not only have to think about where you rent you’re going pay but also rent you’re going to pay for workspace if you have to separate the 2 right?

Kevin: Yeah that’s the situation I have.

Ryan Rockwood: And then even if the rent is – I mean sure you can get less, you can get a place for a couple of grand to live but then add on the workspace then you’re back up that would equal – so I can understand your desire to [Inaudible – 00:24:15]

Mike Rockwood: Here’s another caveat. I think it’s really important that you find out about Fannie Mae and Freddie Mac because they also do have that – I’m forgetting what they call their program whereby they’ll – you know it’s a partial claim on their insurance of your mortgage where you can borrow from them at no interest. One year’s worth of payments and then you owe it to them when you sell the house. So that might be a good way -

Ryan Rockwood: Gosh that sounds really complicated.

Mike Rockwood: No, no it’s really not. No it’s elegant. And it’s a no interest so it’s a smart thing to do.

Ryan Rockwood: Okay, so how do we ask him to for – how can we get us some steps to forward?

Kevin: I just don’t know how to get forward. You know I don’t want to lose the place but I don’t want to be stuck in – you know I got a second mortgage.

Ryan Rockwood: Yeah.

Mike Rockwood: Yeah I think, okay, step number 1, is find out if you’re Freddie Mac or Fannie Mae. And Ryan I bet on the top of your head I bet you can think about. What is the name of that site that you go to find that out?

Ryan Rockwood: No, I can’t. Google it. So what you’re going to have to do if anyone’s on the call and they’re interested in that, you know I’ve tried that and –

Mike Rockwood: We had it on that-

Ryan Rockwood: Kennedy had sent it to us once.

Mike Rockwood: Yeah.

Ryan Rockwood: So then what does he do if he finds out?

Mike Rockwood: Yeah.

Ryan Rockwood: I mean you can call the bank too right? You can call and ask them.

Mike Rockwood: Yeah but it’s easier to go to the site.

Ryan Rockwood: Okay. [Inaudible – 00:25:48]

Mike Rockwood: Then it’s absolutely great news. There is some way for you to get and making homes affordable modification which is twice as good as any other modifications. So really want to fight –

Kevin: Go to the bank and research and you know looking at my [map (?) – 00:26:03] won’t they know if Sonny, Mac or Fevor.

Mike Rockwood: Yeah they should. They should be able to –

Kevin: So what I’m saying is that. If it work then won up their [Inaudible – 00:26:14] right?

Mike Rockwood: Yeah but honestly Kevin these negotiators or loan officers, lost mitigation officers, whatever they them, honestly you know 75% of them are just really poorly trained and give out misinformation.  So you really have to take responsibility for yourself because they’re just trying to get you off the phone and they’re just trying to grind through one after another after another.  So that’s the first thing.  Okay so let’s just say that doesn’t work.  Then how much is your interest rate currently?

Kevin: 6.2.

Mike Rockwood: All right so then you have the opportunity to get a standard modification not at making homes affordable but still would save you some 15% or so on your interest.  So that’s better than a sharp stick in the eye.

Kevin: Yeah.

Mike Rockwood: So I mean even if you don’t pursue at making homes affordable, even if they force you out of that into a standard one, you still have the opportunity to knock up some hundreds of dollars off your monthly payment.  And then lastly, like Ryan was saying when you should consider other options like maybe even you want to short sell it.

Ryan Rockwood: Okay.  Yeah so and Kevin I see your e-mails have been bounce.  You opted out. So you’re not getting our e-mails anymore.  Just so you know, if you me to put you back in let me do.

Kevin: Yeah, please do.  I don’t know why I did that.  It might have been an error.

Ryan Rockwood: Okay, yeah.

Kevin: I don’t know.  Maybe I felt really strongly about (laughing) loan mod. I don’t know why but yeah, put me back in there.

Ryan Rockwood: All right and the other thing you could do, if anyone else – Kevin just happened to make a purchase and he bought the kit and he’s going through it.  But anyone can just buy 30 minutes of time with us as well if they need support in this kind of thing and talking through stuff.  But for Kevin I think the thing that he wants us – I mean my Dad’s kind of talking out of a couple different levels. 1. You want to try punch holes in and get approve for half.  That’s the president’s plan.  And that’s what you got denied for, okay?  But if you get denied for that they don’t have the good sense to –

Mike Rockwood: Yeah.

Ryan Rockwood: Try to –

Mike Rockwood: Yeah that’s a given.

Ryan Rockwood: Try to qualify you for another in-house act modification. So make sure you move from that turndown into another one and I would pursue both at the same time. So in-house application, punch holes in the HUMP program and then this other thing that we’re talking about these programs where you could borrow and – would they be part of HUMP?

Mike Rockwood: Partial Payment.

Ryan Rockwood: Would that be part of HUMP.

Mike Rockwood: No.

Ryan Rockwood: Would that be independent?

Mike Rockwood: No that would be independent.  Okay it’s called a partial payment.

Kevin: Would it be in the bank if we’ve done it?

Ryan Rockwood: No it’s called a partial payment and if you do by chance find out that you’re Fannie May, Freddie Mac guaranteed, then you have the right to borrow from them at a real favorite rate. All of your arrears after 12 months of payments.

Kevin: Okay. I’m trying to borrow from the credit manager of [Inaudible – 00:29:36]

Mike Rockwood: Yeah it’s called a partial claim on their insurance policy.

Kevin: Okay.

Ryan Rockwood: Okay so Kevin, sorry I thought you got the e-mail about tonight. I thought you’re calling into the show. So I’m sorry to call you up in this early confusion but -

Mike Rockwood: Did we take him away from dinner?

Ryan Rockwood: Let’s follow-up in the next couple of days okay?

Kevin: Yeah that will be great. Thanks guys.

Ryan Rockwood: Okay, take care.

Kevin: Okay, bye.

Mike Rockwood: Okay, Maria asked, “My Dad advised me to just walk away and mail the keys to the bank. What’s wrong with this idea?” Maria there may be nothing wrong with the idea. It might be just a great idea.

Ryan Rockwood: Nice. Look at this. Scott wrote in and says, here’s how you look it up, fanniemae.com, freddiemac.com. Wait back-up, fanniemae.com/loanlookup, freediemac.com/mymortgage. Okay, that’s great.

Mike Rockwood: Let’s save that now.

Ryan Rockwood: Yeah, don’t know where but.

Mike Rockwood: Yeah.

Ryan Rockwood: Okay.

Mike Rockwood: So her Dad, Maria’s Dad says, honey just drive away from that house and mail the keys to the bank. What’s wrong with this idea?  And I say there may be nothing wrong with that idea.  It may be exactly what you need to do.  Some people just are not up to the task of foreclosure workout with the bank.  If that’s you Maria and you’re terribly upside down on this property.  Like I mean for those of you who are outside of the hard hit areas. Some of our listeners, some of our clients are living in homes that are 50% or more upside down, hundreds of thousands of dollars upside down.  Maria if that’s your situation, like if you’re up in Las Vegas, if you’re the inland empire in California, if you’re in central valley in California, you could very well be living with that kind of a burden.  And in those instances it may be best for you to drive away and mail those keys in.  Here’s what’s wrong with the idea though Maria.  It leaves you vulnerable to deficiency judgments. It leaves vulnerable to further lawsuits because it doesn’t tie things up neatly for you.  I advice instead, you know to hang in there, stay with the property, see it through to a short sale.  A short sale will take a little longer, you can’t just drive away but honestly you can live there free of charge during the short sale and it’s just better for you because you don’t have an “F” the foreclosure on your credit report.  That foreclosure “F” is just as bad as the BK bankruptcy.  It stays on your record for 7 to 10 years and it really does hurt your credit score for 3 to 4 of those years.  So you can avoid the foreclosure and you can be present and negotiate a good settlement of your first and second if you have a second mortgage, instead of just leaving it up to the bank to just dispose of your property and then decide if they’re going to sue you for the difference, any shortfall.  So it’s much better to hang in there and go through the short sale process, much, much better there.

Ryan Rockwood: Let’s burn through some of these.  We got a lot of questions.

Mike Rockwood: Okay.

Ryan Rockwood: Kelly writes in, we’ve been trying to modify our first mortgage since June of ’09.  We stopped making our payments in August.  Yesterday we finally received a trial modification package.  We grow 7400 a month, they gave us a new payment of $2500 a month –

Mike Rockwood: 31%.

Ryan Rockwood: This includes an escrow of 350%.  That payment doesn’t seem close to 31% of our income, she says.  The letter can’t seem to tell me where they got these numbers from.

Mike Rockwood: That’s 31%.  That’s exactly 31%, isn’t it?

Ryan Rockwood: Well, I believe so as well.  She thinks that 31% should be $2300.

Mike Rockwood: Okay.

Ryan Rockwood: Yeah.

Mike Rockwood: Yeah, yeah.

Ryan Rockwood: And in this case, I mean here’s the point Kelly, where are you really trying to go with this.  Because is that – I really doubt that that -

Mike Rockwood: 200 bucks.

Ryan Rockwood: 200 bucks is going to make the difference, right?

Mike Rockwood: Right.

Ryan Rockwood: Maybe it is.  But what you’re probably seeing is the required escrow or something like that.  You know what I mean?

Mike Rockwood: Yeah.

Ryan Rockwood: And so what do you do next?  Accept and pay and try to negotiate more or walk away.  Now I think it really has to do with whether or not did you get the making homes affordable plan?  If you didn’t there’s very little, if you did there’s very little to negotiate, if you didn’t, a possibility of negotiating.  But whether or not you accept and pay or walk away, doesn’t seem to me to be any sort of relevance as to this deal because I mean the question is can you afford it?  Can you live for less elsewhere?

Mike Rockwood: That’s good.

Ryan Rockwood: If that’s the case, if you can’t afford it-

Mike Rockwood: Yeah, then who cares.

Ryan Rockwood: Whatever. If you-

Mike Rockwood: And if [Inaudible – 00:35:00] area are 1500, then that’s dumb.

Ryan Rockwood: If I say 1500 and you’re going to pay 2500 here.

Mike Rockwood: Yeah, it’s dumb.

Ryan Rockwood: Yeah, I see what you think. So what else?  Can you live somewhere else for less?  Is the other question.  The next question I guess I’d say is how much is the home worth?  You know those are the 2 kinds of – if you pass the first one, yes you can afford it. And you pass the second one, it says –

Mike Rockwood: That’s a reasonable monthly payment for housing.

Ryan Rockwood: Yeah and close to what you could – okay so what about the problem?  The problem might be that you’re 100 or $200,000 underwater.  Do you want to solve that problem now or later?  Now that’s really up to you.

Mike Rockwood: Okay.  I hope you got this recorded.

Ryan Rockwood: I wish you kind of put that together rightly.  I wish.

Mike Rockwood: There some logic there.

Ryan Rockwood: We created every week.  Okay,

Mike Rockwood: Okay let me take Tom’s question.

Ryan Rockwood: Let me burn through these guys because they’re just e-mailing in.  I mean these guys may not be tuning in.

Mike Rockwood: Well they said they would.

Ryan Rockwood: Well…

Mike Rockwood: Go ahead, okay.

Ryan Rockwood: Okay we’ve got Maria B.  has submitted a form, fax them to us (pause)

Mike Rockwood: Okay, Tom says, I was trying to get a short sale done but it did not work out and the bank took the home last week.  Now we are living here wondering what’s next, what’s going to happen next?  Tom first of all, condolences.  Sorry you were trying to get that short sale done.  That’s certainly would have been better for you.  Now you have the additional problem of recovering your credit score with the foreclosure on it.  They do kind of double the time it takes you.  Now you’re living in a home wondering what’s going to happen next.  Well here’s how it’s going to go.

Within a couple of weeks, you’ve been there a week already, within a couple of weeks, a local realtor is going to contact you and let you know that he is representing the bank in the REO sale of the home.  And he wants to know what your intentions are.  And then you (clears throat) well have to tell him what your intentions are.  He is probably empowered to offer you 1 to $2,000 in cash for keys.  Money to help you move out and kind of ought to encourage you to leave without damaging the property.  Now I always advice clients that are in this situation to ask for whatever it will take for you to move and that’s usually more than 1 or $2,000.  It’s usually 3 or 4 and honestly depending on the neighborhood that you’re living, you may be able to get 3 or 4 or more.  But it’s going to be a couple of weeks, when they contact you they are also empowered to give you up to 30 more days.  And these are kind of – these are not legal mandates but these are kind of common courtesy as to what’s been going on.  I see you’re from California, so this is what’s been going on in California now for a couple of years.  So you’re going to be contacted soon.  That realtor will want to list the property and want to start showing it.  He’s going to want you to get out as soon as possible.  He’d be willing to pay you one to 2,000 bucks to move within 30 days.  That’s what’s coming your way.  If you decide not to take that and decide to squat, illegally possess the property and have to be evicted, you’re looking at probably a 6-week, are you good?  This one’s fading.  A 6-week to 3-month process that will involve the courts and will add to your credit problems because now you’ll have an eviction showing on your credit reports, so you don’t want to do that.

Ryan Rockwood: Okay, we’ve got some good questions here. Bill asked, “I have 5 mortgages with Wells Fargo and Rental Houses.  I plan late this month to motivate them to accept the loan mod would you recommend I apply for all of them at once to stagger them?” And I got to say Bill that all at once would be fantastic and there’s nothing wrong with it, I don’t think but taking it from us who do this a lot.

Mike Rockwood: Yeah.

Ryan Rockwood: Like it is really a mind jumble.

Mike Rockwood: Sounds easy.

Ryan Rockwood: Yeah.

Mike Rockwood: It sounds easy but you always seem to -

Ryan Rockwood: You can report back.

Mike Rockwood: Yeah.

Ryan Rockwood: We are retarded or it is hard. What is it to you?

Mike Rockwood: (Laughing) Also if they’re all with the same bank keep in mind that they are owned by the same investors.

Ryan Rockwood: It is so tough.

Mike Rockwood: So they get confuse. You get confuse.

Ryan Rockwood: I don’t think you should wait until one get’s approved to move on to the next.

Mike Rockwood: Gosh, no.

Ryan Rockwood: But I think that you should thoroughly get one going completed, submitted, acknowledge.

Mike Rockwood: Yup.

Ryan Rockwood: And then start with the second.

Mike Rockwood: That’s right. I agree. Soon as it hits the negotiator, soon as you assign the negotiator, you’re going to just feel so much more comfortable.

Ryan Rockwood: And you get it back and it’ll probably kick back a couple of times, if you’re like most people, incomplete this that, need this, they’re happy with that.

Mike Rockwood: Hopefully it’s not like most people. Hopefully it’s paying attention to our kit.

Ryan Rockwood: Well you know you might not even be a member.

Mike Rockwood: That’s true. You should also.

Ryan Rockwood: Buy the kit first.

Mike Rockwood: You got to buy the kit.

Ryan Rockwood: You’re dumb if you don’t.

Mike Rockwood: (Laughing)

Ryan Rockwood: Okay, Cindy asked, “I owe 650 and the house is worth is 450 right now.

Mike Rockwood: Okay.

Ryan Rockwood: I can make the payments without issues but my rates are high.  Is the only option stop paying it and jump in the next route with everyone else.

Mike Rockwood: Yeah.

Ryan Rockwood: See it seems short right now that we have this kit.

Mike Rockwood: On the math, she’s 33%.

Ryan Rockwood: Way over a 100.

Mike Rockwood: She’s good.

Ryan Rockwood: Yeah. So,  pretty much though currently after our meeting on Thursday we may have a new product. It will be a big, big deal.  But we may have a new solution for you but as of right now, absolutely that’s all you can do.  Okay?  But let’s talk later on and hopefully we’ll have something really -

Mike Rockwood: If you really want to hang on to that house, you really want to look for some long term solution. It’s either a principle reduction or more likely – like at least in the next couple of years.  What we right now call in a short refinance.

Ryan Rockwood: Okay, next question.  You know just to say the first name just so you notice Anthony. Anthony asked, “My payment is $3600, no taxes or insurance.  I’m 2 months behind that mortgage and was out of work for 7 months.  I think I talked to this guy on the phone today.  Their deal was to add 10 years to my loan and add $333 to my payment but this does not seem like a loan mod.  Is it?  Do I still have the ability to get help on load modification?”  It doesn’t seem like a loan, it seems like a repayment plan.

Mike Rockwood: It’s a repayment.

Ryan Rockwood: Well you know what though, it’s not though.

Mike Rockwood: Isn’t it?

Ryan Rockwood: Because they added the term that makes it a modification.  And so it technically is a modification and it could prohibit your ability to get another modification.  If nothing else it may require you to wait 3 months or something like that.  You know before you apply again.

Mike Rockwood: But gosh if you missed only 3 months, so it’s like 12,000 bucks in arrears. That’s not so bad.  I wonder why, Anthony did you -

Ryan Rockwood: He was out of work for 7 months.

Mike Rockwood: Is this a property that you live in?

Ryan Rockwood: “I am behind 2 months.” Maybe he was behind.

Mike Rockwood: Yeah but if this is a property that you live in, you really want to go for the goal in terms of modification.

Ryan Rockwood: I think this is a really nice guy that I was talking to about the difficulty of – the basic difficulty of deciding whether or not to go for bankruptcy or loan mod or whatever.  And bankruptcy is attractive because it wraps everything up and no matter how poorly and inexpensively and lame it is, it handles everything for you.  I mean he’s got credit cards.  But anyway, the deal was this lawyer said – remember he said, “It stinks.”  But here’s what I got to offer.  You pay me 5,000 bucks or something like that.  We’re going to liquidate everything you’ve got.  You’re going to lose your cars.

Mike Rockwood: Yeah.

Ryan Rockwood: I say how are you going to go back to work then? You paid for these cars. So how do I get to work then?  And it’s going to take 5 years and we’re going to wipe out the second mortgage completely.

Mike Rockwood: The second and 13^th.

Ryan Rockwood: Yeah. We’re going to wipe out the second mortgage completely.  We’re going to write down your first mortgage 100 per end.  And get rid of $30,000 for the credit cards.  And I said well credit cards you could do yourself, your second is totally toasts so you can negotiate that on your own too.  But it reminded me that we have to do a program for that too because people are in need.  You can’t just say to someone go negotiate your second debt.

Mike Rockwood: Right.

Ryan Rockwood: Okay. But bankruptcy attorney can.  You could say and what he’ll do is just do the same thing that you could do.

Mike Rockwood: Right.

Ryan Rockwood: You know an attorney so anyway it’s really a tough week.  Good luck to you there.  Let’s see if there was a question that we have no answer for it.  Do I still have the ability to get help on a load mod?  Who can say exactly without getting in on it and tearing it apart and -

Mike Rockwood: Yeah.

Ryan Rockwood: we’ll charge a lot of money but -

Mike Rockwood: You got to tell us more information.  If this is the house you live in,

Ryan Rockwood: Yes, it is I believe. I mean it’s the same.

Mike Rockwood: So you really have to try it.

Ryan Rockwood: It’s worth it.  I think that’s what I said earlier.  I said it’s worth a try.  I don’t know if I can – you decide.  You can pay us a bunch of money, we can figure it out in advance, yes or no or you could just try.  And without a lot of money Anthony I was trying –

Mike Rockwood: I recommend that you hire us for 20 minutes or 30 minutes to talk one on one with you on the phone.  You do that by just going to our 60-minutemodification.com

Ryan Rockwood: Actually on the site that they’re on, forward 60-minute.com/live2 is where you should be.  If you’re watching this video, there’s a schedule button right above it and right below it. And you can schedule right there. You can pick the product, you could buy it, [Inaudible – 00:45:57]

Mike Rockwood: Or you can schedule time with us to talk about any kind of foreclosure workout option you want.  But I think it really needs to get some clarity. You’re getting back on your feet financially but honestly, it’s important to take advantage of the fact that you’ve been on your butt that they’re on your back.  You know you’d had a tough year and lots of time so see people struggling back they kind of get there finances back in order and then they realized now I don’t qualify for any assistance.  Now I don’t qualify for a loan modification.  I have too much income, why it was me?  Why the heck didn’t I apply for this modification 6 months ago?  So honestly I think you really want to evaluate your situation while you have problems because it may be the best time to just deal with it.  You know take all the pain at once and deal with it.  Okay?

Ryan Rockwood: Okay Cindy got a question.  She said, “I called BMA again and here’s what the representative said,” sounds like she’s picking something up there.  Like I missed an e-mail there something but here’s what it said.  “I was denied because I was unable to get a loan mod equal to 31% of my monthly report income without changing the terms of the loan.”  It doesn’t really make a lot of sense ‘cause that’s what they were asking them to do. It’s change the terms of the loan.  “I have an interest only of my loan for the first 10 years and fix.  They also mentioned that I’m current with my payments.”  This was a nice gal.  She called me up the other day after working so hard on her for many months and then she revealed to me that she’s still current.  And she got her note.

Mike Rockwood: And that’s shame, shame, shame Cindy.

Ryan Rockwood: Yup, that is.

Mike Rockwood: Don’t you want to be treated with respect.

Ryan Rockwood: Too good a human being.

Mike Rockwood: Default (laughing).

Ryan Rockwood: (Laughing) she said, needing to be able, I didn’t really applied, can you please help.  Can we go over my new month budget figures?  Yes, of course we can go over it.

Mike Rockwood: Schedule them.  Hit that schedule button Cindy.

Ryan Rockwood: (Mumbling) you know what.  She said they didn’t need any help so maybe she didn’t meet for the show either.

Mike Rockwood: Okay.

Ryan Rockwood: I think I hit a couple of random ones there.

Mike Rockwood: Okay, Paul asked.

Ryan Rockwood: Good.

Mike Rockwood: Do lenders always state clearly that they will accept a short payoff in full?  How can we know if the bank will later come after us for any short fall?  That’s a great question Paul and by and large across the country, almost without exception on first mortgages, lenders are real clear about you know it says right in the acceptance letter this is accepted to this payment in full.  It’s much less certain on second mortgages around the country.  In fact just this morning we got a settlement approval offer from Chase that made it very clear that they want to retain the right, reserve the right to be able to pursue collection of the forgiven amount, (scoffs) not much of a forgiven amount.  So in other words they’re accepting partial payment.  They’re going to release their lien and allow the sale to go through but they are going to pursue collection of the remainder of remaining amount.  So then the homeowner has to make a decision do I want to take that risk that they’re going to pursue me for it or do I want to refuse the whole thing and let it go to foreclosure?  But then they also have that opportunity, the lender would have the opportunity to come after him.  So you don’t have a lot of options but we always do, is we get both approval letters or we get the approval letters and we get our clients to speak with our local attorney every time short sale goes into escrow.  So during that 30-day period before we close escrow, we get a local attorney’s opinion about the wording and the acceptance letters and the vulnerability to further law suits so that when you accept it you really know what you’re in for.

Ryan Rockwood: Yeah right.

Mike Rockwood: You got another one?

Ryan Rockwood: No. That’s it.

Mike Rockwood: I got one. Taco says, “You mentioned something last week about expecting the home to be vacant, to be foreclosing, my husband and I are closing next week on a home that is rented and it was deep in foreclosure.  It’s a short sale purchase.  How can we get assurance that the renters will move?”  You can’t.  “And if they don’t what are our options?”  Your options are not pretty – you and your realtor should have included that in your offer, that the home be vacant 48 hours prior to close and then your realtor should have gone and taken extraordinary measures to make sure that that happened and to make sure that they couldn’t come back into the house.  Unfortunately, if you didn’t stipulate that in your offer, the sellers really do have the right to – the renters have the right to be in the house until it’s transferred.  The seller in case of a renter, is on the hook to deliver the home vacant but if it’s not vacant, it ain’t vacant then you could have some squatters there and you have to go through the eviction process which can be lengthy and they can do damage to the property and you are the new owner.  So you may inherit the damage property some months later than you thought you would.  So it’s not good.  I would soundly alarm with your realtor right this minute and tell them you need some comfort that this deal is going to close the way that you expected it to.

Ryan Rockwood: All right, we better wrap it up.

Mike Rockwood: Okay.

Ryan Rockwood: We got Chris says, “Thanks for the call.”  And we have like at least 3 other people e-mail us that link.  So I think we should just get to – check on your Fannie Mae maybe.

Mike Rockwood: Good.

Ryan Rockwood: Somehow we got to get our clients running these calls.

Mike Rockwood: They know what’s going on.

Ryan Rockwood: Yeah.

Mike Rockwood: They know what’s moving to change.

Ryan Rockwood: Yeah. All right, so anyway, thank you all so much-

Mike Rockwood: Thank you everybody.

Ryan Rockwood: -for joining us. Congratulation on getting a week closer to get rid of that -

Mike Rockwood: We’ll talk to you next week. Watch for the interviews that are coming up. And for those of you who are clients we’ll see you on Thursday night.

Ryan Rockwood: All right, see you later.

Mike Rockwood: What happened to our theme song this week?