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Under the current government rules, loan modification programs are open to those who are experiencing some sort of financial hardship, but still have enough income to be able to make payments under a new agreement. These new agreements are more affordable, and should help more people stay in their current home.

Because certain qualifications have to be met, you will need to be able to prove that you do, indeed, qualify. Once you have that proof, you will find that the amount you can save during the short-term and long-term can really add up.

You can try to go through the process on your own, and a lot of people do it that way. But, be warned that lenders are still going to do whatevr they can to make as much as they can. That’s why it makes sense to get somebody that knows what they’re doing to help you.

Lawyers, and services set up to help people just like you are the two main options. There are several steps that need to be taken, and they can make it much easier. For example, how many hardship letters have you written in your lifetime? Chances are you haven’t written any. And that’s one of the first steps. Letting somebody that writes such letters for a living write yours, and the odds of you getting the best deal go up by quite a bit.

Some people feel like they are not keeping their word, or somehow less of a person by trying to get their current mortgage redone. At the same time, loan modification programs were created to have a positive impact on the overall economy. To put it another way, there is nothing to be ashamed of. Take advantage of these offers while they are still in force.

Though it may seem like a hassle, you can get help when trying a loan modification program. It is technically possible to do it yourself, but if you can get somebody that knows how to deal with lenders, you could get an additional 1% knocked off of your new deal. While 1% doesn’t seem like all that much, over the course of your new loan, it can add up to tens of thousands of dollars.

Whatever you ultimately decide to do–doing it yourself, or getting someone on your side to help you do even better–make sure you get started as soon as you can. The peace of mind will start right away and you will be well on your way to staying in your home.

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Ryan: Hi and welcome to the call. This is the 60 minute loan modification insider secrets teleconference series. It’s time to begin. And I thank you all for joining us. We’re just going to get started, jump right into it right now. This is the first in our new series of calls where we’re going to have shorter calls, more often, try to take more questions and basically help more people. We’re here the beat the bank, save your home and help you escape bad debt forever. My name is Ryan Rockwood. And as usual I’m joined by my father and business partner, Mike Rockwood, on today’s call. Before we get started today couple of quick announcements.

Announcement number one. Our website is under construction right now so please excuse any errors that come up on the site. Everything will be back to 100 percent within a day or two. Announcement number two. If you’re a client with 60 Minute Loan Modification, if you purchased one of the kits, remember that you can get email support from our team anytime by emailing help@60minuteloanmodification.com. If you’re not a client please go to our website, 60minuteloanmodification.com, and click on products to see our new and improved offerings. Maybe don’t do it till tomorrow. For $275 this is by far the greatest value you’ll ever find and of course it’s backed with our killer 100 percent guarantee.

Announcement number three. We are now doing these teleconference calls every Tuesday and Thursday. We want you to join us as much as possible until your loan gets fixed. That’s why we’re here. So every Tuesday and Thursday we’ll deliver about 20 to 30 minutes of insider tips and strategies and we’ll take questions from you to help you fix your mortgage fast. You can email your questions to help@60minuteloanmodification.com or just speak up at times throughout the call. But thank you so much for joining us. The real winners these days are people who are not hesitating to take swift action right now. So I encourage you to flip off the TV, shut down your computer, unless you’re listening on the computer, get down and dirty with us, talking about loan mods here for the next 45 minutes or so. Okay? Let’s get on with today’s call, How I Beat the Bank. And of course I’m here with my father, Mike Rockwood.

Mike: Hi, everybody. Hey, Ryan, I just wanted to comment, before we get started that I’m really pleased with our email response rates and I’m disgusted with our phone response rates and we haven’t got a fix for our phone response rates yet so I really encourage everybody to continue to email us with questions. We’re really getting good at getting back to you fast and when I say good, we’re just starting to dial it into where it’s just two or three hours before we get a response to you. We want to get very, very responsive because I know it’s frustrating when you are working on your modification you want an answer right now so that you don’t have to put it aside and finish it up later. So we’re working to be really responsive to you and right now email is working quite well.

Well, the banks are getting better and better and more and more organized. I tell you, since the Obama plan was put into effect on April 4, I don’t know if it’s the money they’re throwing at it or what but honestly the banks are getting more and more organized. They’re overwhelmed, of course, and periodically all of the large banks have had to go to temporary services just answering their phone because they’re so overwhelmed but they are getting very organized and very disciplined and they’re starting to cut corners like crazy so let’s take advantage of that. They’re starting to use a lot of statistics in their evaluation of your qualifications so it moves much faster and so to the extent that we can understand what those statistics are, of course, we can use those to our advantage. We’re always looking for ways, unabashedly, to be on your side. We’re the ones that give you the inside tips to get the good loan mods. We are not working with the banks. We are not compensated by the banks. We work for you.

Ryan: Here’s the thing. A lot of people call us and say well, I’m concerned I don’t qualify for a loan mod. And I mean, we understand that but the bottom line is if you come to us we will qualify you for a loan mod. That’s just the stance we take. Now, if you don’t want to do a loan mod that’s your business. But the bottom line is we’ll torture the numbers, we’ll do whatever it takes to demonstrate that you get a loan mod and so that’s just the way that we encourage people to adopt our attitude.

Mike: Here’s a good example. About half an hour ago, Ryan and I got off of a one hour conversation with a client, a new client, who is grossly overspending, living way beyond their means and has just come to realize it and was seeking our help to see if they could get a loan modification. Well, as we went through the budget it was clear. I mean these guys weren’t even close. I mean, they were like, was it $6,000 a month they were overspending their budget, Ryan?

Ryan: Well, I think you should back up a little because most people will think well this means that they have too much money to qualify for a loan mod and can’t get a loan mod.

Mike: Okay, so the situation is if they had to put together their own budget, called the lender and read off to them the things they read off to us they not only would not qualify for the loan modification — not only would have been no, it would have been hell, no. And we’re sending a vice squad out to figure you guys out. You’re in real trouble. So we counsel them about discretionary items. You know, your $500 golf membership. The bank will disallow it. They consider that discretionary.

So if you want to share that with them that’s your thing but we gotta explain to you that they consider that discretionary. And they need to see on your budget how you make it every month. And whether in fact you make it by using your credit cards or spending money that you borrowed from your 401k or spending down your inheritance, whatever it is, what they’re interested in how do you make ends meet with the income that you’ve got?

Ryan: What I want to stress, though, is that, and I don’t think that you’ve been clear enough just now. Most people come to us and think they don’t have a hardship and make too much money to get a loan modification.

Mike: Very true.

Ryan: And we have problems proving they have enough money to get a loan modification. So does that make sense to you? In other words, the problem is not showing they don’t have enough money to get a loan modification. The problem is making sure that we show enough income. So in this situation what we’re doing is helping our clients refine their budget to the sweet spot and the sweet spot we’ve talked about earlier is you want — when everything’s said and done and you know, in the books and on the kits we go through this very clearly for you. But when everything’s said and done, the amount that you earn every month and the amount that you spend every month has to be within $500 of positive and negative. Is there a clear way to say that?

Mike: No, that’s a perfect way to say it. That’s the cash flow measurement. It needs to be plus or minus $500 every month and then of course your debt-to-income ratio needs to be within the guidelines of the bank which are certainly less than 75 percent of your monthly income should be going to debt support and the bank is most comfortable if it’s right around 55 percent.

Ryan: I say forget about worrying about debt to income ratio. At least until you’re really fine tuning your budget. Mostly worry about what’s coming in and what’s going out every single month and you need it to be around negative $500 to positive $500. That’s counterintuitive to most people. I know it was to me. I mean, I think that if I’m going to qualify for a loan modification I should be $3,000, $2,000 negative, however much I’m going to need the loan modification. Okay.

Mike: That’s right. That’s what most people think, yeah.

Ryan: And I don’t know, logic doesn’t quite play into it here. This is just the requirement, okay.

Mike: The underwriting criteria.

Ryan: Yeah, so don’t try to make too much sense of it. The other thing is we sat down with some people recently and why wouldn’t they do this, why this, this doesn’t make sense. Man, you got me, but we can’t re-evaluate or psychoanalyze the entire U.S. banking system. You know, all we can do is really try to manipulate it for our benefit right here in a good way because those are the requirements. Kind of like a driver’s test. You can’t pick.

Mike: I also wanted to draw everyone’s attention to that experience we had last night, Ryan, where we were interviewing that one client who was — you know, there can be a great deal of pride or a great deal of, I guess it’s pride, kind of wrapped up on how much you earn and how much your FICO score and all that stuff and sometimes, particularly guys, I got to admit, have a hard time admitting that they have a hardship.

And so it’s kind of a cat and mouse game and so a lot of times with clients we’ll have to say listen, do you want us to help you look for your hardship or not? Because some guys will say, I’m earning pretty darn well, can you help me look for, see if I qualify for a loan modification. Yet they don’t’ want to really be open to figuring out if they have a hardship because they have some kind of a pride thing about that. So, just another tidbit.

Ryan: Yeah, I don’t know, the entire economy is in the toilet. Come on. You know what I mean.

Mike: Yeah, get real.

Ryan: What can you do? But anyway, thank you all for joining us here. What we’re going to do is back up a little bit. We have people joining us at all different stages in the loan modification process and so what we’re going to try and do on each of these calls is cover something a little bit different so that you can join us for, let’s say, I don’t know, two or three weeks before you hear stuff repeated.

Mike: Here’s the design of these calls goes like this. What we would like to do is cover all the chapters of the workbook in about three sessions. So we’ll cover a couple chapters tonight and a couple chapters on Thursday and a couple more next Tuesday so that someone receiving the kit, like today, can tune in and get off to a really fast start. And the questions that we take from you need not be related to those two chapters but we want to be sure that routinely we’re going over the basics of the workbook because it’s really, you know, the paint by numbers simple, do it yourself guide for loan modifications so we want to keep, you know, kind of preaching form the Bible.

Ryan: Okay, and if you don’t have the workbook or something like that don’t worry about it if you can’t afford it or you’re not going to buy it or you’re having us do it for you. You don’t have the workbook for you. We’re doing your loan modification, you don’t have the workbook. Don’t worry about it. It’s general interest stuff. It’s pretty logical and you take some notes and if you have any questions you can always email help@60minuteloanmodification.com. Okay, Dad, chapter one of the book is I did it and you can too. It’s your own personal story. Why don’t you tell us your story about how you got into this personally with your own loan modifications in ten minutes or something.

Mike: I won’t belabor it because I know many of you have heard it or you got the 60 Minute Loan Modification Secrets CD but let me just quickly run through my experience and I hope it’s helpful to you and encouraging to you. Last summer my, working as a realtor, my income took a pretty significant dip and I had at that time owned five rental properties as well as my own home here in Torrance, California. And so on all of them, really, I was, because my own income was so hosed up I was in, you know, in danger of defaulting on the mortgages and losing them. And so what I plotted to do was to approach IndyMac, who was the holder of the mortgage on my own home, and ask them simply if I could take a month off without getting a ding on my credit. And I thought it was a simple enough request and innocent enough and would have only cost them one month’s worth of interest. Would have cost them a few thousand dollars, but no, they wouldn’t allow that.

Never heard of such a thing. Made me feel like a total loser. And told me that they didn’t have any programs for a guy like me and I said, well, wait a minute. I’ve been, you guys are on the ropes. In fact the federal government just took you over. What are you talking about, there’s no programs for me and they said well, you’ve never been late on your mortgage. So I said, okay, I’ll call you next month and when I called them next month I said okay, now I qualify for your programs, right. And they said right. So I went on to negotiate with them a pretty dramatic reduction on my first mortgage on my own primary residence and I always recommend to people that that’s the best place to start.

Teleconference continues here:
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In 2005 I purchased a long neglected home with big dreams of rehabbing it for my own. It seemed like a sweet real estate deal – and it was – until the U.S. housing market collapsed. Unfortunately, by that time I had already sunk $90,000 into improvements, so I resigned myself to riding out the housing downturn. At least the home turned out lovely and my wife of 34 years was pleased.

If only it were that simple! Not only did the housing crash wreak havoc on my home value, but it also tore a chunk out of my primary monthly income. I limped
along financially until the summer of 2008, when I was hit with a particularly slow period in my work.

Suddenly it seemed financial calamity was upon me! It was clear I couldn’t meet my obligations. I racked my brain for a solution: “Where could I cut back? What is the absolute minimum I could pay? Do I have any stocks or investments to sell?” IndyMac Bank held the 1st Mortgage on my home. So, being the ever conscientious mortgagee, I swallowed my pride and called up IndyMac.

Needless to say, IndyMac was less than sympathetic. More bluntly, my request met with outright rudeness. Now none of this came as a particular shock to me, and it could have simply ended there. But I knew that IndyMac itself had failed. It had recently been taken over by the government (in other words, my tax dollars were keeping it open). Mindful of this, IndyMac’s stance toward me seemed more than a little hypocritical!

I batted away their dismissal and pushed forward to one supervisor after another. I found out they did, in fact, have programs that were designed to help. Happy ending? Nope, I’m afraid not. As it turns out, I didn’t qualify because I had been paying my mortgage on time! Talk about getting kicked while you’re down, huh?

At this point, I was furious! My attitude toward my lender changed. As it turns out, it’s better to ask for forgiveness than permission, so I decided not to write that month’s mortgage check. I told them I would call back in 30 days once I qualified as “late.”

It made me angry that an honest, regularly paying homeowner could not get assistance when the lender itself (and all of its executives) had already received significant assistance with (my) tax dollars.

The following is an excerpt from Mike Rockwood’s Mortgage Modification Program

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15 March 2009 l Clear Credit Mastermind

Ryan: This is the Clear Credit Group Mastermind Call. Welcome to our monthly teleconference. We’re here to beat the bank, protect our assets, and clean up our credit for life. Thank you so much for joining us today. We have a great call. We’re going to talk about a lot of exciting stuff. First, let me give you a quick overview.

I’ve got a special announcement and then of course we’re going to hit the latest in loan modification news, including the President’s housing rescue bill. We’re going to go straight from there into talking about real events on the loan modification front lines, including what we’re doing and what our clients are doing.

Next, we’re going to talk about seven critical secrets, absolutely current secrets, that we’re learning in loan modification and just in the process of doing them, and that’s actually a handout, so later on I’ll provide you the url where you can jump on and you can keep a copy of that. Okay, then we’re going to talk about newsworthy stories from around the country and we’re going to wrap it up with questions and answers. Okay, so everyone should have lots of time to get all their questions answered. Let me jump right into it, we’ve got a very special announcement.

This is really neat, we’re really excited about this and I hope everyone will take advantage of it. I hope you have a pen handy. Monday the 16th we’re offering a very special, free of charge, call-in day. And here’s how it’s going to work. From 12:00 to 4:00 p.m. on Monday the 16th you can call Mike personally and ask any questions you like about loan modifications, short sales, foreclosures, anything else you need help with. Now please note, each call is limited to a maximum of ten minutes, and actually we have a live event workshop that evening.

And so please respect our time on this offer. Here’s how we’re going to do it. Kind of like a radio call-in show. If you get a busy signal or voice mail, just keep trying. Don’t leave a message. Just keep trying. And we’ll get to you just one at a time. The call-in number is 310-602-7380. 310-602-7380. Now I kindly ask that you do not use this number at any other time than on the 16th, tomorrow, during 12:00 to 4:00. That’s our private office phone number, we don’t give it out, and I’ll give it to you one more time right now. It’s 310-602-7380. And I should mention that is for members of our Clear Credit Mastermind Group only.

Okay, let me back up a little. My name is Ryan Rockwood. I’m here with my father, expert and author Mike Rockwood, author of 60 Minute Loan Modification. We’re business partners here and we live in Southern California. We’ve been helping people all across the country do loan modifications, short sales, all kinds of things and right now we’re really focused on loan modification. It just seems like the best solution for the majority of the people, the best way that we can help people. In the news this week obviously we had a huge, huge, news week with the President’s bill. He basically announced $75 billion that we’re just going to throw at this housing problem.

And so, from our perspective, what we want to do on this call is help you understand how you can benefit from that. You’re surely paying into it, all of us are paying into it with our tax dollars and we probably will be for many years. So it’s vital that it goes to help you because all the experts say there just isn’t enough money to go around. So what we’re helping people do is get in line right now, right away, and basically get this bail out money back where it belongs. So let me introduce Mike, my father.

Mike: Hi, everybody. Thanks, Ryan.

Ryan: Sure. And if it’s alright with you, why don’t we just talk about basically the news? Let’s talk about the $75 billion.

Mike: Yeah, very good. Let me take a few minutes. We’ll kind of talk macro level for a little while and talk about the Homeowner Affordability and Stability Plan. And I know we don’t want to dwell too much on the macro level because it isn’t really what this group is all about. This group is all about actionable items and things that we can really do, actions we can take to thrive in a downturned economy and loan modification is just one of them. So I don’t want to stay theoretical and academic too much but it will help our conversation if we at least review what the overall strategy is and what the program is.

Ryan: I think that will be good news for people on the call because if I’m on the call here I’m considering doing a loan modification I really don’t care about the President’s announcement and the housing rescue plan. I just have to be certain that Mike Rockwood, that the 60 Minute Loan Modification is going to take advantage of whatever the heck it is.

Mike: Right. So you’re interested in, like you said, get in line? Well, what we want to help people do is go to the front of the line. Right? That’s what this call is all about. How do we get to the front of the line, be sure that our loan modification are the best loan modifications they can possibly be.

So let’s talk a little bit about this HASP. Homeowner Affordability and Stability Plan. There really are three parts to it. It always occurs to me how much of these programs are always so politically motivated because even though, the very first part of this has to do with refinancing and addressing the issue that an awful lot of homeowners are still current on their mortgage are having trouble refinancing because their values of their homes have dipped. And of course, just to appease the people who are so upset with so many people getting help from the government, the government had to come out with a program to help people who are, in fact, not in such bad shape that they’re late on their mortgage.

So that’s what the first part of this program is all about. It’s a program to facilitate refinances but it only helps people who are really underwater only to the tune of about five percent. So they can re-fi up to 105 percent of the value. So it’s good news and it will help hundreds of thousands of people to re-fi to a lower rate. It really is kind of politically motivated in order to make sure that the program has a leg for those folks who are not late on their mortgage and that’s what the first part is.

Ryan: So it kind of sounds like it’s help for people who don’t need help but the other side of that is it’s not much help for people who don’t need help.

Mike: I guess that’s really true. It facilitates their getting a lower mortgage and a lower payment, but they weren’t in such dire straits that they needed the help.

Ryan: What we’ve talked about in the past is that some people inevitably are going to be helped by this that made poor choices or that lied on their mortgage application, they shouldn’t have had a home in the first place. And we just have to get over that as a society.

Mike: It’s so true. I second that.

Ryan: Yeah, it’s going to happen, fine.

Mike: I read one critique this week that was really true and it was all about how this is not about fairness. This is about reviving our economy so all of us can get back to semblance of order. We’re in disarray. We’re in complete free fall. And we need to stabilize the housing sector as well as other sectors. So it’s really not about fairness and people who are really stuck on the whole fairness thing are really missing the point.

The second part of the HASP program that the president rolled out is really the core of it. It’s $75 billion that will go to help modify mortgages throughout the country. It’s targeting to help three to four million at-risk homeowners. But those numbers are kind of staggering and that could really only happen over a number of years because the modification — all the banks working together are only able to modify at the most two million in this given year. So really some of it is just hyperbole.

But what we have seen so far is the program is going to result in a lot more standardization, all the participating banks are going to be required in the coming months just to adhere to the FDIC guidelines that have become so popular, that INDYMAC has them adhere to now for about seven or eight months and that most of the banks have started to anyways. So it’s going to result in a lot more standardization. It’s certainly is going to result in a lot faster process because they’re now is more financial incentive for the bank to do what they were supposed to do in the first place. The bailout money kind of got held up there for a few months while the banks had the money but weren’t really sure that they wanted to lend it out, kind of throwing our money after already bad money. So this program offers them from $500 to about $6,000 incentive to make and to keep good modifications. That’s really the heart of the issue, so we should get faster and we should get better modifications.

Ryan: Well, that’s kind of where my ears perk up because you’re watching the new, you’re reading the newspaper, radio all this, loan modification, housing foreclosure, blah, blah, blah. The key that I want people to know is that it basically, these changes that are going on in government, we believe will make things easier and faster to get a loan modification. Is that correct? And that’s all you can really take from it, right? You can’t sit around and wait and hope that a better bill is passed or something like that.

Mike: No, that’s right. So it’s better and it’s faster. And also some of the programs that had fallen flat at first, like some of the Hope for Homeowners programs, I think some of them will have life breathed back into them and I think probably it won’t be that long before we start to see some principal reductions going on.

Ryan: I was just anecdotal but I know that on the day of one of the announcements we got a call back that was real positive. And on the day and that was a little bit unusual. So, and we will talk about some of our real successes that our clients have had in the last couple of weeks specifically. So that is exciting. I don’t know if we can really be thanking the President for it specifically.

Mike: No, I believe it. You’ve got to think there was some pent up number of modifications when the banks knew that next week we’re going to get $1500 for having modified this loan you sure think they would have slowed down.

Ryan: Oh, well, that’s true. And the thing is that it’s a double edged sword because how many more millions of people are now submitting, applying, for loan modifications.

Mike: Absolutely right. Now the third leg of the whole HASP program is just the federal government emphasizing at what great lengths they will go to support Fannie Mae and Freddy Mac, and that is mostly just to re-emphasize to everyone that Fannie Mae and Freddy Mac are solvent. They will be solvent and they will get up to $400 billion in additional federal money if they need it. So we shouldn’t be concerned that they are going to go belly up.

Ryan: The other thing is that other people have loans on this call perhaps, from those government backed banks and again, they don’t really need to know the specifics of it but you need to apply for loan modification regardless of who backs your loans. But is there anything they need to do differently or no? Affected by that announcement?

… continued [full transcript available by email at help@60minuteloanmodification.com]

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My philosophy on Loan Modification… “Cheat me once, shame on you. Cheat me twice – SHAME ON ME!”

Do you really want to use one of those former sub-prime brokers for ANYTHING? Do you really want to pay for a “forensic audit” when you just need an application filled-out and some advice? No, don’t try to pay your way out of this one. You might as well flush that money down the toilet. Mortgage Modifications are better done yourself with insider information to make it good and fast! Here’s why.

1. You Already Have Help
A ton of tax money has gone toward helping homeowners get mortgage modifications. Lenders and the federal and state agencies involved have staffed and contracted to make the process easy and readily available to you. Dozens of community-based non-profits have staffed to meet the challenge. Also, many first-rate private companies (such as the Collection Agency Resolve Corporation and the debt counseling company Greenpath Debt Solutions) have contracted with the lenders to facilitate the process. Some of these resources are truly helpful.

These well-intentioned organizations are, for the most part, helpful. That’s the good news.

2. No one Loves You more than You?
Not the non-profits – Like most government or bureaucratic efforts, the non-profits provide way too much information and no tactics to benefit you! If you want to write a term paper on mortgage modifications, you’ve hit the mother lode. If you want to get a winning mortgage modification, it’s better to look further.
More troubling, these organizations owe allegiance to lenders as well as homeowners. They’re charged with reaching an equitable settlement.

I don’t know about you, but that’s not the type of backing I want in my corner! You need insider advice on how to win! You want advice that is unabashedly aimed at getting YOU the best deal – fast.

Not the Lenders - The lenders are clearly your adversaries. Not in the sense that they want to thwart your efforts, but they try to get you to accept the best deal for them. After all, the “Loss” part of the “Loss Mitigation Department” does not refer to YOUR loss!

Not the for-profit loan mod companies! For-profit loan modification companies are in it for the money. They maximize the number of clients they start and minimize the time and expenses spent on each one. Many of these companies are out-of-work former sub-prime loan brokers.

Loan mod firms botch loan modifications all the time by:
- Dropping the ball on follow-up
(They’re mainly concerned with new customer acquisition.)

- Sending out hack form letters

- Accepting the first offer the bank throws out

- Revealing damaging information to the lender, even without the lender asking for such information

There’s no shortage of new and interesting scandals produced daily by this new industry. Google for a recent one in your neighborhood!

Lastly, none of the lenders, non-profits, or loan modification companies take much of the work off your plate.

Relax, it’s not Rocket Science!

The process is simple, though it’s not easy. With our experience to guide you, you can submit a powerful application in as little as 60 Minutes. You CAN do it and you SHOULD do it.

You Can Make it Personal
Business is personal – people to people. You’ll be more effective if you understand that and work with people.

After all, the clerks and customer service representatives, negotiators, and supervisors you’ll contact are folks just like you – working blokes – with mortgages of their own! Connect with them if you can. Not only will it help your cause but it will also make the whole process more pleasant.

Your personal involvement in your loan modification will speed the approval and result in a better financial deal for you. Just like any DIY project, with good plans and good tools “you can do it, and we can help!” Let’s modify something together!

Mortgage Modification Questions?

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I’m advising all my clients to file aggressive mortgage modification requests and negotiate hard. It’s time to get good mortgage mods fast.

A client in WA this week used a strategy called “Produce the Note”. He has applied for loan mods on several of his rental homes but his current income (construction tradesman) fails to qualify him for them. He decided to take a stand and try every measure to keep his primary residence in WA. He anticipates that his income will be up by summer. He filed a formal Request for Documentation with the county court in the jurisdiction of the home. A copy of the form he used is below.

By filing this request he is asking the court to force the lender to produce the original loan docs to prove that they were executed properly and that the current “owner” of the note (investor) actually has a right to pursue the foreclosure. Apparently, the lenders have not been diligent about keeping a great paper trail in the sales/resale/re-resale of these mortgages. Doesn’t that just surprise us?! All foreclosure activity will stop until the lender can comply

A University of Iowa study last year suggested that companies servicing mortgages are often negligent when it comes to producing the documentation to support foreclosure. In the study of more than 1,700 bankruptcy cases stemming from home foreclosures, the original note was missing more than 40 percent of the time, and other pieces of required documentation also were routinely left out.

Democratic Rep. Marcy Kaptur of Ohio endorsed the strategy in a fiery speech on the House floor during debate on the federal bank bailout last month. “Don’t leave your home,” she said. “Because you know what? When those companies say they have your mortgage, unless you have a lawyer that can put his or her finger on that mortgage, you don’t have that mortgage, and you are going to find they can’t find the paper up there on Wall Street.”

April Charney, head of foreclosure defense for Jacksonville Area Legal Aid in Florida, said the strategy has been so successful for her that she now travels around the country to train other lawyers in how to use it. She said she has gotten cases delayed for years by demanding that lenders produce paperwork they cannot find.

How to Get a Loan Modification?

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Millions of Americans are learning about the foreclosure process for the first time – up close and personal. If that describes you, you’ll want to become prepared for how the process works, how you’ll be treated, and what your options and protections will be. I hope this brief overview of the process will help.

When foreclosure ends in repossession of the property by the bank, your credit report is stained by that “F” for 7 years. It’s truly the “F” word on your credit report and should be avoided at all costs. No other stain on your credit report does as much damage for as long. Part of the reason for this is that it’s actually very easy to avoid. The process provides for your protection during a prolonged period during which you should be able to resolve the issues.

Non-Judicial

In the 34 states that use Trust Deed instead of mortgages, like California, virtually all purchases involve three parties; the trustor (borrower), the beneficiary (lender), and the trustee (neutral third party receiving the right to foreclose). The trust deed includes a “power of sale” clause that gives the trustee the right to enforce collection of the debt. Collection of the debt is ultimately enforced by the beneficiary’s right to sell the house when the borrower fails to make the agreed upon payments.

Defaults of as little as 30 days can initiate the process, although 90 days is typical – and longer as the housing slump has deepened. Once the house is either sold at auction or “taken back” by the lender, the former owner must vacate at the discretion of the new owner.

In a non-judicial foreclosure, the trustee must meet few requirements before selling the property. In comparison to a judicial foreclosure, non-judicial foreclosure is quick because the trustee doesn’t need to obtain a court order to foreclose, nor is court supervision required to sell the property.

In California, the timeline of non-judicial foreclosure begins when the trustee files an NOD (notice of default). This letter is sent to the owner notifying them of the default of the loan. This notifies the owner of the lenders’ intent to exercise their right to collect on the debt. The copy of the notice is usually recorded at the County Recorder’s Office and mailed to the address of notice as per the trust deed.

The next step is the filing of the Notice of Trustee Sale. No sooner than ninety (90) days after the trustee records the Notice of Default, the Trustee must publish a Notice of Trustee Sale in the local paper and simultaneously file that notice with the County Recorder’s Office.

No sooner than twenty days (20) after the Notice of Trustee Sale is filed, the home may be sold at public auction for the amount of the debt plus foreclosure costs. If no one bids at the auction, the lender assumes ownership of the property as a “Real Estate Owned” asset or REO.

Timeline for a Non-Judicial Foreclosure: 5-7 months or more

Judicial

Judicial foreclosures are more complex and, therefore, take longer. States that use judicial foreclosure include: Arizona, Alaska, Delaware, Connecticut, Colorado, Florida, Louisiana, Kentucky, Kansas, Iowa, Indiana, Illinois, Maryland, Minnesota, Michigan, Nebraska, New York, New Mexico, New jersey, Ohio, North Dakota, Pennsylvania, South Carolina, Rhode Island, Vermont , Utah and Wisconsin.

Judicial foreclosures are processed through the courts, beginning with the lender filing a complaint and recording a notice of Lis Pendens (notice that a suit’s pending and title is “clouded”). The complaint will state what the debt is, and why the default should allow the lender to foreclose and take the property given as security.

If the court finds the debt valid, and in default, it issues a judgment for the total amount owed, including the costs of the foreclosure process. After the judgment has been entered, a writ is issued by the court authorizing a sheriff’s sale. The sheriff’s sale is an auction, open to anyone, and is held in a public place, usually the courthouse steps. Sheriff’s sales will require either cash to be paid at the time of sale, or a substantial deposit, with the balance paid from later that same day up to 30 days after the sale. After the court has confirmed the sale, a sheriff’s deed is recorded and the highest bidder is the new owner.

Judicial states with notoriously long foreclosure times include Vermont (210 days), Florida (180 days), Nebraska (180 days), and New York (12-19 months!).

Timeline for a Judicial Foreclosure: 6 – 19 months

You can see how long it usually takes in your state at Foreclosures.com. Just click on your home state.

Hardship Letter Help?

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Who qualifies for a loan modification?

More people qualify for a home loan modification than you might think. Consider this; anyone having trouble paying their mortgage is a potential candidate for loan modification.

But especially good candidates are homeowners with adjustable rate mortgages or high interest rates or homeowners who are upside down…in other words, they owe more on their home than they are worth. Candidates with any kind of hardships are also ideal candidates. The list of qualifying hardships is too long to list here but it includes reduced hours at work, job loss, divorce and illness.

Can the bank require an interior inspection of the property if they have concerns about the property condition?

Yes, the lender may conduct any review it deems necessary to verify that the property does not have physical conditions which might adversely impact the value.

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Why would a lender agree to a loan modification?

Usually, a lender agrees to modify a loan for the simple reason that it will cost them less than if they were to foreclose on your property. Foreclosure is an expensive, lengthy process. Faced with that, a loan modification can be an appealing option to a lender.

Can the lender include late charges in the Loan Modification?

Per HUD, the accrued late charges should be waived by the lender at the time of the loan workout-this varies depending on the type of loan-but always request a complete breakdown and description of all fees and penalties from your lender.

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