Mike Rockwood: Hi, everybody.  It’s Mike Rockwood.  Welcome to the Sixty-minute Loan Modification Clients Only Teleconference.  If you are near a computer, go ahead and log on to http://sixty-minuteloanmodification.com/october22 and then turn off your phone and you can watch and hear the teleconference live and in living color.  Ryan and I are Southern California loan mod experts and we have been in the loan modification business now for about 18 months and really have the premier do-it-yourself loan modification kit in the industry and with these weekly teleconferences, what we  hope to do is on Tuesday nights we gather with the public and with people who are considering becoming clients and people who are just interested in loan modifications and on Thursday nights we gather with clients only and talk specifically about issues related to loan modification.  So the Tuesday conferences very often get into various foreclosure topics and all the ten workout options but Thursday nights we try to keep it very focused on loan modification because the people that are on the call have purchased loan modification tools from us and our idea is that this teleconference adds a lot of value for all of you because it gives you the opportunity, number 1:  to hear a little bit more in-depth teaching on a particular part of the process that you’re in.  Number 2:  it gives you the opportunity to hear from a lot of people who are in the same situation as you are and thereby getting answers to your questions and it does a psychological thing for all of us as well just hearing all the talk about loan modifications.

It makes us realize that we’re not alone, that this is a big, big feeding frenzy and that a lot of people are running into the same issues and problems that you are so I think the teleconference is actually quite a big deal and quite a big part of the product that we offer so we’re going to do nothing but expand it and going on Ustream.  Streaming it live on video is just one step.  We’re going to expand it to better and better service providers so that we get better and better clarity, more interactions, faster interaction and can get through more questions in every conference that people feel like you can dialogue with us either by voice or through the computer, through the chat.  We’re almost ready to go.

Ryan Rockwood: Yeah, what I was thinking is we had constant problems with the phones and so I was kind of thinking that today we may want to go on the phones for the first 15 minutes ‘cause that seems to be when it works, right?

Mike Rockwood: Right.

Ryan Rockwood: Until we get it figured out.  I don’t know, it’s just an idea.

Mike Rockwood: No, that’s fine with me.  That’s a good idea.  You’ve got kind of like a 5 o’clock shadow thing going on here.  Are you working really hard today or what?

Ryan Rockwood: Yeah, actually, I ran out of shaving cream.

Mike Rockwood: Ran out of shaving cream.

Ryan Rockwood: Yeah.

Mike Rockwood: I guess the loan mod business isn’t as good as we thought.

Ryan Rockwood: It just leads you to drink.

Mike Rockwood: [Laughs]

Ryan Rockwood: Ok.

Mike Rockwood: You should be easier with the teleconference.  You could look like that all day long but now when you have to appear in front of all these millions of viewers, you better clean up and go to make up before these sessions, Rock.

Ryan Rockwood: We have an echo here somewhere that I’m trying to clear up.

Mike Rockwood: Are we watching ourselves on video on one of the other monitors?

Ryan Rockwood: I don’t know.  I’ll just try everything on so hopefully that echo will die down.  But anyway, do you want to give that a shot?

Mike Rockwood: That’s great.

Ryan Rockwood: Ok.  So the question line by email is http://questions@sixty-minuteloanmodification.com.  And one of our most loyal watchers has already told us that the chat is messed up at http://sixty-minuteloanmodification.com/october22.  You know, for some reason a lot of people say that.

Mike Rockwood: Maybe it’s true.  Did you ever think about that?

Ryan Rockwood: Oh, definitely.  So let’s just not put our faith in that and move on and say http://questions@sixty-minuteloanmodification.com.  You know, I do think people like the idea of interacting with one another a little bit, you know? So anyway, we got to get it fixed but let’s jump to some questions right away.

Mike Rockwood: Ok so just so everybody understands, that means that the ability to chat online on Ustream doesn’t seem to be working out.  It’s blank but you can still send the questions through email as always and we are going to go to questions right away now on the teleconference.  So again, the format here is, for those new clients, is that we get together.  We do a little bit of talking about an in-depth topic and tonight we’re going to talk about taking legal action and whether or not it’s worth it and then we get into questions.  So that’s going to be the flow of things and we’ll be together for about an hour.  Stay with us as long as you can and here we go.

Robert: Hi, this is Robert calling in.

Ryan Rockwood: Hey, Robert, I can hear you just barely.  How are you?

Robert: I’m fine, thank you.

Mike Rockwood: Hey, Robert, speak a little louder.

Robert: Ok.

Ryan Rockwood: Okay, what can we do for you, Robert?

Robert: I don’t know how many listeners you got out there but I just want to say that you guys have been pretty good for me.  You’ve been helping me.  You give me feedback and you’re following up with me and I’m happy with what [inaudible 0:05:55] is doing.

Mike Rockwood: Oh, excellent.

Ryan Rockwood: Hey, that’s really nice of you to say.

Robert: That’s no problem. [Inaudible 0:06:00]

Mike Rockwood: Robert, I always like to tell tales about things that happened in the past week and I had planned on telling everybody about your situation in the sense that it appears to me that what is the difficulty about your loan modification, the one that we’re starting on, is that it is really confusing when you put two people together who are living in two separate places.  You have to really combine and IndyMac is difficult to work with and Bank of America is difficult to work with.

Ryan Rockwood: Let’s get into that later.

Mike Rockwood: It’s just kind of complex putting it all together.  That’s my point.

Robert: Absolutely.

Mike Rockwood: And you know, we always say that loan modification is so easy, you should do it yourself.  Well, man, some of them we’re working on lately [inaudible 0:06:53]

Ryan Rockwood: Yeah. Ok.  Robert, thanks a ton for our endorsement there.  I heard a woman start to ask a question.  Are you still there?

[Background noise]

Ryan Rockwood: Go ahead.  We’re going to wait for you.  Do you have a question?

[Background noise]

Ryan Rockwood: Sounds like somebody’s in an airplane.  My goodness.  Air Force One to Sixty-minute Loan Modification.  Air Force One.

Mike Rockwood: [Laughs]

Ryan Rockwood: Ok I’m going to mute everyone.

Mike Rockwood: Ok.  Well, Ryan, we can only assume that all the people have started muting on the audio like you always asked and now are watching us on video.  We do get quite a crowd on video so maybe we’re getting even more.

Ryan Rockwood: Maybe they don’t have a question today.  Maybe what they’re tuning in for is recent changes and so on.

Mike Rockwood: Yeah.

Ryan Rockwood: And I could tell them about that.  I do know that today I had a client write in and she said, “Ryan, I’m about to submit my budget and I’m about to submit everything and my budget is in -$850,” and I can say that normally that is within our acceptable these days.  However, I wasn’t really comfortable to saying go with it because of the recent troubles that you and I have had, you know?

Mike Rockwood: Yeah.

Ryan Rockwood: I tell you folks, to give you some background.  If we’re working on your loan mod, it’s really crazy how many times we get turned down.  I mean I’ve gotten turned down on one loan mod like two or three times this week and these are supposedly, the bulletproof loan mods, you know?

Mike Rockwood: Yeah, we don’t take them to the lender until they’re bulletproof.

Ryan Rockwood: Yeah and so the idea that you could do this without some help or like call your lender and that whole idea of like call your lender, man, it’s really horrible because things are changing and all we can say is that we think it has to do with a couple of things.  Well, there are several reasons for it which are pretty uninteresting so I won’t talk about them but the practical realities are you’re going to have to have a positive—I wouldn’t go in right now without a positive cash flow in your budget.  Would you say the same thing?

Mike Rockwood: I’m pushing everybody.  They’re right about zero because yeah, we’re getting all kinds of push back.  We used to go in with 5and $700 negatives and it was working fine…

Ryan Rockwood: Yeah.

Mike Rockwood: …until the end of this whole trial mod thing.

Ryan Rockwood: And then you said that you actually got bumped down on one for a $60 negative at the end of the month.

Mike Rockwood: Yeah, yeah.

Ryan Rockwood: And that was a big deal.  The other thing I’m seeing is that expect to make so much for upfront payments and they say what can you give? And it’s kind of intimidating, you know? I was negotiating for one guy today and thought, “Ugh, 6,000? 4,000? And then I just hit myself upside down and said, “Ryan, chill out,” and I said to him, “Well, I could scrape and borrow.  Together, I could get like 2200 bucks today.”

Mike Rockwood: Yeah, good for you.

Ryan Rockwood: “Ok,” he says. “So did you say ok? But it’s important to have a definitive answer ready that you are willing to put up within ten days.”

Mike Rockwood: Yeah and you know, Ryan, it’s my experience that whatever you first say, expect them to come back asking for at least twice that much.

Ryan Rockwood: Oh, right.

Mike Rockwood: So you really have to sandbag with these guys.

Ryan Rockwood: Oh, I got lucky today and it has been a week of incredible ups and downs.  Most importantly, we lost one of our team members here of Sixty-minute Loan Mod – my brother Luke who works behind the scenes so that was absolutely devastating to us but he’s got some other ventures and interests that’s he’s moving on to and so of course he’s got to do that.  And also, the laws regarding loan modification have just become incredibly onerous, changing, varying from state to state, in dispute and so on and so forth and with some new legislation that was passed, almost all of our products could be construed to violate the laws.  I mean not the books and CDs and stuff but things like helping someone out with a hardship letter for 100 bucks.  Again, it’s legal so like you can have your different points of view.  Is it a giveaway with the book or are selling? I don’t know, you know what I mean? But it’s really frustrating because we’re really unable to do some really basic simple things that we do well and help people out.

Mike Rockwood: Oh, we’re spending more time watching our back and covering our assets than helping people.

Ryan Rockwood: Yeah.

Mike Rockwood: And it’s really a shame because a lot of outfits out there are ripping people off but we’re out there doing some good for people and helping and we’re getting all tied up trying to cover or butts.

Ryan Rockwood: And we don’t even have any assets, you know?

Mike Rockwood: There you go.

Ryan Rockwood: Yeah so it’s been very frustrating and I think that the bottom line is that as of this week, we’re probably going to shut down every product except for the books and CDs and we will continue to have these courses and in the meantime we’ll regroup and we’re going to come up with some more products but also we’re going to search for a way that we can help people and it’s really a shame because the done-for-you thing, I’m sure everyone on this call has done it.  150 bucks budget and hardship letter, it’s just great.

Mike Rockwood: It’s a great value.  People love it.

Ryan Rockwood: Yeah, yeah.

Mike Rockwood: Yeah.

Ryan Rockwood: It should be 400 bucks for the amount of time we put in.  Anyway, it’s just like we can’t really mess with it so from now on I got to think we got to get rid of everything and it’s a real shame.  It’s a real disappointment; everything we’ve worked for and so that’s going to go out and I think that all we can remain with now is the physical products, teleconferences and so on.  Email support’s even pushing it but obviously we’re going to communicate to our current clients and also, all we can do is the entire loan modification, if you want help on your hardship you have to do the entire loan modification and we have to get paid afterwards.  So that means that our ideas of loan modification are done for people for $1,000.  Remember we started out at $600 for doing loan mods for people? It’s really going out the window and it’s frustrating, you know?

Mike Rockwood: And it’s just not good for the consumer.  That’s what’s frustrating.  It’s not good for any of us.

Ryan Rockwood: Yeah.  So if we’re getting paid, let’s say, three months down the line it’s got to be 3,000.  It’s got to be 4,000, 5,000.  You’ve got to think about the 30% of the people that you’re never going to be able to collect and all that junk.  I think we’re more like your average Joe’s out there.

Mike Rockwood: Here’s what we have to do, Ryan.

Ryan Rockwood: Uh-huh.

Mike Rockwood: We have to open a church of the modified loans.

Ryan Rockwood: You’d have to become a religion.

Mike Rockwood: Yeah, we’ll become a religion.

Ryan Rockwood: And we’ll become pastors.

Mike Rockwood: Yeah and we can just do contribution only, you know what I mean?

Ryan Rockwood: Yeah.

Mike Rockwood: Whatever you, in good faith, think that you can contribute or we take your car [chuckles].

Ryan Rockwood: And what if we could do contribution? I tell you folks.  The bottom line is that it’s really another example of how the government and the mortgage companies, we think, are forcing you to take it on the teeth.  Today, I got a loan modification for someone after getting turned down a couple of times.  It’s $700 a month reduction for 30 years and what have I charged it? Nothing and will I ever collect? I don’t know.  Anyway, the value of that if you do a simple math equation ‘cause after all the hard core I get, is about $252,000 over the course of the loan and the bottom line is without this kind of expertise about being nutty enough to sit around doing them all day, I mean, some of these, there’s just no way.

Mike Rockwood: Yeah.

Ryan Rockwood: This is a guy with like nine properties, you know what I mean? And debt stinks, all this stuff.  So anyway, it’s a bummer and I guess we got to stop talking about that but if you go to the website and some of the options aren’t there that you saw.  Understand that we’re just trying to—

Mike Rockwood: We’re just evolving, yeah.

Ryan Rockwood: Evolving.

Mike Rockwood: Hey, Ryan, I have one good story that I want to relay before we start into this, all right?

Ryan Rockwood: All right, let’s do it.

Mike Rockwood: Ok real quickly, everybody, I do like to tell you when we hit a home run or make significant progress or prove a point and the point that I want to tell you that we proved today was that you have to be tenacious.  I was on the line with Sue from Northern California and she had tried twice and I had tried with her twice so this was now the fifth time that we had talked to her lender about the fact that we think she’s a perfect candidate for a loan modification.  When the rep told us once again, and it’s Bank of America that keeps telling us this over and over again is, “You don’t qualify and we can’t tell you why.”  That’s just ridiculous so we kept asking around and asking around that point and finally the rep said, “You’re starting to get testy with us,” so we said, “Listen, put us through to a manager.  This just isn’t right.  You guys have something wrong.”  So we got put through to a manager who came on the line with quite an attitude and we just met him with an attitude as well and did our very best to talk him down off his attitude and you know what, by the end of the call we had realized that they had an error on their spreadsheet.

Ryan Rockwood: What error was it?

Mike Rockwood: There error was—get a load of this, you guys because it’s huge—they had simply not included her taxes and her insurance in her mortgage payment.  They calculated that she did not qualify for the President’s Program because her payment was 29% of her gross household income when in fact you add taxes and insurance which you’re supposed to do.  It became 34% and qualified her so it was very frustrating because we know we had made that point in the past but it just goes to prove the point:  you have to keep asking.  When you know you’re right, keep asking, keep asking, keep asking and I’m going to introduce to you a new twist now on “the getting past no” process that we’ve always recommended.

Ryan Rockwood: Well, you know, there was an article on that magazine Default Servicing News or whatever and it was about how much these untrained folks—I’m giving you a hard time but they have a lot of power. I mean just like how did they come out of power…

Mike Rockwood: Oh, yeah.

Ryan Rockwood: …for their position?

Mike Rockwood: No kidding.

Ryan Rockwood: It’s vastly skewed, right?

Mike Rockwood: That’s what we said to this person, Ryan.  We said, “Listen,” ‘cause she sounded like she was about 19 which is fine to be 19 but she held the power to finally turn down this gal on her home of many years that her family loved and that they had sunk a lot of their own money into and now because of the market, was devalued.  She held the power to just say no and that’s what we said to her.  We said, “Listen, we can’t just hang up the phone and go away.  This is not a refrigerator.”

Ryan Rockwood: Yeah.

Mike Rockwood: You know, it’s not a rug.  This is a home.

Ryan Rockwood: It’s just way beyond the pay grace kind of thing.

Mike Rockwood: Yeah. Yeah, yeah beyond the pay grace.  Ok so let me go ahead and go into the teach in.

Ryan Rockwood: Yeah.

Mike Rockwood: And I’ll move right through it ‘cause I know we’re eating up valuable question time but the topic that I want to talk to all of you about today is legal action and whether or not it’s worth it and of course, over the last 18 months I have recommended against legal action ‘cause I always felt like it was frivolous and that in fact it was just being used by attorneys as a come on to get billable hours and to get you into their $5,000 loan modifications and I believe that  was the case.  But the environment for all of us homeowners is going to get very much worse before it gets better and if you don’t believe that, then you should take drastically different action than we advise you to around here because we believe in 5 things.  Number one is that foreclosures are climbing the economic ladder.  That is higher priced homes are now coming under price pressures and even in the most sought after locales.  Unemployment continues to rise and is expected to rise well into 2010 and not leveling off until next summer and then it will in fact level off, not begin to decline probably for a couple of years.  Some experts are saying that we should all expect some increase in what they call structural unemployment.  That is the unemployment that is just built in to our system for the coming decade, for the coming generation.  Number three, commercial property in the United States is the next major industry to implode—watch for it—followed by credit card companies.  There’s going to be two more major shoes that drop in this economic turmoil that we’re in.  The fourth item is that inflation can only be kept under control by governmental action and that’s the only thing that’s keeping it under control and that we absolutely will have drastically rising prices and the interest rates worldwide starting in about a year.

You just can’t print that much money and not expect prices to just go through the roof and lastly, the US government cannot continue to bail out because they have proven to be too expensive and too ineffective at stimulating the economy.  The only thing that is stimulated is the thing that got us into that, into the whole mess which is Wall Street.  So Wall Street is stimulated with all of our money but that’s it so you got to come to peace with the fact that there is no reason to expect that there will be any upward pressure on prices in the real estate business in the immediate future.  we’re still likely to see another 10% decline nationwide before next summer before the decline stops and then we flatten out for a number of years.  All right.  And now think about this:  foreclosures, short sales and deeds in lieu.  Foreclosures, you know, actually taking the home back and reselling it as an REO and short sales, you all know what those are and deeds in lieu, where people just give the home back, walk away.  Those have been the three main ways that we have been letting the air out of the housing bubble and there have literally been millions.  There are currently 4million people that have received foreclosure notices year to date so the numbers are increasing dramatically and those have been the three primary ways that the housing bubble has been deflated.

But because economic times are going to get tougher, these three are going to give way to three new ones and they are lawsuits, legal loan mods and bankruptcy cram downs.  Now I think this is going to happen because of a couple of things.  Number one is the national conscience, I call it and that is kind of just a general acceptance of a new paradigm I like to say.  The national conscience has begun to realize and accept that these changes are permanent and that as the problem devalued real estate prices, reaches more affluent, more educated and more powerful segments of our society, they will give way to these three new methods of deflating the bubble – lawsuits, legal loan mods and bankruptcy cram downs.  I really believe that we’re going to allow the courts to cram mortgage reductions down the throats of lenders before too long.  Now legal loan mods, is a term I want you to become familiar with because I think it’s going to become more important even in the coming three to six months.  Legal loan mods is the term that I’m using to describe what is really a nastier loan mod than the ones we’ve been accustomed to.  Now keep in mind, only 5% of applicants have been getting loan mods in the first place and half of those have been failing.  So only 2 1/2 % of the 10,000 people per day that are applying for loan mods are getting reasonable loan mods.

So legal loan mods is our loan mods are going to be taken over by the legal department.  They’re going to be mandated by the legal department and these loan mods will be ordered and managed to buy lawyers at the servicer and they will involve discovery by us borrowers and by attorneys and by paralegals through forensic audits; discovery of violations of RESPA, of HEPA and TILA and many state laws that protect consumers during loans.  There will be negotiations for remedies that will include not dissolution or recession of the loans but very likely what we’ll call legal loan modifications and those extraordinary settlements that will be coming will be principal reductions and settlements and extinguishing and I think that’s it.  We see it starting to happen now and I believe that that will become the ordinary loan modification by next summer but your action items for now, for this round of loan mods that you’re in, because I believe all of you are going to be doing loan mods again next summer – but for this round what I’m inviting people to do is to start to include in your standard loan mod application a qualified written request identifying the issues and it should be sent as soon as you get past the first five notes so in other words here it goes.

As soon as you submit your loan application and you don’t get the response that you expect, as soon as you ask five times to be sure that that’s where the lender is parked, that’s what they’re going to do, then I recommend that you rattle the saber by sending a qualified written request identifying the violations of TILA and RESPA that you have identified and I will help you do that and asking them to formally respond to those.  Now this is very much a kinder and gentler way to handle it than retaining an attorney and suing their butts but you still might have to resort to that.  but this is what I recommend as pretty much standard operating procedure and I’m going to add it to the workbook and I’m going to add it to the Black Belt CD so to become standard operating procedure for us and I will have, as I’ve mentioned in the last couple and I’m working on a legal loan mod do-it-yourself kit shortly.  I’ll have it done shortly that will walk you through step by step the ways to identify the most common violations because in these initial phases it’s really most important that you identify the most egregious violations and the most common ones and the ones that are being acted upon in courts now so  if you identify the fact that you think that in fact the annual percentage rate that you were charged is actually too much different than on the good faith estimate or even on the HUD one, then that was a major violation that people are being fined and loans are being modified based on that violation now.  So what we want you to do is figure out if that’s true for you; then you want to make that claim in your qualified written request.  So legal action:  is it worth it? My opinion is it hasn’t been but it will be and it probably is now imperative that you get familiar, start to get familiar with what the violations and common ones are and begin to use them to get out of line and up to the front of the line because the line of the crowd, the 150,000 applications that are at chase today, the clamor to get those settled is going to become more and more and more rancorous? Raucous?

Ryan Rockwood: Yeah.

Mike Rockwood: Raucous, that’s a good one.  So we need to be smart about street fighting and that’s one way we keep you smart and we’ll continue to pass on that information and now we will be glad to take calls.  Do you mind if I jump in to some of these, the people that emailed me ahead of time?

Ryan Rockwood: No, not at all.  Go ahead.

Mike Rockwood: Ok.  So I want to take it on Vince in Arizona.  He has a rental home and “I’m not sure that I should even bother with a loan modification because the comps are now about 90,000 and I owe 205,000.  How do you recommend I evaluate this situation?” Ok, here’s what I recommend, Vince.  First of all, I recommend that you have a strategic plan and by that I mean long term.  Is this a property that you want to keep? In other words, think about what the comparable values are.  You know, Ryan, I’m running this math in my head ‘cause I have several properties in about this price range.  If you can get close to $1,000 rent, anywhere over $750 a month rent on this property, then if I were you I would try to hang on to it and a get a principal reduction loan modification in the future.  long term, strategically, we want to own property.  So that’s the first thing.  That’s strategic.  Number two, if in fact right now you are paying this mortgage which is probably about a $1300-payment—roughly, I’m just doing that in my head—if it’s about a $1300-payment and you’re getting about a 6 or $700-check, then I would take some drastic action.  If I were you, I couldn’t take that kind of bleeding for very long so I would either stop payment immediately and negotiate for a great loan modification or I would short sell this property.  So that’s how I tend to prioritize it.  My first preference is to keep the property and I don’t mind getting tough with the lenders in terms of negotiating and this one you just might have to fight like heck.  At this point, you won’t get a principal reduction but you would be a great candidate to think through – when did you get the loan? Was it during the 2004 to 2006 time frame when a lot of predatory lending practices have been identified? Are you by chance disabled? Is it by chance an interest-only loan or an adjustable rate mortgage? Because a lot of people are claiming those in themselves are violations of TILA.  Let’s see.  What other things might we ask?  Well, at any rate, that’s how I recommend you analyze it and please stay in touch with us and use us and use our tools to help you think this one through.  Can I take another one?

Ryan Rockwood: Yeah.

Mike Rockwood: All right.  Robert in Gardena says, “I have a total of four California homes and I wish I could get modifications on all of them like you did on your homes.  However, I’m in foreclosure on two of them.  My income is down and vacancies are absolutely killing me.  Can I forestall foreclosure long enough to get the loans modified?” Robert, the answer is, in California, particularly at this time you have a lot of leverage to get delays in your foreclosure.  Let’s see, you’re in Gardena.  Heck, I have a book about Southern California that I’d be glad to send you.  Ask me for it.  It’s the South Bay Notice of Default Handbook.  Right now it’s targeted just to the South Bay.  It’s going to be nationwide within a month or so but it’s a notice of default handbook and in it there are seven different ways to delay foreclosure and they’re really simple, really legal, really ethical and they work.  So absolutely, you can take action right away.  The critical thing is to monitor very closely that you don’t get that notice of trustee’s sale.  That’s when you really start losing control of the clock.  Can I take another one?

Ryan Rockwood: Yeah.

Mike Rockwood: All right, Mike from Calabasas says, “IndyMac is refusing to modify my rental in Arizona.  Any suggestions?” it turns out that IndyMac and Saxon mortgage are two of them who have for their own reasons, for their own purposes decided that for the time being, they’re not even going to entertain modification requests on rental properties.  Now that’s really unpopular and they are really sticking to it.  I have been unable to find anybody who’s been cracking the code and figure out how to get around that except to do the very distasteful thing which is to go right up to trustee’s sale with them right up to a share of sale with them.  So in other words, I personally have the experience where Saxon didn’t bow down until I had already incurred lots of legal fees and I did end up getting a good modification.  They said, “Absolutely not.  We do not do it.  We won’t consider it until we got within two weeks of share of sale.”  So I’m sorry, Mike but that’s the bad news.  I have not heard of people getting around it.  They’re adamant about it.  Tony says, “Are short sales final or can a lender sue for any amount that they shorted in the deal?” That’s a good question.  Tony, the key term is deficiency judgment.  Are short sales final? Let’s say he has $100-mortgage.  He short sells the house for 65,000.

Can the lender come after him or sue him for a deficiency for that $35,000?  And the answer is, yes and no.  The answer has to do with whether or not it’s your primary residence and whether or not the loan you took has recourse and by recourse I mean can you held personally reliable for the debt? And only a local attorney can tell you for certain but if it’s your primary residence and you’re in an on-recourse state, you are virtually guaranteed that they cannot pursue you.  Lastly, I would say, Tony, that’s part of the short sale process and if you have a professional managing it for you, if your realtor is experienced or your attorney is experienced in it, the closing statement, the settlement statement from the lender and I think there’s a copy of that on the website – a closing statement from a lender, the offer to settle says very clearly that they are accepting it as payment in full and will not pursue personal liability for any further payments so the good news is before you sign on the line and accept the short sale, you get real clear on whether or not you have any personal liabilities.  All right? Can we just keep rolling?

Ryan Rockwood: Yeah, absolutely.

Mike Rockwood: I love these questions.  “If my front end DTI is 36%, can I qualify for the HEMP Program?” Now the HEMP Program is the Home Affordable Modification Program.  Home Affordable Modification Program, it’s the President Obama Program for making homes affordable.  It is the modification program.  It’s the A-paper of loan modification.  It’s the one we’re all trying to qualify for and Pat says that her front end DTI is 36%.  Now front end DTI is a term that we use to refer to as HTI and that is the qualification that they use.  That’s the first gating factor in getting qualified for the President’s Program and it works like this.  You take your first mortgage on your primary residence and you add principal, interest, tax and insurance and homeowners’ association dues.  Add all that up.  Very important, add it all up.  Take that number and divide it by your gross household income.  Pat says hers is 36% and [makes a chiming sound], you win! If you had been below 31%, it would have been no, you don’t win but you do qualify so pursue it, Pat.  You’re in the hunt for a killer loan mod, even if it’s only for two to five years, you could qualify for a 2% interest-only payment which just changes your life.  It’s a beautiful thing.  Mark says, “I’m self-employed and Countrywide is completely confused by my net versus gross income.”  Boy, does that not surprise me.  Countrywide BMA is just generally confused.  He says, “They want to exclude all my business expenses.  I get so frustrated trying to explain to them how can I succeed.”  Mark, the only way that I have ever succeeded at it is to actually supply a business profit and loss statement and most self-employed people—you say self-employed—I bet you mean that you are either a commission sales person and independent agent or you run a small business of sole proprietorship that you don’t keep quarterly and monthly books on.  The only way I’ve been successful is to take the time to build a profit and loss statement for your business.  On the Black Belt CD that you received with the kit, I think it’s in Section VI.  Yeah, there’s a template that you can use and just take the time.  It’ll take you about an hour, that’s all, because you know this stuff off the top of your head.  You probably have about six to ten line items of expense that you incur month after month after month and probably almost every month or periodically throughout the year that are the same.  So build that P and L for your business and show either the bottom line as your owner’s draw or owner’s equity or whatever you want to call it but make it really crystal clear that that is your gross income.  Date it, sign it; what I even do is make people say, “Write on it.  This is my gross income per month,” and then sign it and date it and the underwriter then will accept that just like they accepted W2 or a 1099 as proof of your gross income.  So you have to go through the steps to make your presentation fit in just like everybody else’s because if you ask these people to think, not only do they not want to do it, many of them, most of them are unable to do it.  They’re not qualified for it.  It wasn’t on the job application so they can’t help you with thinking.  You got to do it formed.  You got to present your application in a way that just gets approved, approved.  It looks like every other one – rubber stamp, rubber stamp.  Ok now, Susan says, “I just got prequalified at IndyMac.  Yahoo!  Just like you expected I would,” ok I know who this is.  “How can I be sure that this works out like the rep said it would?”  Well, first of all, Susan, congratulations.  Isn’t that a good feeling when you know you can start making out that payment again? You can stop being hounded by the collection calls.  You can get it off your mind and get on with your life and save some money each month.  So the way that you are absolutely sure that it works out the way that the rep said is to watch your mail because it’s coming.  From IndyMac, it’s going to come in the mail and they only give you about a week to get it signed on.