File Name: 03.15.10.ClearCreditMastermind.7CriticalSecrets
Duration: 01:25:17
Ryan Rockwood: Hi! Welcome to the call. We’re starting up right on time. 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’s frontlines including what we’re doing and what our clients are doing. Next we’re going to talk about 7 Critical Secrets absolutely current secrets that we are learning in loan modification and just in the process of doing them. And that’s actually handouts, so later on I’ll provide when I get I’ll provide the URL where you can jump on and you keep a copy of that.
Okay then, we’re going to talk about news where these stories from around the country. And we’re going wrap it up with questions and answers. Okay, everyone should have lots of time to get all their questions answered and all unmute the at that point until then we really won’t be able to interact. So don’t worry we can’t hear you if something is going on in the background.
Okay, 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-index. And here’s how it’s going to work. From noon 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 10 minutes where swap the clients and actually we have a live event workshop that evening. And so please respect our time in this offer. Here’s how we’re going to do it. Kind of like a radio calling show? If you get a busy signal or a 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 right here. It’s 3106027380. Now I kindly ask you do not use this number at any other time than on the 16th tomorrow during noon to 4:00. That’s a private office phone number. We don’t give it out and I’ll give it to you one more time right now. It’s 3106027380. One more time 3106027380 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 mods, short sales, all kinds of things. And right now we’re really focused on loan mods. 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, huge news week with the President’s Bill. He basically announced $75 billion that we’re going to just throw it at this housing problem. And so from our perspective what we want to do in this call help you understand how you can benefit from that. ‘Cause 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 that there’s just isn’t money to go around. So we’re helping people do it, 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, hi!
Mike Rockwood: Hi everybody.
Ryan Rockwood: (Laughs)
Mike Rockwood: Thanks Ryan.
Ryan Rockwood: Sure. And why don’t you, if it’s all right with you. Why don’t we just talk about basically the news?
Mike Rockwood: Yeah.
Ryan Rockwood: Let’s start with the 75 billion.
Mike Rockwood: Yeah, very good. Let me take a few minutes to – 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 ‘cause it isn’t really what this group is all about. This group is really all about actionable items and things that we can really do. Actions we can take to thrive in a downturn economy and load modification is just one of them. So I don’t want to stay theoretical and academic too much but it’ll help our conversation if we at least review what the overall strategy is and what the program is. And Rock, as you were introducing all these stuff I realized as hard as we work to boil down all the agenda items, we have too much again here tonight. And so we do need to plow through this stuff pretty quickly because we really do want to get to questions and answers.
Ryan Rockwood: I think that will be good news for the people on the call ‘cause 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 Rockwood: Right. So you’re interested in like you said get in line. Well what we want help do is go to the front of the line, right?
Ryan Rockwood: Yes.
Mike Rockwood: That’s what this call is all about. How do we get at the front of the line? Be sure that our load mods are the best loan mods they can possibly be. So let’s talk a little bit about this HASP, Homeowner Affordability and Stability Plan. There really are 3 parts to it. And 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 who still current on their mortgage are having trouble refinancing because the values of their homes have depth. 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 so bad – 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 5%. So about 105% of their home after the modification, they can refi up to a 105% of the value. Well its good news and it will help hundreds of thousands of people to refi to a lower rate. It really is kind of politically motivated in order to make sure that the program has a leg for those parts of the program for those folks who are late on their mortgage. And that’s what that first part is.
Ryan Rockwood: So kind of sounds like its help for people who don’t help but the other side of that is it’s not like much help for people who don’t need help.
Mike Rockwood: (Laughs) I guess that’s really true. It facilitates their getting a lower mortgage and lower payment but they weren’t in such dire-straights that they needed the help.
Ryan Rockwood: But we’ve talked about in the past is that some people inevitably are going to be help by this that made poor choices over the [Inaudible – 00:08:17] application that shouldn’t add a home in the first place and we just have to get over that as a society.
Mike Rockwood: It’s so true.
Ryan Rockwood: Yeah. I mean yeah, if that’s going to happen fine.
Mike Rockwood: Yeah. And I read one critique this week that was really true and it was all about how this is not really about fairness, this is about reviving our economy so all of can get back to some semblance of order. We’re in disarray, we’re in complete freefall 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. And at $75 billion that will go to help modify mortgages throughout the country. It’s targeted to help 4 to 5 million responsible homeowners they say. But I’m sorry it’s even – yeah 3 to 4 million at risk homeowners. But those numbers are kind of staggering and could really only happen over a number of years because all the banks working together are only able to modify well at the most 2 million in this given year. So really some of it is just hyperbolic but what we have seen so far is that if the program is going to result in a lot more standardization, all the participating banks are going to be required in the coming months to adhere to the FTIC Guidelines that have become so popular that Endemic has adhered to now for about 7 or 8 months. And that most of the banks have started to anyway – so it’s going to result in a lot more standardization. It’s certainly is going to result in a lot faster process because there now is more financial incentive for the bank to do what they were supposed to do in the first place. I mean the bail out money kind of got held up for a few months there while the banks have the money but weren’t really sure that they even 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 incentives 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 Rockwood: Well that’s of were Myers perk up because you’re watching the news, you’re reading the newspaper or radio, all these. Loan modification, housing foreclosure, blah-blah-blah-blah the key that people that I think 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 mod.
Mike Rockwood: Yes.
Ryan Rockwood: Is that correct? I mean that’s all you can really cake from it. You can’t sit around and wait and hope that a better bill is pass or something like that.
Mike Rockwood: No that’s right. So it’s better and it’s faster and also some of the programs that had kind of falling flat at first, some of them like the Hope for homeowners program. I think some of those will have life breeze back into them and I think probably it won’t be that long we do start to see some principal reductions going on.
Ryan Rockwood: Now this kind of doodle but I know that on the day of one of the announcements we got a call back that was real positive. I mean on the day and that was a little bit unusual.
Mike Rockwood: Yeah.
Ryan Rockwood: And we have – we’ll 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 but –
Mike Rockwood: No I believe it.
Ryan Rockwood: Okay.
Mike Rockwood: I mean you 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 should think it would have slowed.
Ryan Rockwood: Well that’s true.
Mike Rockwood: Yeah.
Ryan Rockwood: And the thing is that it’s a double edge story I guess because how many more millions of people are now submitting, applying for loan modifications.
Mike Rockwood: Yeah.
Ryan Rockwood: Right?
Mike Rockwood: That’s absolutely! All right now then the third leg of the whole HASP Program is just the Federal Government emphasizing what great lengths they will go to support Fannie Mae and Freddie Mac. And that is mostly just to reemphasize everyone that Fannie Mae and Freddie Mac are solvent. They will be solvent and they will get up to $400 billion in additional Federal money if they need it. So don’t – we shouldn’t be concerned that they are going to go belly up.
Ryan Rockwood: The other thing is a lot of people have loans on this call perhaps from those government backed banks.
Mike Rockwood: Right.
Ryan Rockwood: And again they don’t really need to know specifics of it. You need to apply for loan modification regardless of who backs your loans.
Mike Rockwood: Right.
Ryan Rockwood: But is there anything they need to do differently or no effective by that announcement?
Mike Rockwood: No that is again just PR.
Ryan Rockwood: Okay.
Mike Rockwood: That do not fear the Federal Government is solvent and so is Fannie Mae and Freddie Mac. Now we did hear a little bit of Saber rattling this week from China though. That you know expressed concern over the fact that the Federal Government was spending so much money.
All right, so now you want to turn – let’s turn to some real events kind of bring this down from theoretical to what’s happened in the past month.
Ryan Rockwood: Yeah.
Mike Rockwood: All right I want to report a couple of examples that I think should be very encouraging to people. One of them was that I personally, as you guys probably know, all of you probably know by now. One of the reasons I think I am such a good spokesman for the whole business of loan modification is because I am heavily invested in loan modifications myself from the start of the whole downturn event.
Ryan Rockwood: Well you’re invested in real estate unfortunately.
Mike Rockwood: Yeah (laughs) but I mean I work at loan modifications of my own and not only have I already gotten 6 of my own but I resubmit them as loan modifications get better and better and so now I’m trying to improve my modifications and I have a couple of things to report. I got a killer offer from National City on a second mortgage on my own home that is a short term thing. And you know how lot of these loan modifications are short term in many ways a short term fixed to a very big, big -
Ryan Rockwood: Well let’s not focus on the negative I mean this is we’re blown away. Basically I’m one of course – we have a 1% loan.
Mike Rockwood: Yeah.
Ryan Rockwood: Well from what-
Mike Rockwood: But National City took (laughs)
Ryan Rockwood: What did they go from 7 ½ or something?
Mike Rockwood: No, 8 1/2. They went from 8 ½ to 1%.
Ryan Rockwood: Okay. And this success basically it’s just a procedure we outline in our book.
Mike Rockwood: Right.
Ryan Rockwood: You know following the standards, the submitting, following-up, the negotiation tactics, all those kind of stuff, you drop 7 ½ points. And basically, I don’t know if I was on this call I kind of be – I don’t know doesn’t really look too flashy but I know that a lot you know it says, “Oh we’re going to get you a 1% loan or this or that.” It makes you think the whole industry is probably just whack. You know liars and scam artists and so on and so forth. But we can tell you, I think we have the documents posted that we’ve got this 1% -
Mike Rockwood: And honestly, this is the best one we’ve ever heard of. And we got it on -
Ryan Rockwood: Yeah.
Mike Rockwood: On a $200,000 second mortgage on the home that I live in.
Ryan Rockwood: Now it is 18 months or-
Mike Rockwood: Yeah.
Ryan Rockwood: Something like that, right?
Mike Rockwood: 18 months and it is admittedly just kicking the problem down the road for a couple of years but be it $750 a month, I’m all for it. So for the next 18 months combined I have a total of $1500 reduced off of my mortgage payments. So that’s beautiful. Now I also want to report kind of set back. I got a lousy mortgage or a lousy modification offer from Wells Fargo Bank. They basically, this is on a property that I own up in the high desert in north of Los Angeles about 40 miles.
Ryan Rockwood: Okay to take me to the process you followed the step-by-step procedure that we’ve created.
Mike Rockwood: Yup.
Ryan Rockwood: How long would you submit?
Mike Rockwood: This one took awhile because they kept rejecting, rejecting, rejecting. And I would argue back because I know their business so well that I kept pushing back, pushing back, pushing back. They would argue, “No, your DTI is this.” And I said, “No, it isn’t. Let’s run through the numbers and I figured it out and I send them streaming back and they’d say, “Well this doesn’t qualify because of that.” And I’d say, “Well yes it does. Isn’t this the rule?” And they say, “Well I guess you’re right.” So I bet I corrected them 5 times before I got that-
Ryan Rockwood: But it’s not always probably like they’re wrong either. Part of it I think what people need to know is that those numbers are malleable. And like that one gal who said to me I’m not going to be on the call because Wells Fargo said that I don’t qualify. Well, okay what does qualify then? Okay, I’ll call you back tomorrow with those numbers.
Mike Rockwood: Yeah.
Ryan Rockwood: You know that’s stopping dishonesty anywhere or anything, right?
Mike Rockwood: Right. So here in this instance, I just kept correcting their perception of me until they finally they gave me a modification that really didn’t help me. It basically kept my interest rate the same. It took all the arrears and put it on the loan and it was just very disappointing. So I called them now -
Ryan Rockwood: Okay, so you know what? I’m glad we talked about this because that’s actually what most loan medications are. And if you go through most –
Mike Rockwood: What? You mean disappointing?
Ryan Rockwood: Well, basically they just take the amount that you owe and tuck it on to the end of the loan. They [Inaudible – 00:18:01] your behind. That’s I don’t know did anybody count that as a loan modification? It almost sounds like -
Mike Rockwood: Sure.
Ryan Rockwood: I don’t know a freebie or something. You know what I mean?
Mike Rockwood: That’s forbearance or a [Inaudible – 00:18:12] wrap as a loan modification.
Ryan Rockwood: Yeah I mean it doesn’t really sound too modified to me. I mean except that I guess your credit isn’t getting binged every month. The bottom line is this and let me be clear. The majority of the people that come to us call their bank to get the loan modification and the bank said, “Sure, we’ll modify it. Next month just start paying $1,000 more than you were and we’ll call it good in 3 years or something like that. Then you’ll be back to your normal payment.”
Mike Rockwood: Well that’s really what they were saying with this one.
Ryan Rockwood: Yeah.
Mike Rockwood: Here let’s just go do-over and -
Ryan Rockwood: And that will be great if you had the money, right? I mean if someone out there can afford an extra $1,000 a month or $2,000 on their mortgage for the next 3 years until they’re current. We’ll call your bank and get it. You know what I mean?
Mike Rockwood: Yeah.
Ryan Rockwood: That’ll do the job but if this -
Mike Rockwood: This one would have increased my payment like by a $150 a month but heck I had asked them for a $600 a month reduction. I knew I had done a good job of documenting and making it make sense. And I knew the program so I should qualify for it. So I basically declined it. And it was the first one I ever really declined but I formally declined it with a hand written letter that my wife and both signed and we said, “We respectfully decline this because it doesn’t help us and we want to re-apply and re-examine it.” So I expect to be hearing from them in the next 10 days or so. But that was a little bit of bad news.
And then also Ryan, I want to report on this kind of faster, better loan modification as long as we’re on that topic. We had one customer this past week, previously 3 weeks from the date that the application is submitted until the time the loan mod is delivered had been the record, Ric and Michelle in Lancaster, Pennsylvania got a modification delivered by FedEx to them 7 days (laughs) after they submitted their application for the mod.
Ryan Rockwood: I don’t even really know how that’s possible.
Mike Rockwood: I know.
Ryan Rockwood: Because I mean if we fax them things and they can’t tell us if they’ve received it.
Mike Rockwood: Yeah for 3 days.
Ryan Rockwood: It took it 3 days so I mean God bless them.
Mike Rockwood: Yeah.
Ryan Rockwood: That was really cool and what was really exciting about that was that these people were really in trouble.
Mike Rockwood: Yeah.
Ryan Rockwood: They got multiple houses, do you know that? Do you recall?
Mike Rockwood: Yeah, they had several houses and they had a very big mortgage. This was not insignificant. And another point I want to make about this one is it was a jumbo loan and all those folks with jumbo loans, all the Californians and all the Floridians and others who have the jumbo loans, need to be encourage by the fact that all these rules that apply to Fannie Mae and Freddie Mac FHA conforming loans are being applied to the jumbos. Don’t let people tell you they’re not. People say, “You know there’s no help out there for the folks with the jumbos.” Well all of the investors are following the same rules. And of course they would. Why wouldn’t they?
Ryan Rockwood: Now what about the specifics of this one. I know these folks had some things that initially they thought this is going to be a block for us. We’re they doing multiple properties on this one?
Mike Rockwood: No.
Ryan Rockwood: I can’t remember.
Mike Rockwood: No.
Ryan Rockwood: ‘Cause didn’t you tell that their mortgage was like $8,000.
Mike Rockwood: Yeah, the difficulty with this one was they had some income issues. They’re income had declined very rapidly during 2008 but now in the last 6 months had come back and they were self-employed. So that’s always a little bit dicey in terms of for the underwriter at the lender providing conclusive proof that this is documentable income. So they had a little bit of an issue there but they got their bookkeeper involved, their accountant involved and got it that all straightened away.
Ryan Rockwood: So basically you want to go into more details of that?
Mike Rockwood: No, I think we should wait until the finalize their modification
Ryan Rockwood: Okay.
Mike Rockwood: I’m so arguing with the bank over about $900 worth of monthly expenses.
Ryan Rockwood: Monthly. Okay, well just a quick overview. They set the record for getting a loan modification. They got a fantastic loan modification.
Mike Rockwood: Yeah.
Ryan Rockwood: This thing is not like -
Mike Rockwood: I think it was $2500 bucks a month.
Ryan Rockwood: Not $2500 a month off of their payment and based on our plan they actually rejected the offer. So, they rejected the offer because it was the first offer and that’s one of the things that we teach people that we’ve experience is that you could do often better than the first offer. And so it’s just really exciting, you get this thing back in one week and then it’s a wonderful loan modification and you just start to feel like wow maybe we’re in the driver seat again here.
Mike Rockwood: Right.
Ryan Rockwood: And these people really still not wait too ‘cause they also had a huge income.
Mike Rockwood: Yeah.
Ryan Rockwood: Again, they had -
Mike Rockwood: They were back.
Ryan Rockwood: They had it but they were back. And so their thinking was there’s no way we’re going to get out of this thing.
Mike Rockwood: This jam.
Ryan Rockwood: So anyway, a lot of the – before you give up on yourself, it’s worth a shot.
Mike Rockwood: Hey, Ryan let me make a couple more points here about the resulting kind of street level impact of the President’s Program. I said it was going to be faster. I said it was going to be better. And I said it was probably going to me more standardization. And I want to talk about that for a minute. I had the opportunity to interview a lost mitigation manager at Wells Fargo Bank and he was telling me that they have – you know how we have 4 months I’ve been talking about the 7 criteria that are use for qualifications for loan mods. He says that now they have effectively boiled it down to really primarily just one. And there are really 3 parts to it. It has all to do with your income now because hardship has become so easy to document because so many, many, many millions of people are making less right now than they did just 6 months ago. So he says they’ve really boiled it down to 3 things. And these are they’re using kind of as a go, no go test for their loan mods. And here’s what they are:
The first one is disposal income. And I hadn’t thought about this one in the past although we’ve always advice people about this. Here’s what they do. They take the budget that you give them when you’ve called in for your prequalification call and they want to see disposal income of $900 for an individual and $1100 for a couple. Now we have never really focused on disposal income before but from now on we will. And that makes me glad that we print on demand, our book.
Mike Rockwood: Yeah.
Ryan Rockwood: Because we upgraded each week. And so these latest tips can be added. But disposal income -
Mike Rockwood: That’s a good point ‘cause you’re looking for who the help – for who to turn for help.
Ryan Rockwood: Our loan modification kits are actually printed on demand and so we are updating it.
Mike Rockwood: Every weekend we -
Ryan Rockwood: At least every week.
Mike Rockwood: At least yeah. But get a load of this. So disposal income should be at least $900 and now that is income beyond your debt. So anything, all your expenses beyond death and remember there are several items that most of us would consider necessities that the banks aren’t considering necessities. The one that always surprises me is life insurance. So life insurance they consider discretionary and of course, your club memberships, entertainments, savings for Christmas, savings for vacation, all those things, charitable contributions, those are all discretionary. So take those out and you still should have $900 to $1100 in gross disposal, $1100 for a couple.
The second factor is –
Ryan Rockwood: Well let me pause there for a sec is that it might confuse a lot of people. One of the things that is kind of counter intuitive in this process is it’s not usually hard to show that you don’t have enough money a loan modification. Interestingly enough we do have to do a lot of work to make sure appear to have enough income to qualify to for a loan modification. I just make that quick point if that confuse you there, you do have to show that you can make that modified payment. So that’s the important thing to-
Mike Rockwood: Yeah.
Ryan Rockwood: -to keep in mind.
Mike Rockwood: And there’s a target you have to hit. You have to have Debt to Income ratio of certain factor and you have to in this case Wells Fargo is saying they’re using disposal income as another guide.
Now the second thing that he says they’re using they’re fast tracking any applications that have a gross debt ratio that would be what commonly refer to as DTI, your Debt to Income Ratio which is the monthly amount you spend every month divided by the gross household income that you can document. Under 60%, if it’s under 60% he says they fast track it. Now we know and we have experience with clients getting loan modifications with DTI of up to 79%, that’s our highest one.
Now he says they also fast track, the third point is if their housing debt in under 50%. So that is the housing that you take you take your first and second mortgage divided by your gross household monthly documentable income. So that’s just more information about how Wells Fargo is standardizing things, speeding things up.
Ryan Rockwood: All right, well I don’t know about the hooks on this call but I just kind of like wake myself up out of a coma for after what you said. Honestly, the DTI, the disposal income, I honestly, I would rather jump off a clip than learn about these things and it just make it sound like a loan modification is way too hard to get and I do want to remind people that you don’t have to understand all these stuff. Basically get help no matter where you get it from and they’ll lay it out very simply.
Mike Rockwood: Yeah. And particularly in our workbook it’s paint by number simple. You just fill in the blanks because we’ve done it so many times that it is simple.
Ryan Rockwood: Okay.
Mike Rockwood: Okay we should move to the 7 Secrets.
Ryan Rockwood: Okay.
Mike Rockwood: You’re ready?
Ryan Rockwood: Yeah, so let’s do it.
Mike Rockwood: All right now, folks what we have done here is kind of boiled down because everybody likes to have things boiled down to few, few items. And what we’ve compiled here is 7 items that we want to be sure all of you are aware of with regards to loan mods.
Ryan Rockwood: Okay, and these are real – these are good secrets too. They’re not like tips on DTI and real academic hardcore financial stuff.
Mike Rockwood: Right.
Ryan Rockwood: This is stuff that people can wrap their mind around.
Mike Rockwood: Yeah you can use these things.
Ryan Rockwood: (Laughs) Okay.
Mike Rockwood: The first thing is that there are no, the first rule or the first secret is that there are no rules. And this one is really important, you can study, you can Google until your fingers fall off, you can be in chat rooms and blogs and talk and learn about all the rules and the next day have a rule broken. When things are as confusing and as dynamic as this industry is right now, there really are no rules. Street smart homeowners should really get on a bleeding edge of this thing and by that I mean you should be a pioneer, you should be asking for extraordinary things. This is what I was talking about Ryan when I was trying to explain to you about getting out of line. How most of us are just kind of programmed to getting inline like we get in line for our rebate check and we get in line at the grocery store and we get in line everywhere.
Ryan Rockwood: Yeah.
Mike Rockwood: Well with regards to loan mods, I want to encourage our clients to get out of line.
Ryan Rockwood: Well we were talking about earlier. I was saying that I did think there was a temptation to kind of wait for that rebates check in the mail but you reminded that you don’t get that rebate check until you file your taxes.
Mike Rockwood: Yeah.
Ryan Rockwood: And that’s a very important thing. You’re not going to get a loan modification unless you apply for it.
Mike Rockwood: Yeah.
Ryan Rockwood: And the money is going to let out and there will be a whole group of people that are left out. And the real big thing will be what’s going to happen to those people. Who can say? But better to be in the first group.
Mike Rockwood: Okay now it relates to a psychological concept that I want to introduce here. Not that I’m a psychologist or anything like that but I am something of a student of adult learning. And this concept is learned helplessness. And we learn it because we all have been in line, we all have been conforming and frankly for the last 10 years, really for the last generation, the economy has treated us all pretty well. And so we’ve kind of learned as helplessness. It’s a psychological term about how we – it’s a concept where if you’re in handcuffs long enough even after they’re taken off, you hold your wrist together, well by the same – you know you can use that analogy to describe how we are all kind of waiting for the government to help us with the bailout money. The bailout money was given last fall and in the last few months, and it’s there available and a lot of folks are just not applying or they’re not being very aggressive in their application because they’re in line. And they’ve kind of learned this helplessness. You know what I mean? That we just get in line. Well, on our application process, we encourage people to get out of line, get to the front of the line by being and getting on the bleeding edge. That’s what I call it.
Ryan Rockwood: All right, so there was a -
Mike Rockwood: Okay so that’s the first rule. There are no rules.
Ryan Rockwood: (Laughs) yeah.
Mike Rockwood: Mike’s shrink corner. All right, the second one is that almost all fees are bogus. I want to encourage everybody to do what we have now has become standard practice for us when we do [Inaudible – 00:32:12] express application and that is with a qualified written response, as soon as we get our loan mod offer, we ask for an itemization and justification of all fees. And I got to say that we are seeing fewer and fewer and fewer fees. 4-5 months ago we were seeing like 4 and $500, 6 and $800 routinely being added as an unjustifiable fee. It will just be called, let’s see it will part – put in like with escrow charges or something like that because very often -
Ryan Rockwood: There was an escrow charges right?
Mike Rockwood: Well, yeah very often they’re recalibrating your escrow account. Your inbound account, so there are escrow charges, there’s interest charges and then really any other charges are probably bogus and you should complain about them and gosh our clients have had good results in complaining about them and getting them wipe out.
Ryan Rockwood: You know what occurs to me, that’s not going to help people who haven’t started yet.
Mike Rockwood: Yeah.
Ryan Rockwood: We probably should back up, what’s happened is that the banks have been doing loan mods for the last year and they’ve been underhandedly it turns out tucking a lot of bogus fees onto the backend of them. And a lot of people did not know that was happening and so we’re just drawing that your attention.
Mike Rockwood: Right.
Ryan Rockwood: That even when you do get that loan mod, even if payment is reduced, got to look at that loan modification and make sure that – obviously this is kind of a minor thing but why have an extra $5,000 slap on the end of the loan. You’ll have to deal within 30 years if you can get out of it, okay? So, moving onto number 3,
Mike Rockwood: Okay number 3 is, yeah number 3 is that most loans already have RESPA and TILA violations. That’s the Real Estate Settlement Procedures Act and Truth in Lending Act. They have violations.
Ryan Rockwood: Well this is about those commercials that we’re hearing that says we’ll do a forensic loan audit and your loan is probably illegal and we’ll get you out of it.
Mike Rockwood: Well yeah, and -
Ryan Rockwood: They cost a lot of money.
Mike Rockwood: Well yeah, it’s really a come on from the attorneys because the truth is up to 70% of the loans currently in effect have violations of the Truth in Lending Act and RESPA. So it really is kind of a paper tiger and it is being used by attorneys as a way to get clients and so often I find that the clients then get suckered in to other billable hour services that just produce billable hours like counseling, at financial counseling or bankruptcy counseling, etc. So, you really don’t need to prove that RESPA and TILA violations occurred, they very likely did. I mean if you get back into a corner and need to prove that or need to pull that out as a last resort in your fight for a modification, you can do it but you certainly don’t need it upfront.
The fourth one, you have a right to timely and thorough written response to you inquiries. This is called a qualified written request. And a lot of folks don’t realize this that when you put something in writing to your lender, you are guaranteed that you will get a written response from them within 20 days. And the written response may or maybe that they received the request and that they’re processing it. However, you have right to that 20-day response and then they must response to it intelligently or thoroughly at least within 60 days. So it’s a guaranteed right. And that’s the reason I always encourage people to put thing in writing. Like your hardship letter? That’s a qualified written request. We encourage people to use a qualified written request when they ask for additional concessions and when they ask for itemization of any fees. So you do have – you have a lot of rights under RESPA and TILA. And that qualified written request is one of them.
Number 5 is that principal reductions are possible. But man, I got to tell you, they are so few and far between and none of us seemed to be able to figure out when and why they are occurring. I routinely asked for principal reductions and routinely get refused. But about ½ of 1% of the time, I’m not really sure why we do get them. So remain hopeful and diligent.
Ryan Rockwood: (Laughs)
Mike Rockwood: But I can’t tell you why it’s happening.
Ryan Rockwood: But we can set you up so if it’s going to happen it will (laughs).
Mike Rockwood: It could happen, yeah.
Ryan Rockwood: It’s that you’ve gotten -
Mike Rockwood: Yeah.
Ryan Rockwood: Principal reduction.
Mike Rockwood: Yeah and in that case it was -
Ryan Rockwood: On a rental property.
Mike Rockwood: It was a bad loan that was bought from Freemont, bought by Litton, and I theorized the Litton people wouldn’t say why, but I theorized that because they bought it for dime on a dollar they were willing to give – renegotiate some of it to me to increase the likelihood that I would make good on it.
Number 6 is the first offer is always unacceptable. And while I still think this is very, very valid, I want to caution everybody that with increased standardization I think this is going to become less and less the case. But I still encourage everyone to ask for additional concessions even if it’s really small. Even if you’re asking for the modification to start 30 days later, even if you’re only asking for an extension from a 5 year to a 6 year or even if you’re only asking for 4.25% interest rate to be written down to 4.0. So even if it’s very small additional concessions I encourage everybody to continue to ask for those.
Ryan Rockwood: You know this sounds a little scary ‘cause it’s kind of like negotiating a job offer or something where you think, well maybe if I go back and ask for more they’ll just say forget it.
Mike Rockwood: You’re exactly right.
Ryan Rockwood: So has that ever happened?
Mike Rockwood: Yes. In fact, here’s very clear advice on that. You want to ask immediately like within 24 hours and you don’t want to let the clock run out on the offer that you have in hand. You have to be very pushy to either get an extension on that or to meet the deadline. Usually they expect you to respond within 2 weeks and so you have to begin to communicate on that real clearly.
Ryan Rockwood: And then you have to get that in writing.
Mike Rockwood: Yeah. Always get things in writing. But you got to move quickly.
Ryan Rockwood: One of the benefits of having an advocate or someone who’s been there is that it’s kind of like an agent or something negotiating for your job that will work. You don’t know what other [Inaudible - 00:38:45] are making, same kind of thing. What we have is a basic list of common negotiation concessions. Is that right?
Mike Rockwood: Yup. And those are ones that clients have successfully negotiated.
Ryan Rockwood: Okay.
Mike Rockwood: And number 7 is your hardship hardly matters. And by that I mean that it has become so easy to pull a hardship out of a client. It seems like I don’t remember when the last time a client called me asking for advice that I couldn’t figure out that they have a hardship. And the lenders know that too. So in fact, hardship hardly matters. Don’t spend a lot of time on your hardship letter just make sure that it conforms to our advice format. That is that it be handwritten and that it address the 5 question that we asked in the workbook. You know what I mean? When did your hardship occur? What is your hardship? How does it relate to your not being able to pay your mortgage? When will it be or will it ever be rectified and how much help do you need?
Ryan Rockwood: All right. Now let me stir everyone over to our website for a copy of this document if you like it. Our website is 60minuteloanmodification.com/7secrets.pdf. I don’t know if we can make that anymore confusing. So it’s 60minuteloanmodification.com/7secrets.pdf (laughs) you can always e-mail us if you can’t find that. But hopefully you’ll get that. So shall we just jump right into questions and answers?
Mike Rockwood: No you know Ryan I still – I don’t want to -
Ryan Rockwood: Sorry,
Mike Rockwood: I don’t want to skip this news worthy notes even though I know we’ve gone a little bit longer than we wanted. Let me just run through them kind of quickly.
Ryan Rockwood: Okay. Stories from around the country that should inspire people (laughs).
Mike Rockwood: The one I want to make sure everybody hears about because it’s kind of fun but kind of overrated as this produce the note strategy. It kind of went across all the wires a few weeks ago as having been such a powerful solution for folks in Florida and it’s been use in Florida really effectively. But here’s how it works. If you need additional time and you’ve kind of run out of all of your options and you need additional time, produce the note is actually a legal proceeding that whereby the judge agrees with you that there may be a reason that the lender cannot in fact prove that they own the note and so the judge allows you to file a -
Ryan Rockwood: Let me back that a bit-
Mike Rockwood: -produce for the document -
Ryan Rockwood: The simple thing is it’s for technicality, is it not?
Mike Rockwood: Yeah.
Ryan Rockwood: You’re asking them it’s -
Mike Rockwood: That’s exactly right. It’s a technicality to stall and the people in Florida report that sometimes they can keep the foreclosure at bay for as long as a year. But remember it is just keeping it at bay most of the time. I guess in the selling and reselling and reselling of the mortgage, I guess sometimes the documents if they are actually in paper, the original ones, are very, very hard to locate because now they invest or may be some I don’t know some teacher’s union or maybe some foreign investor or something because it’s been split up and diced up and resold so many times it’s part of a mutual fund or something. So to actually ask the owner of the note to produce the original document that had your signature on it, I guess is kind of difficult and always takes at least a couple of weeks even when it’s saved electronically. So the produce the note strategy isn’t without problems. So it is especially useful in judicial states, California of course is a non-judicial state so it becomes extra specially difficult for us to get a judge who would actually take those steps and a lawyer who would actually go to bat for you and there’s also added expenses. But in a judicial state where you’re already working with lawyers and in a judiciary system, it can be a method to forestall things. So I just want to make sure that people are well aware of it. It’s called produce the note. Kind of ironic isn’t it I mean ultimately they can’t even find the document?
Ryan Rockwood: Well I can’t find my taxes or anything so I’m not surprise.
Mike Rockwood: Okay. The other thing I want to do is because this past week I have heard from a couple of folks that are in the refinance, in the middle of refi and I want to be sure all of our members are clear on the difference between a refi and a loan modification. I don’t know why anybody would pursue a refi at this time without first trying a loan modification. They both take about exactly the same amount of time, the loan modification does not require your credit score, it doesn’t require an appraisal, it doesn’t require escrow, it doesn’t require a title fee, there’s no broker involve. There are absolutely no lenders fees involve. It is free. So I guess I’m not really clear on why anybody would pursue a refi without first pursuing a loan mod. I supposed some people are of the notion that you absolutely have to hurt your credit by missing some mortgage payments, maybe that’s the only argument for it.
Ryan Rockwood: Yeah it’s probably savages caught up in that past thinking that the credit is so terribly important and-
Mike Rockwood: Yeah.
Ryan Rockwood: -it would be much better to be a couple of $100,000 in debt than to have a credit ding.
Mike Rockwood: Yeah.
Ryan Rockwood: You know that’s obviously just ridiculous.
Mike Rockwood: And then Ryan I want to bring to everybody’s attention a couple of income items that I work on this week. And one of them is that on a couple of occasions one was Countrywide and one was Wells Fargo, they accepted a contribution letter one from a parent and another one from a spouse. Remember if there’s only spouse on the loan, the other spouse can write a contribution letter stating how much they will contribute to the household income every month or a parent can do that for a child. Another customer in Atlanta wrote or had one written by a brother who’s willing to subsidize her because she was out of work and he was going to give her like $1200 a month.
Ryan Rockwood: So if I’m understanding you these are people, the problem with these people is they don’t have enough money -
Mike Rockwood: Yes.
Ryan Rockwood: -to qualify for a loan mod like we mentioned earlier, right?
Mike Rockwood: Right, so she had several thousand dollars a month in part-time income but she needed a little more.
Ryan Rockwood: Kind of like a co-signer or the opposite way or something like that.
Mike Rockwood: Yeah, but it’s just with regard to income.
Ryan Rockwood: Well that’s really cool because a lot of people are in that situation.
Mike Rockwood: Yeah. And then the other one is I want to remind everybody that a spouse’s lost of income is a hardship. If you’re the only one on the mortgage and you spouse loses their job or gets a reduction in their income, that can be use as a hardship for you because then you incur additional expenses, all right?
Ryan Rockwood: So hardship isn’t hard to prove, loss of income or decline of income is by far 90% maybe-
Mike Rockwood: Yeah.
Ryan Rockwood: The most common hardship I mean just boom, off the bat. So,
Mike Rockwood: All right, that’s that it for me. [Inaudible – 00:46:07]
Ryan Rockwood: All right, let’s take questions and answers. I do have some that we have from e-mail but we might as well, we got a lot of people on the call. So what I’m going to do is unmute the call and please be brave and speak up and hopefully we can help you and you don’t have to say your real name if you don’t want, you could and just tell us your first name and what state you’re calling from and we’ll just get right into it. It’s going to be kind of a mess because everyone can speak at once. So everyone will have to kind of work together a little bit but just kind of throw it out there, I’ll unmute the call here. Give me one sec.
Female: Hello? I want to know about lawyers, hire a lawyer.
Ryan Rockwood: Hi! (Laughs) Okay first question.
Male: I have a question.
Ryan Rockwood: Go ahead Sir.
Male: My question is it sounds like for the modification that you have to show that you have current distress or hardship. What if your situation is that you have been able to maintain your mortgage payments yet you’re looking at wanting to refi, currently right now we have an interest of our primary home at 7% and we want to take advantage of the low interest rate that’s currently out there. What should we do from this standpoint?
Ryan Rockwood: Let me ask you this. First of all, how much equity do you have in your home if any?
Male: It’s about 2 ½ million.
Ryan Rockwood: $2 ½ million in equity, is that right?
Male: Yeah.
Ryan Rockwood: Okay so let’s just say that the home is worth theoretically 2 ½ million and it sells right now for a $1 million and you can sell at 500,000 on it?
Male: I’m sorry.
Ryan Rockwood: You think you could sell it for $500,000 more than you owe on it right now?
Male: Yes.
Ryan Rockwood: Fantastic. Good for you. Let me ask you this. What do you think about this? Is this –
Male: There’s a lot of static out there I can’t barely hear you.
Mike Rockwood: He can’t hear you.
Ryan Rockwood: Okay.
Mike Rockwood: Have you applied for loan modification?
Male: I’m sorry?
Ryan Rockwood: Let me unmute everyone right now. Okay so let me go over that. We’ve got a guy on the line here who is in a fantastic situation and he maybe one of the exceptions to the rule here about you’re saying who needs a refi instead of a loan modification. What do you think?
Mike Rockwood: Yeah, I think that’s clearly the case. You need to refi to get a lower rate and you are far and away the exception. You don’t even come close to qualifying for any of the guidelines that the President has laid out. You have so much equity in your home, very.
Ryan Rockwood: I mean it sounds really -
Mike Rockwood: You’re in a great position. That’s the good news.
Ryan Rockwood: Yeah, the good news is Dad refi is definitely in the work. Now it would not be a problem to get this gentleman -
Mike Rockwood: A refi?
Ryan Rockwood: -a loan modification if he had a hardship right now. Isn’t that correct? It doesn’t matter how much equity he has in the bank.
Mike Rockwood: That’s correct. If there was a hardship then you may qualify for a modification.
Ryan Rockwood: Okay, so let’s just go down that route for one minute. Let’s say that he’s income -
Mike Rockwood: Lost his job.
Ryan Rockwood: Yeah, lost his job. The bank is not going to say, “Why don’t you sell your home instead of the assets?”
Mike Rockwood: No.
Ryan Rockwood: The assets that enough?
Mike Rockwood: Enough.
Ryan Rockwood: Okay, so the question is basically I didn’t get your name but how fast can you get to your local realtor and sell your house? (Laughs)
Mike Rockwood: (Laughs)
Ryan Rockwood: Not to refi. Because you know that’s obviously, but it sounds like you’re in a great situation. So let me go on to the next caller. One sec I’ll unmute you.
Tina: What about hiring a lawyer this one’s $2500.
Ryan Rockwood: All right, go ahead Ma’am. Do you have a question?
Tina: Yes. How about hiring a lawyer? They want $2500 is that a good idea?
Ryan Rockwood: Good question. Let me – what’s your name?
Tina: Tina.
Ryan Rockwood: Tina, okay hold on one second. You know the question of a lawyer is a good one because a lot of times when people stop making that mortgage payment or get behind, suddenly they do have $3500, $5,000 and the lawyers right there and boom you could – it’s very tempting I can see. Mike, I mean I know I have certain thoughts on this. I’m not against lawyers by any stretch of the imagination. But what do you think?
Mike Rockwood: I always recommend, I think that it’s overkill for this task. I think that homeowners are better off doing this themselves number one, because it’s easy enough to do yourself and that you really just need some inside information. It isn’t really a case that you need an attorney’s services for this and it’s overcharging. Like I always say that I probably could use a Philadelphia lawyer to do my taxes every year but instead I pay $250 to have a local CPA help me because I think that’s the right amount of help. So I think that’s the correct answer. If you find that you do have some legal issue like fraud or you find that you cannot get a modification through normal processes, then I would recommend seeking legal help.
Ryan Rockwood: You know this whole thing about the lawyer is a little bit tricky. I mean it takes a lot of explanation because this woman was approach by a lawyer presumably $3500, you could get a loan mod. And a lot of people would say well that’s a rip off. That’s not really a rip off if she gets a good loan mod, right?
Mike Rockwood: Yeah.
Ryan Rockwood: That’s a value. You know that’s what this is worth. Our book cost 100 bucks I mean it’s a real value (laughs). The key thing to remember is that [Inaudible – 00:52:13] solutions are super expensive it doesn’t mean they’re scams. Now that said, a lot of the loan modification companies that we’ve ran into or people who have contacted us after going to one of them, what we’ve found is that unfortunately they didn’t do the best job for them. What we believe is that people should do their own loan modifications. And if you pay us a ton of money we will help you do it basically you’ll be done in a day. But we really recommend you just buy the $100 book, educate yourself a little bit and do it yourself because no one cares more than you about you. And the big thing is that the loan modification companies, the lawyers, they need to turn through clients, just like anyone does. I mean we’ve worked as realtors for many years the same thing applies, you have to – just to keep the lights on you have to turn through clients. So what we’ve seen is them encouraging their clients to accept the first offer that come their way and other things and so on. So the worst thing from a bank’s perspective is an educated homeowner.
And another point that I’d like to make on that is that an unintended benefit of getting a little bit educated and doing the loan modification yourself is that you can do it next time around too. What we’re moving into is kind of a new era and it’s very likely that in 5 years, in 2 years, you’re going to do have another loan modification. So if you obviously get on a hook on a lawyer, you can call him back in a couple of years and he can do it again for you but you still owe another 3500 bucks. It’s pretty nice if you can do it yourself in the meantime. And once you get it done, our whole thing is that all the preparation really only takes 60 minutes so 60 minutes of work, send that application off, then everything’s together. So if you need to do another modification on down the line, you’re in good shape. You think I miss anything there?
Mike Rockwood: No.
Ryan Rockwood: Okay.
Mike Rockwood: Very well said.
Ryan Rockwood: Okay. Now everyone if you could please help me by not talking and talking amongst yourself while I unmute, we’ll take the next call. Hi there!
Female: [Inaudible – 00:54:26]
Ryan Rockwood: Okay lines everyone.
Mike Rockwood: Who’s that?
Ryan Rockwood: Who’s next?
Mike Rockwood: Ryan [Inaudible – 00:54:37]
Ryan Rockwood: Hey Jessie we I think we might have exchange an e-mail.
Jessie: Can I ask a question?
Ryan Rockwood: Yeah go ahead, ask your question.
Jessie: There’s a lot of noise in the background.
Ryan Rockwood: Yeah, just try to get – everyone to please be as quite as possible here for a minute while I get Jessie’s question and then I’ll unmute everyone again.
Jessie: Can you repeat the 7 Secrets website? 60minuteloanmod.com/pdf?
Ryan Rockwood: 7secret.pdf. So it’s –
Jessie: [Inaudible – 00:55:28]
Ryan Rockwood: Yeah, its 60minuteloanmodification.com/ – okay sorry about that guys we’ve got some wicked feedback on the line. The website is 60minuteloanmodification.com/7secrets.pdf. And you know what? If the static is so bad that we’re unable to complete this call and help you Jessie, please be sure to e-mail me, okay? And that goes for anyone in this call. You can e-mail at help@60minuteloanmodification.com. That’s 60minuteloanmodification.com and that is the number 60. Okay everyone also turn off your speaker phone if you have it on speaker phone and I’m going to unmute and we’ll see if we can get Jessie’s question.
Mike Rockwood: I think that was his question Ryan.
Ryan Rockwood: No, I bet he had another one.
Jessie: Just to understatement – [Inaudible – 00:56:41]
Ryan Rockwood: Hi Jessie. Yes, Jessie did you have another question?
Jessie: Yeah, here’s the question. [Inaudible – 00:56:55]
Ryan Rockwood: (Laughs) okay Jessie? Just send me an e-mail. Let’s just exchange e-mails. I’m so sorry about that. It might be the [Inaudible – 00:57:05] Can I take another call?
Barney: This is Barney from California.
Ryan Rockwood: Hey Barney.
Barney: My question is [Inaudible – 00:57:24] what stops the foreclosure process from proceeding in a new time?
Ryan Rockwood: Okay, if I understand you, you’re asking, how can you make sure that home isn’t foreclosed upon in the meantime?
Barney: Yes.
Ryan Rockwood: Okay great question. Hold on one sec and reminder everyone, turn off the speaker phone. Okay I think that was Barny in California and I think his question was this – okay it sounds like he wants to do a loan modification but foreclosure is eminent and he needs to stop it. And I hear you Barney, we’ve been there and actually we stopped it I think right up the day before. Now it all depends – let’s say for the sake of argument definitely e-mail me at help@60minuteloanmodification.com Barney. But let’s just presume for a minute that the foreclosure isn’t like tomorrow because if it is you can’t – we can actually help you but you will have to declare bankruptcy. But let’s just assume you have a little bit more time. What you want to do is you want to get that application together tomorrow. You want to get it into your bank and then you want to go ahead and hopefully you’ve got some numbers of people that you’ve probably been avoiding at the lost mitigation department of the bank and we got to get on the phone with them. And we got to talk to them about it, we have to confirm if they have receive your package and we have to confirm hopefully in writing that they will agree to postpone it. Now they will only give you 30 days but don’t worry, about that because they kind of just keep that rolling deadline there to kind of keep themselves in the position of power. We’ve had a 30 –day deadline go on for like 8 months. So that’s no big deal we can keep getting it push back, keep getting push back. But we have to just alert them to the process that is in worse. Now one thing that I would caution you on is that we have had – it sounds incredible but we have had houses accidentally sold at auction. The lost mitigation department said, “Okay, sure we’ll postpone that sale and the action house didn’t get that instruction and the house is gone. This happened to a couple of houses actually. And those were just the worse, and so get it in writing if you can. Okay let us know how we can help.
Mike Rockwood: Well then you have to double check everything. You really have to be all – really on guard during that process if you’ve had a notice of trustee’s sale, you have to be really on guard because things can just go wrong. You have to be talking with everybody, notifying everybody in writing.
Ryan Rockwood: Yes, it’s not enough to call the bank. You have to make sure you called the auction house and confirm that they have received the duh-duh-duh. Okay? And so I hope that answers your questions. If you have a more hardcore issue where something is more eminent, just alert us to that in the subject line of the e-mail and we’ll see if we can help you out. Okay, let’s unmute everyone again.
Karen: Yes I have a question.
Ryan Rockwood: Just go ahead.
Karen: I’m Karen from California.
Ryan Rockwood: Hi Karen!
Karen: Hi! What point should you start the loan modification process if you are able to make payments towards your mortgage however in the foreseeable future let’s say 4 to 6 months down the line, you see problems because of hardship, because of lost job, but you’re able to make payments right now.
Ryan Rockwood: I understand. Okay, so if I understand correctly you have not stopped making payments.
Karen: Correct.
Ryan Rockwood: You have not stopped, okay. Karen what I’m going to do is to unmute here and we’ll come back in second and check and make sure that [Inaudible – 01:01:32]
Karen: Okay.
Ryan Rockwood: Okay Karen in California asked a question that we’re getting all the time now because if you’re like us, you work on commission, well so many people are self-employed or they’re called self-employed but they actually work for a company now and what we’re seeing is we have no assurance that our hours are going to be there, the sales are going to be there, pretty much all sectors of the economy are thinking fast. And all I can say to Karen is that don’t give the bank your grocery money. Planning this thing out from where you are, where you see it like 4 to 5 months down in the future is absolutely wonderful. I’m so glad you’re on this call because too often the people that are on the call are the people that have let it go a lot further. So you’re in the position of power,
Mike Rockwood: I think Ryan you’re reacting to the fact that we work with a lot of people who have max out their credit cards like just yesterday we’re talking with somebody who has gotten to $40,000 in credit card debt just struggling to keep making that payment and they say well how can you help me? How can I stop the bleeding? And we say, and our thoughts of course are they should have started much earlier. If you have had a reduction in your income, you should start immediately to talk to your bank. In fact, that’s what the President is really encouraging and giving a lot of financial incentives to the bank to strike deals with people before they go late ‘cause it’s in everybody’s best interest.
Ryan Rockwood: Yeah, I don’t know about – I don’t mean to sound [Inaudible – 01:03:16] because I was the worse of this. When I had to short sale my house, I was smart enough to stop about 2 months beforehand and saved my money. You know what I mean (laughs)? So it’s like I was too darn smart or anything like. You know I hear you. I feel your pain. You want to make good on your agreements and all that kind of stuff but here’s the thing. You want to start the loan mod today. And you want to do it right now and you want to get a loan mod in a month. And if in fact you run into a roll block that many, many of clients run into and that is they don’t get a good loan mod because they’re not behind on their payments. Then you think very seriously about becoming behind on your payments. And that’s obviously a decision – you know we’re all so addicted to our credit scores and all that kind stuff but that’s really hard for people to do but the values with the real estate – real estate values are going nowhere but down fast. And obviously you got to put in the position of strength as opposed to – you don’t want to throw good money after that.
Mike Rockwood: Well and the other thing Ryan is that so many people can minimize the damage to their FICO score if you plan ahead and the dominant issue with regard to FICO damage is recentcy in other words how recently have you had problems? So my advice to people always is if you’re going to miss a mortgage payment, get it over with and so like in your case to apply before your late and then if you have to go late, then you go late as late as possible and get it behind you.
Ryan Rockwood: And you know what I found too is that you enter it into a different into mind that you through the horror of, “Oh my Gosh, I can’t make my payment. Let me tell you, you start to get okay with that pretty darn quick. You realized, hey this is a business decision. I entered into this with the bank. The bank didn’t lend me the money on the house because they thought I was not qualified but I was a really nice person.” You know what I mean? And the same thing goes with the bank. It’s just a business decision, it has nothing about you as a person and anyway there probably be a lot more than you wanted to know (laughs).
Mike Rockwood: Why don’t you unmute and see if I got a caller Ryan?
Ryan Rockwood: Yeah, let’s see. Hey Karen did we help you at all?
Karen: Yes you did thank you.
Ryan Rockwood: Call us anytime if you wish. All right, next question.
Male: I have a question.
Ryan Rockwood: Yeah, go ahead.
Male: I have 4 loans actually I have 2 mortgages and 2 HELOC on those mortgages and I asked to get a loan modification on one, the higher mod is 4.5 now I understand that I can get one for less? I don’t know if I should go back and do that and what about the other loans I did?
Ryan Rockwood: Well Mike, don’t you?
Mike Rockwood: Yeah, a good one. What I’ve done in that – what I recommend is [Inaudible – 01:06:32] Sorry about that. Okay so I think this is a little more clearer if we do it this way. Okay what I have done -
Ryan Rockwood: Why don’t you repeat the question in case anyone couldn’t hear that because of the static?
Mike Rockwood: Okay, the question is he has 2 mortgages and 2 HELOCs probably 2 properties. And on one of the first mortgages he got a 4.5 modification and now he’s kind of contemplating whether or not to go after a better modification there or to take off after the other 3 loans. And my advice would be to take off after the other 3 loans. That’s the process that I have use. I just took one after another, after another because now you’re in a better position to qualify for better modifications on the other 3 because you’re payment is lower. So you have more income, so you‘re in a stronger position to get better modifications. And then circle back on the 4.5 after it is 3 to 6 months old. Then you’re in a better position in terms of aging of the 2. Let’s see if we got that question right Ryan.
Ryan Rockwood: Okay I’ll go back in a sec but what I should say is that it’s almost like triads, right? You just have to go after everything that hasn’t been help yet and then possibly return to the 4.5 killer, congratulations on that, congratulations on going for that, that’s super. The other thing is that the HELOCs are almost – well for 80% of us anyway they’re over mortgaged property. And so you do have to figure out at some point are you going to pay the HELOCs at all is one issue. And now that maybe for a couple of years down the line but I’ll just throw that out there. We can talk more about that if you’re interested by e-mail.
Ryan Rockwood: So did that help at all? Did we get to you?
Male: Yes you did. Thank you.
Ryan Rockwood: Okay, thanks for joining us by the way. Anyone else? Don’t be shy. This is your chance.
Mike Rockwood: I’m glad we’re going to be together tomorrow.
Ryan Rockwood: I think someone is talking.
Mike Rockwood: I’m glad we’re going to be together tomorrow afternoon at about 4 available ‘cause people really do that [Inaudible – 01:09:17]
Albert: I’ll make a question.
Ryan Rockwood: Go ahead.
Albert: Okay, Mike, by the way hello, you sold me out about a year ago.
Mike Rockwood: Excellent.
Albert: I have a question for you. The question is [Inaudible – 01:09:40]
Ryan Rockwood: Can you say that again?
Albert: The loan modification available when you’re renting property.
Mike Rockwood: Okay Albert, listen I really apologize about what I said about lawyers. Albert is a lawyer.
Ryan Rockwood: (Laughs) Now you were saying Dad.
Mike Rockwood: Albert, yeah, the truth is that first in line our owner occupied properties. But I have 4 other properties now that are rented and have gotten modifications on 3 of them. One of them I am having a little bit of a trouble with because it was clearly never intended to be owner occupied because it was a 10-31 exchange. So I’m having a little bit trouble getting a modification there but on the others I applied for a modification just standard modification and in fact recently I was encourage by one of them to reapply because they have programs now that are even better. So the answer is just absolutely yes, modifications are being granted not only on first but also on HELOCs on investment properties. So no matter how you finance that place on the peninsula there you can very likely get a modification for it.
Ryan Rockwood: And the thing that we jump out immediately is rents are going down. I don’t know how they’re going down. It doesn’t make economic sense to me. But I would presume -
Mike Rockwood: ‘Cause you’re income’s down, that’s hardship.
Ryan Rockwood: Yeah, I would presume that we just took care of your hardship for you right there.
Mike Rockwood: Yeah.
Ryan Rockwood: Hopefully you don’t already have one. All right. Let’s just keep them coming. Who else had a question?
Male: Ryan I got one.
Ryan Rockwood: Go ahead.
Male: [Inaudible – 01:11:54]
Ryan Rockwood: We lost you. Can you start over?
Male: Paper works for the loan modifications.
Ryan Rockwood: Yeah.
Male: [Inaudible – 01:12:06] can I use it as a burden?
Ryan Rockwood: Can you back up and say that again. I’m sorry we just got somebody else on.
Mike Rockwood: Okay start again.
Male: [Inaudible – 01:12:39]
Ryan Rockwood: Okay you know what? I think I got the – okay I think I got the gist of the question. I apologize if I box this but here’s the question I think. He spent $7,000 with a loan modification company, [Inaudible – 01:13:00] and it was not successful is my thinking. And he wants to know if he can use that as a hardship.
Mike Rockwood: I have no idea.
Ryan Rockwood: Wow that’s unfortunately original. But let’s think about this here. I mean it clearly sounds like it’s -
Mike Rockwood: It’s additional hardship Ryan.
Ryan Rockwood: Certainly considered as -
Mike Rockwood: Additional burden yeah.
Ryan Rockwood: Yeah, additional expense.
Mike Rockwood: I think it falls under the – there are rules category. Is whatever your initial hardship was going to be, add this to it, right?
Ryan Rockwood: Yeah. You probably going to need more than this obviously but you might have -
Mike Rockwood: But this is resolved now.
Ryan Rockwood: Yeah.
Mike Rockwood: And anybody-
Ryan Rockwood: You have to have something in the first place, right?
Mike Rockwood: Yeah.
Ryan Rockwood: ‘Cause I mean you went into this you thought I could a modification. And the hardship is really not the issue. So I’m confident that you can get over the hardship issue.
Mike Rockwood: Yeah.
Ryan Rockwood: And hopefully that was your question otherwise do send me an e-mail at help@60minuteloanmodification.com. One sec we’ll take a few more questions here.
Mark: Hey guys. My name is Mark. I have a question.
Ryan Rockwood: Yeah, go ahead.
Mark: [Inaudible – 01:14:50]
Ryan Rockwood: Okay, am I understanding here to say that you owe like private investors or hard money lenders or something like that?
Mark: No I apologize. We borrowed [Inaudible – 01:15:50]
Ryan Rockwood: I think I see what you’re saying. Now I’m going to mute it here so we can answer. Okay, I’m sorry about this technical issue. Please let me repeat the e-mail help@60minuteloanmodification.com and if anyone that’s called e-mails, we will respond as best we can and if we can’t we can call you up. Okay, now what I believe this gentleman was saying was that he’s got – sounds like many millions of dollars invested in real estate. And he was wondering if – he specifically said Washington Mutual, if Washington Mutual would somehow take into account the fact the he has multiple properties with them. That’s probably the best I can do based on the information that I got there. But what do you think Mike?
Mike Rockwood: Yeah I think not and here’s why. Because I think Washington Mutual probably doesn’t own any of them anymore. It’s something like 90% of the loans got resold.
Ryan Rockwood: And then Washington Mutual went out of business, or are they still in business?
Mike Rockwood: No Washington Mutual went under but now their Chase.
Ryan Rockwood: Okay.
Mike Rockwood: So I think the answer is no. I’ve never had any – even when the first and second are both with the same lender we have a hard time getting them to negotiate together ‘cause usually it’s the home equity division versus the home mortgage division. So it isn’t just coordinated as it should be. So I don’t think you’re going to have any luck there and I’m not so sure that that’s bad news. I think you might be able to play one off the other and do just fine.
Ryan Rockwood: Okay, we’ve got – and basically you would also hope that you could a package deal, roll it all up and do them all together, right? That’s not going to happen.
Mike Rockwood: No.
Ryan Rockwood: These are owned by many different people and actually WaMu was known for keeping it loaned. So it may actually be owned by the same person but probably not.
Mike Rockwood: It could happen I guess.
Ryan Rockwood: Yeah, we got a question e-mailed in here from Alfred. He says how do I get the paperwork?
Mike Rockwood: Okay.
Ryan Rockwood: From Alfred, how to do I get the paperwork needed from the lender? Do I have to call them?
Mike Rockwood: Yeah. All right now here’s the skinny on that. There’s a few thing you should do before you call the lender. The first thing is I recommend that you’ll assist him and they is not self-serving. I recommend you listen to my story and the reason you my story. It’s 60minuteloanmodication.com. Listen to the CD and I’ll give you some tips about loan modifications in 2009.
Second thing is be sure you withdraw all the money from any account you have with the lender you’re going to negotiate with. So, if it’s V of A or Wells Fargo or any of those guys, get any savings or checking account – don’t close them but just empty them.
Third thing is you want to prepare your budget because you want to be prepared for the questions they’re going to ask you. They’re going to prequalify you on the phone. If you past the prequalification then they will send you the paperwork. Now my 60-minute loan modification workbook has all the paperwork in it if you want to go that route and be completely prepared by the time you contact the lender. But finally, my final advice is you really want to talk to a lender sooner than later. So you should move through all these things in a couple of days and then get on the phone with the lender and then always insist on a prequalification call. That’s a call where you don’t put anything in writing; you don’t fill out any form online. You just talk to them about your financial situation and almost all of the lenders are insisting on a prequalification call now anyway. So they’ll be glad to do it with you. And on those calls, the reason I love them, they’re great opportunities because you can tell them your situation and yes, they’ll be entering it into a computer and yes they will hit a bottom that will send it off to some sophisticated calculation that tells you whether or not you qualify. But the good news is if they come back and they say no you don’t qualify, then you just simply ask them why don’t I qualify? And they’ll tell you exactly why so you can figure out whether or not you need to change some part of your story because you may have told them about a $1,000 worth of discretionary spending that you do every month and well next you call don’t tell them about that $1,000 discretionary income. So it’s a great opportunity and honestly the lender – keep in mind the lenders are compensated to make loan modifications. They want to modify. In fact, I had one client the other day who was told by the prequalification person exactly what to do. Call me back and change this part of your information.
Ryan Rockwood: Didn’t they say they have $200 more money.
Mike Rockwood: You have to yeah you need to $200 a month more income.
Ryan Rockwood: Okay so done. Now, we got to wrap it up. But I do want to acknowledge a couple of things coming in up at the website.
Mike Rockwood: Okay.
Ryan Rockwood: Alfred’s question I had totally wrong. Alfred I do understand the question now and it sounds like you need a hardship, that’s the bottom line. That’s no problem, let’s talk, just shoot me an e-mail I actually know your situation and we can come up with that. That’s basically the hardship is check by the lowest level of person at the bank, the first person. So we just have to get it to fit into a recognized, acknowledge hardship, nothing out of the ordinary. And for you we’re going to make it about declining income. And I know you’re going to say that you’re income hasn’t declined, however I know that you have some family members that have other work and I know that – well I don’t know that but if you like most of us these are self-employed people and their work has almost certainly declined. And that’s going to be an extra burden on you. Okay so that’s how we’re going to do it.
And Mark if I got your question, I’m sure I did got it terribly wrong. I apologize and I want to help you out. E-mail us at help@60minuteloanmodification.com. Okay, before I forget, let me make this special announcement once again. Tomorrow from noon to 4:00 we have a special kind of radio call-in type thing.
Mike Rockwood: Are we going to have better clarity on the line than we had?
Ryan Rockwood: Only one person this time actually. It’s not a group call. Everyone is individual 10 minutes max, please respect that. And the number to call is 3106027380. Call that number anytime tomorrow between noon and 4:00 o’clock and well be taking people if you get a busy signal, if you get a message machine, don’t leave a message, just keep on trying like a radio and we’re just going to deal with people one on one. This is free for everyone in our credit mastermind group which is 90% of the people on this call right now. Okay and I want to remind you that number is not a public number. So throw it away after tomorrow at 4:00 o’clock (laughs). Okay thank you so much all of you for putting your trust in us, for giving us an hour of your time. We’ll get you back to who wants to be a millionaire 2whatever is on the TV now. That was way [Inaudible – 01:24:00] what am I saying. Anyway, I want to thank everyone for coming out Mike?
Mike Rockwood: Yup, that’s it. And we’ll this transcribe and we’ll have it on CD by tomorrow evening.
Ryan Rockwood: Our website is www.60minuteloanmodification.com/products, you can see some of the things that we were talking about. People can get more help, can get started on this and I just want to encourage everyone to really take the first step and that’s the hardest thing is getting out of the mindset of, “Oh crap, what am I going to do?”
Mike Rockwood: Yeah, learned helplessness.
Ryan Rockwood: Yeah, do something whether you do with us or anyone. Do something, I really think there are – for a lot of the people we talked to, almost everyone we talked to on the phone here and had written in there’s a really high chance that your life can be improve dramatically buy a loan modification. And there’s a really high chance that you qualify for one. So with that I’ll sign off, thank you so much, you’ll be getting an update by e-mail on our next call.
Mike Rockwood: Thanks everybody.
Ryan Rockwood: Thank you so much. Bye –bye.
