Loan Modification TV | January 14, 2009

Recorded live!

Ryan Rockwood: This is the 60–Minute Loan Modification Members Only call and we’re excited to chat with you tonight. Tonight’s all questions, answers, and on the script and dialogue. Anyway, we had a good week and we want to share the latest results with you. Hopefully, you had a good week moving forward. I mean getting new questions, hitting new road blocks. If you’ve hit road blocks, at least they’re new ones hopefully, and hopefully we can help you get through, okay. My name is Ryan Rockwood. My father, of course, Mike Rockwood and this is the 60–Minute Loan Modification Members Only Insider Secrets Teleconference Series, all right.

Mike Rockwood: Every Thursday we gather here to talk to people who are familiar with our products and familiar with our attitude and familiar with what we do with regards to loan modification. We are the preeminent site and source for Do-It-Yourself Loan Modification. From the start, we have always advocated that you do your own loan modification and we are the source and you folks are the people who are really leading the charge in terms of do it yourself loan modification. As it turns out, as this whole thing has evolved, a Do-It-Yourself Program is a pretty, pretty strong argument. The government and the banks have argued that homeowners should be doing their own loan modifications that we advocated from the start. You can and you should. Some people can’t. So for those people, we also do loan modifications.

But we gather here on Thursday nights to answer your questions and to talk about specific topics related to loan modification. Like Ryan said we have had a lot of successes this week. It’s kind of good. It’s kind of good feeling to get the year off to a good start. We’ve had several approvals just this week. People with significant reductions admittedly, we had to fight very, very hard to get these modifications. It seems like nothing is coming easy these days anymore. Where is the wind fall? I don’t know. But we continue to fight the good fight and learn more and more streets smart tips and techniques every week that we try to pass on to all of you through this forum and on Monday night in The Foreclosure Doctor.

Our lawyer always wants us to emphasize that we are not lawyers. He is the lawyer, and you must call him and pay for him if you have a legal question. Don’t take what we say as legal counsel in any way and also do not consider us CPAs because of the fact that neither of us is one, am one, are one. So we’re not lawyers and we’re not tax advisors. We’re not tax experts. All we’re passing onto you is things we’ve heard on the street in working with our clients. We’re passing on best practices so that you can continue to do what I’ve always said you have to do in this loan modification frenzy. Get out of line. Get up to the front of the line. Make your application stand out so that you can get a good loan modification. Now Ryan, I came equipped with 10 questions that I got yet so far in the last hour. People are just after your e-mail, started in with questions. Do you want me to jump in to some of those or what’s your plan?

Ryan Rockwood: Well, I’ve got one from a guy named Anthony. Anthony is — it’s really he’s writing is he’s saying it’s hard to start the mod process because of lack of knowledge of the process. Everyone is offering plans, who want 2 grand and $45,000 upfront to start the modification. It’s hard to trust anyone. Finding a lawyer is a bad reps and get a yes from the bank. Please give advice. Anthony, you know that’s the product we sell, right. We do loan mod so you’re really thinking about doing a loan -

Mike Rockwood: It is hard to trust us.

Ryan Rockwood: If you’re thinking about doing a loan mod, there’s nothing upfront. You do have to buy the product to get the loan and to do loan modification with us but that’s not enough for a payment. If you’re unhappy with the product, you can return it within a year. Anyway Anthony, why don’t you give us a call and we’ll talk to you about it. It will probably cost you an average of $1,500 to $3,000 to have us do it for you. It depends on how much you save and you pay after only if you say. Okay? So hopefully, we just knocked down one of the ball part.

Mike Rockwood: Well you know, yes. It is really a pretty no risks situation, but here’s the one thing you want to do is be sure not to abandon your relationship with the bank after you hire us or hire anybody else to do your loan modification for you. Because really the only way you stay in touch with the process at all is at first every other week and then after the process is roll on pretty well. I think you can let it go for a month or so. But you should be contacting the bank just to verify that this third party is in fact working your modification. You want to know the date on which the application was submitted and in our case, you’ll know that very clearly because you need to sign absolutely every page of it. So when you work with us, we have full disclosure. We tell you exactly where you are in the process. Not that we’re God’s answer to a loan modification although we might be.

Ryan Rockwood: Yes, we really are.

Mike Rockwood: We could be. But you want to expect a lot from these third parties because you’re turning over to them the opportunity because this opportunity is not going to be around forever. My own estimation is that by the end of 2010, we’re going to be in such economic disarray that in fact loan modification themselves might even get suspended for awhile, at least the ones that are compensated by the government, all right.

Ryan Rockwood: Okay. Now, we got a big one here from Michael P. Okay. He’s got some math questions. Do you have a pen?

Mike Rockwood: I do, yes, without a calculator though.

Ryan Rockwood: Okay. No problem. I think it’s going to be pretty easy. Total income $6,200 a month, that’s including rental income. Okay. First mortgage PITI with IndyMac $2,406. The DTI in my first mortgage is more than the required 31%? It looks to me like it is indeed more than 31%.

Mike Rockwood: Yes.

Ryan Rockwood: Just barely.

Mike Rockwood: Just barely.

Ryan Rockwood: Yes.

Mike Rockwood: So it’s like 33 or 34.

Ryan Rockwood: Okay. So the good news is I guess that you qualify there. The bad news is being that you’re not going to get much relief, right.

Mike Rockwood: Yes. This is a little bit of a touchy subject. So Ryan makes a really good observation. So if you go in with a 33%, it’s going to be really easy for your lender to score big and earn $3000 bucks from the bailout money from the Making Homes Affordable Program by taking you down to 31% or just below 31% on that particular mortgage. They’ll be happy. You won’t be particularly happy because they’ll do that by just ever so slightly adjusting that first lever that they’ve got which is your interest rate. So you won’t get much of a reduction. So I am always whenever I’m real close to that 31%, I really always try to figure out a way to drive that higher. You know what I mean is — and particularly because you said you had rental income. Michael, did you say his getting on? Michael, particularly because you have rental income that is mishandled so frequently, I can’t tell you.

Ryan Rockwood: What do you think about that? Could he — is there a chance to get that separated out? Where are you finding that?

Mike Rockwood: Yes, I see.

Ryan Rockwood: Because I mean you get that $3,200 separated out and now we’re talking about…

Mike Rockwood: Yes.

Ryan Rockwood: 60%.

Mike Rockwood: Right. So it’s a game changer if you can present your rental income as a separate business with a net profit that you pocket.

Ryan Rockwood: Or net loss probably.

Mike Rockwood: Probably will be a net loss so it enters your budget only as one expense line instead of at the gross.

Ryan Rockwood: Okay. So in other words, we try and I don’t know if we can say we we’ll always go back at [Indiscernible] [0:09:37] list. Have we ever had success on that?

Mike Rockwood: Yes, we have but not with — and I don’t know if I just got Bank of America on my brain or does he’s with Bank of America?

Ryan Rockwood: No, I think he might have said IndyMac.

Mike Rockwood: Okay.

Ryan Rockwood: But maybe he doesn’t say. But anyway, the point being there is income is what we’ll call this is a separate business…

Mike Rockwood: Yes.

Ryan Rockwood: …that doesn’t make any income. It’s an expense or maybe a miscellaneous income on your budget. It’s a line item of maybe negative $500 a month real estate or maybe it is positive $500 a month.

Mike Rockwood: Yes, you know Ryan, you shouldn’t assume that. Just because we’re right here in California where no landlords make any money cash flow wise.

Ryan Rockwood: Yes.

Mike Rockwood: We got to remember that there are plenty of parts of the country where they do actually make some monthly cash flow.

Ryan Rockwood: I want to move there.

Mike Rockwood: Yes. So that is the case, then you have a much smaller add to your monthly gross income. So now, the trick is going to be to present it in such a way that it is in fact the standalone business. The way I recommend you doing that, since you have purchased the kit already, is to take that. You’ll see on the black belt CD there is a business profit and loss statement already constructed for you. Work that into a year-to-date and you might as well do it for last six months or do it for 2009 on entire year a profit and loss statement for your business that shows the revenue line is obviously your gross rent and then put in half or dozen expense lines there not just your PITIA but also maintenance and also any utilities that you have to pay et cetera. Then if there is still positive cash flow, then just take that amount to your personal budget.

Ryan Rockwood: Okay. He goes on to say, “My total debt not including credit cards is 70%.”

Mike Rockwood: Okay.

Ryan Rockwood: – Of his gross income.

Mike Rockwood. Not in total [Indiscernible] [0:11:49]

Ryan Rockwood. It’s $4,300. Yes. What I’m going to say here is that I’m suspecting — he says, “Am I calculating this correctly?” It is no way for us to tell but I’m going to guess not because if your total debt is 70%, your taxes are going to chew up your 30. You have no income to buy food with. So I’m praying for your sake that that’s dramatically wrong and you’re counting expenses as debt.

Mike Rockwood: No. Well, here it is Ryan, he might be talking about his back-end DTI with his mortgage and all of his credit card debts but he doesn’t he say specifically that it doesn’t include my credit card debt?

Ryan Rockwood: It does. But I mean yes and so how could it…

Mike Rockwood: So it’s going to be higher.

Ryan Rockwood: Well, it’s going to be a first, a second, and I mean his cars.

Mike Rockwood: Student loan maybe.

Ryan Rockwood: Yes. Sure, anything. But if he gets the 70% -

Mike Rockwood: No way it will happen.

Ryan Rockwood: There’s no way that he’s going to — I mean, because we haven’t — he’s talking about gross. So remember let’s go over debts really quick. When calculating debts, debts are anything that you already pay for and you owe money on. It’s not something that is a regular expense such as electricity or even food or something like that. Those are called expense items and they’re not calculated as debt. Now, you don’t need to worry about it too much except that you have to make sure that the end of the month everything is zero. Okay, like just budgeting — basic budgeting. Okay. So when you’re saying this, I’m thinking that you’re probably doing all of your debts. It looks like he’s not including credit cards because he’s not paying credit cards. So the next answer that we’ll jump into is that will affect your loan mod by reducing your DTI potentially if it’s gone on long enough. Have you were two months behind -

Mike Rockwood: Yes.

Ryan Rockwood: – or something like that.

Mike Rockwood: That would be right.

Ryan Rockwood: It’s not going to fly. It’s just going to be on your thing as your DTI. It doesn’t matter unless your DTI is 100% or something and you need to reduce it. But based on what we’re talking about, you never going to reduce that DTI, the entire DTI too low. Anyway, you’ve got a lot of debt.

Mike Rockwood: Okay. You know Ryan, for the sake of everybody else, let’s just a quick review of the ratios that you need under budget.

Ryan Rockwood: Okay.

Mike Rockwood: Now everybody, let’s just be clear. This is really very, very clear. You need to have higher than a 31% front-end debt-to-income ratio to qualify for any modification program or whatsoever, not just the Making Homes Affordable Loan. That has kind of become the model for all modification programs. So you’re stuck with that. If your first mortgage — the first mortgage on your primary residence with principal interest, tax and insurance and homeowners association, five things, all five things added together. If that’s less than 31% of your household gross income, you’re not going to qualify. If it is higher than 31%, then you’re still in the running for the president’s Making Homes Affordable Loan Modification or HAMP program. Now, when you add in all your other debts, your second mortgage, your student loans, your car loans, your credit cards, your installment, your gas card, your Macy’s, your Nordstrom’s, add in all those credit cards, your monthly debt. If that amount divided by your total gross household income is more than 70%, then you’re in trouble on the other end of the spectrum. The lender and the government agreed that you probably have too much debt and you’re going to just tip over because they realize you need that additional 30%, like Ryan says, give some to the government and to buy some food. So those are the basic ratios and then the third factor that you have to know about is your cash flow. You really need to submit budgets that are near break even, really close to break even these days. It’s just how things are.

Ryan Rockwood: Okay. So how will they — will they calculate 70% of rent income or use the gross rental income number and…

Mike Rockwood: Well, you know some people say that it’s real crystal clear but I don’t think it is. Here are the two methods that have been used for rental income. First one is take 75% of the gross rental income and add it to your income, 75%. Then, take all the PITIA of all the mortgages and add that to your expenses. So what that does is assume that you’re going to lose 25% of your rentals in vacancies, maintenance, and management fees. It’s really a pretty good assumption and it worked fine but recently because a lot of complaining about how it was disqualifying some people, they went to another method that is just taking the gross rent minus the PITIA and add, and then take that amount over to your budget. Now, if you think about it that’s better or it should be better for the homeowner because it accepts more income. But then again some of us are trying to reduce our income. So the truth is I’ve been successfully using either method depending on which one we need to use. The third method we talked about just a minute ago and that is spitting off your real estate, especially easy if you have more than two or three properties, into a separate business and then showing a PNL for it and convincing the lender that in fact that’s a separate business, this is a PNL, and we’ll just bring the owners draw over so it impacts your personal budget even less.

Ryan Rockwood: Okay. Now, it goes on to ask we’ve been doing short term room rentals in our home. How do they consider this and do we need to show the leases? The answer to that will depend on how your budget looks. I mean, yes they’ll consider if…

Mike Rockwood: If you wanted to.

Ryan Rockwood: Yes. The question is do you want them to? You got to do your budget and if you can’t and if you need that income, count that income to hit the numbers that you need to get.

Mike Rockwood: Exactly.

Ryan Rockwood: You may have to show a lease. You may — which could be just a little note that you write in a piece of paper which reminds me, do we ever put together that…

Mike Rockwood: Yes.

Ryan Rockwood: Trying someone [Inaudible] [0:18:43].

Mike Rockwood: Contribution, yes.

Ryan Rockwood: Okay. It may be as simple as a little letter that you write up. It could be a formal lease. It could be cancelled checks, could be bank statements showing the canceled check, and it could be all three of them. Okay.

Mike Rockwood: Yes.

Ryan Rockwood: Finally, my wife has some family money, a separate account only about $5,000. What are the chances they could find out about that money? The chances are — I’m not sure. I wouldn’t worry about it too much if it i $5,000 except that I would make sure that it can’t be used as some sort of offset against any of the credit cards that you’re not paying or any of the home equity loan you’re not paying.

Mike Rockwood: Explain the offset, Ryan.

Ryan Rockwood: Well, you know I don’t really know the definition. You could probably give the definition.

Mike Rockwood: Well, the offset is the opportunity. It’s in the fine print of many of your savings and checking accounts. It gives the lender the opportunity to in fact take money that you have deposited in one account if you stiff them on another. So in other words if you fail to make a payment they can, they have the right to actually go and take the money out of your savings account. There can be no arguing about whether or not they have the legal right to do this because they do it frequently and it actually is written in the guidelines of the savings contract. Because actually, technically, legally when you give your money to the bank for a checking account or for a savings account, you actually have given them the funds and they actually are — they’re not holding the funds for you. Technically, legally you have given them the money and they now owe you the money. So it is in fact it’s very rational and it’s very logical and it’s also very legal for them to take money. So if you’ve got this $5,000 in one of the banks that you’re negotiating with for a loan mod or for a settlement on a credit card, get it out of there.

Now, do keep in mind though, Michael, that you’re talking about a loan modification. You’re not going to get the kind of underwriting scrutiny that’s going to go around and look at all your assets because in a loan modification they’re looking at altering your modification. They’re not looking at settling with you. So not the same thing as if you’re asking for deed in lieu or if you’re asking for a short sale or you’re asking for a settlement on your second mortgage or on your HELOC or on your home equity or on your credit card or something like that.

Ryan Rockwood: Okay, Anthony follows up with another question. Is there a minimum amount of money in the HAMP program? I’m unemployed. I’ve received $1,900 for the next two months. My wife works for the school district, earns $3,400 a month. The house is $3600 a month without taxes and insurance. Of course, there’s a minimum amount of money on the HAMP program. I’m assuming you’re saying to qualify and in fact that’s the primary problem — that’s the primary reason people don’t qualify is they don’t have enough money to qualify for loan modification. It’s probably the opposite of what you might think coming at the problem logically. So in order to qualify, you are going to have to get your budget including everything to be at about zero. Okay. So if you can’t do that, if you can’t get close to that, you’re absolutely tossed.

Mike Rockwood: He stills within — Anthony, you’re still within a possible, maybe, because if you’ve got 2,000 a month and she’s got 3,400 a month that’s 5,300 bucks a month or 5,400. If your payment is 3,600 and let’s say just guess your taxes are 500 a month and insurance is 50, you still might be in there.

Ryan Rockwood: Well, I’m going to say no because…

Mike Rockwood: It’s getting pretty high.

Ryan Rockwood: We’re talking about gross income here. Yes.

Mike Rockwood: You got credit card debt and you got car loan and stuff like that.

Ryan Rockwood: But talking about this thing being…

Mike Rockwood: Yes. So Anthony your question — you’re asking exactly the right question but no, there’s not a minimum but there — here’s what you can do.

Ryan Rockwood: Buy your [Indiscernible] [0:22:48].

Mike Rockwood: No, but here’s what you can do. You can take your payment. Add your taxes, your insurance, homeowners association if you have it, and divide it by 31%. Then you’ll know what the gross household income is that you need in order for that to work out for you.

Ryan Rockwood: Why don’t we do that mark?

Mike Rockwood: Yes. So I mean that’s the…

Ryan Rockwood: I’m also going to say here that — I mean this is clearly one where it’s very close and so whether you get the — I mean, if you have a kit. Maybe you don’t have the kit because you’re asking these questions.

Mike Rockwood: You know, I’m going to say and I can say it over, you know it was a mistake. So Anthony, take it and divide it by 70. If you take it, divide it by 0.7 that would be your max. So take your principal interest, tax, and insurance. Take that payment and divide it by 0.7. That will give you a figure that would make that payment 70% of your household income. I’ll just bet you you’re not that far away. Now, of course if you have car loans and credit card and stuff like that, it’s going to make it even more complicated. So you’d like to add that to the number that you divide by 70. But 70, above 70 in the debt-to-income ratio is really kind of a killer. So let me say it again slowly because I’ve totally confused myself. Take all of your debts, your home, your credit cards, your car loans and everything. Add them all up and get that figure. Let’s say it is $5,500 and divide that 0.7 and that’s the minimum amount that you’re going to need as household income in order to qualify for modification program. Otherwise, your debt-to-income ratio, your back-end will be too high.

All right, Pat says in the Making Homes Affordable. Okay, this is related to what we said, “Is the 31% debt-to-income target for all monthly debt payments or just on the mortgages?” Pat, be real clear on it. In the Making Homes Affordable, the 31% DTI target is for your first mortgage only: Principal interest, tax and insurance, and homeowners association. Okay.

Cameron says my wife contacted, tapped at our lender directly but cannot make any sense out of what she learned. I’m not surprised at that. Now, I will call them back. What do I need to know before I call? Okay Cameron, real specifically here’s what you need to do. I recommend that you — in the kit, I recommend four things that you do. One is that you listen to that CD, that free CD that’s on the site, because you’ll kind of get an idea for the kinds of settlements that are likely and it’s free so do that. Second thing; take any money out of the bank that you’re going to negotiate with if you have large amounts of money on deposit there. Don’t close the account but take most of the money out and put it in a different bank. The third thing to do is get your — review your hardships so that you know that the hardship that you’re facing is one of those that will be accepted by the government and by the bank. Those are really easy to identify. The next thing is to fully understand your budget. You have to understand the ratios, the front-end and back-end DTI and the cash flow ratios. Once you have all that down and you’re sure that you have a budget that qualifies and you’re sure that you have a hardship that qualifies, and you have got money and deposited in that bank, then you can feel free to contact. So you have a little bit of work to do to prepare but honestly it’s so worth it. Now, what I’ve begun doing before I contact the lenders as well as to do a quick Do-It-Yourself Forensic Loan Audit and I’ll have more information for you on that in the future but because I always like to be aware before I contact the lender if in fact I feel there was some real serious violations or even fraud that took place in the making of this loan because it gives me a lot more leverage in terms of convincing that lender just to move right to the settlement. You know, cut the crap and settle with me by giving me the modification.

Ryan Rockwood: Well, I got a little thing I want to say. On the previous conversation, the guy had — he mentioned that he had unemployment for two months and I do want to mention that that’s not going to fly two months of unemployment. Unemployment will fly but it has to be kind of in the foreseeable future and he say he’s really…

Mike Rockwood: You mean, he’s only got two months left?

Ryan Rockwood: So these days, you can really renew that unemployment for a long time. So I mean, you may have been on it for two years already or whatever and maybe up but consider that.

Mike Rockwood: All right. Minnie asks, “If I know that my loan broker erroneously inflated my income on my application, can I just explain that to the lender or do I need to get one of those forensic loan audits and hire an attorney?” Minnie, what I have been doing when I do identify clear violations of any of the consumer protection laws or when I identify clear instances of fraud or discrimination or any pretty serious violations, I always begin the loan modification process with a letter to the lender to their legal department Loss Mitigation Department and Customer Service Department that goes along with the loan mod application. It does just as you suggested. It states the obvious. I don’t try to be a lawyer. I just said here are the facts and the approach I take is I say please inform me if you can take action on this information or if I need to hire an attorney to represent me to take action against you. I had really good luck with them coming back and being very proactive actually in handling claims like that and they’ll have one of their attorneys contact me and just talk about — what he’s really doing is trying to pick my brain for what I really know, what will I divulge about the situation but I think that’s the best first approach because you don’t know that you’re going to submit all this and it’s just a loan modification you want. If on the other hand you don’t, then you can take it to the next level and take it to an attorney know after six weeks or so if you have not gotten a loan modification that you wanted.

All right Jason says, “I have a rental unit that I am selling short. I lost over a $100,000 on that deal and the 420 gazillion-dollar-bank lost about $50,000 and they’re making me feel like such a bum.” Tell me about it. “Anyway, it will be off my books in about 45 days. In the meantime, I am ready to apply for a loan modification on my own home but the rentals skews my ratios. Can I just omit it since they might not even approve my modification until after the home is gone?” Jason, we have had great success doing exactly that. So I would say yes, go right ahead and do it. Omit it, but don’t be surprised if your loan modification application gets to underwriter and you get a question about it. So if by the time, because think about it, if it closes in 45 days it’s going to be 45 more days before it’s off your credit report. So you’re definitely going to be through this loan modification so what I would do is I name it on my schedule of real estate owned. I name the property and I just put in Escrow, short sale, stop payment and tell them what date you stopped the payment. Strange as it sounds, they just accept that.

All right, Allen says, “I believe that my appraisal was inflated to get me into this.” This one will take awhile. You go to that one. How much time we have left? Oh, we have plenty of time. “I believe my appraisal was inflated to get me into this loan. Now, the home is worth about half of what I owe on it. I’m in Southern California. How much should I go — how should I go about investigating it?” I love this question because this was one of the easiest ways for lenders to be able to lend you more money on a home than you really had a right to, and back then nobody thought it was so unethical to do because things for so many years had inflated so steadily that it seemed like, well so what if we’re using a value that won’t really be a reality until next year. It certainly will be reality next year, right, wrong. It turned out not to be and a lot of people got caught there.

So now, as they look back on it, they’re saying wait a minute. How in the world do they ever think this home was worth $800,000? It never — the neighborhood never got to that level. Well, there are some really easy ways for you to go back and so this is a really clear violation. It’s actually a fraud violation and it’s one of those very serious ones that a forensic loan audit can identify. You can do it yourself with a few easy steps. What I don’t recommend — what I do when I’m trying to validate an appraisal is I get a local realtor to do what’s called the broker price opinion and I tell them the date that it closed and they research other comparables just like the appraiser would have. But a local realtor looking back with 20-20 hindsight, you give him really clear directions that you want all the properties to be less than or to be the very closest they can be within a two-month of closing of the same time you close and that you want the comparables to be very, very comparable in the realtor’s opinion.

Now, the realtor knows that there are — that every multiple listing service divides areas up into homes that are comparable and value for very specific reasons. You don’t have one region that has great views in the same MLS area as a neighborhood with no views. So they’re really grouped together by where they are in the hillside, where they are versus the freeway. They’re historically comparable values in these areas. So the local realtor can help you think that through.

Then you get a local realtor to examine the appraisal and examine whether or not the comparables are really good comparables. Because in fact some homes they can check the tax records real quickly just to see if a two-bedroom almost recorded as a three, a three or as a four or that square footage was misrepresented in any way.

Ryan Rockwood: One guy writes in the chat. He says that there’s a 60- — there’s a 500-square-foot difference between the appraisal and the reality of the property.

Mike Rockwood: Oh.

Ryan Rockwood: Yes.

Mike Rockwood: That’s a very serious [Indiscernible] [0:34:13].

Ryan Rockwood: It’s dramatic.

Mike Rockwood: Yes. That’s pretty dramatic especially when you think about some of the homes I know, some of the homes here in our neighborhood are only 1,500 square feet so that’s a pretty big mistake. Okay, so the other — the third — the last thing I always do is I check because a lot of times the appraiser makes an assumption for appraisals or appreciation, and so what I do is I always suspect that if I’ve seen more than a 10% appraisal in this neighborhood that I’m looking at over a one year period, then I have a problem. So I always ask the local realtor and help me now get online and look back one year prior and tell him and do some comparables for me. If I have more than a 10% appreciation then I think that signals also that your appraisal may have been inflated, all right. So there you go. That’s just one little tidbit from the upcoming Do-It-Yourself Forensic Loan Audit Manual that I’m about to produce.

Ryan Rockwood: All right. Well, congratulations guys, another class well done.

Mike Rockwood: All right.

Ryan Rockwood: I wanted to ask and see if anyone on the phone here had a question.

Mike Rockwood: Good. We’re always giving those [Indiscernible] [0:35:29].

Ryan Rockwood: Hi guys on the phone. Does anyone have a question?

Male Speaker 3: [Inaudible] [0:35:39].

Ryan Rockwood: Yeah. I can hear you. Go ahead.

Male Speaker 3: Just wanted to find out [Inaudible] [0:35:43].

Ryan Rockwood: Try to say it succinctly again.

Male Speaker 3: The market value is 200 [Inaudible] [0:36:04].

Ryan Rockwood: If you’re on the phone call and you’re not talking to me, could you mute your phone. Sorry, let’s try one more time. I’m sure we’ll get it. So we heard that the value is 200.

Male Speaker 3: Yeah. Basically the value is 200 and that was we hope for but it’s not on the market. The trust is [Inaudible] [0:36:28].

Mike Rockwood: Shoot.

Ryan Rockwood: Yeah. Okay. So the property is sold, correct?

Mike Rockwood: No, the bank took it back.

Ryan Rockwood: The bank took it back. What’s state are you in?

Mike Rockwood: What state are you in?

Ryan Rockwood: What state are you in?

Male Speaker 3: California.

Mike Rockwood: California.

Ryan Rockwood: Oh, California. Okay. You know what? Let’s handle this one by e-mail. Is that okay? Can you just send me an e-mail because we have so much feedback? Can you — I’m at ryan@60minuteloanmodification.com.

Male Speaker 3: Yes, I got it. Thank you.

Ryan Rockwood: Okay, we’ll follow up and you could send your phone number or whatever. We’ll follow up with you.

Male Speaker 3: Thank you.

Ryan Rockwood: Okay, bye–bye. Sorry about that. We had a ton of feedback but basically a guy there is talking about the bank took the home. He wants to buy it back now but they say they need to send it to a realtor and it sounds like this guy is saying, “Well how can I avoid that?” The best thing to do is probably lie to your realtor. Stopping the REO [Indiscernible] [0:37:52.], which is the mechanism as sloppy as it is.

Mike Rockwood: I can do it.

Ryan Rockwood: It’s well entrenched. I don’t — there are too many interests there to get in it.

Mike Rockwood: Part of the problem is that, especially it was one of the bigger banks, the decisions are made back in New York or in Dallas or something like that. So it’s pretty hard unless it’s a local or a regional bank, you may be able to pull it off but I’ve never been successful or heard of anybody be successful in short circuiting the REO because the REO process has all kinds of safeguards for the lender. You know what I mean? They’ve got a cleanup guy, they’ve got a realtor, they’ve got a syndicator, and they’ve got an inspector and an appraiser, and Escrow person, and everybody handles the transaction in such a way that they have a lot of insurance policies and deep pockets people to sue if they have to. So there are a lot of safeguards there in transferring the property from now they have taken ownership now to transfer to somebody else. So to short circuit that, I just don’t think you’ll have luck doing it.

All right, I’ve got one more question here. “Can Escrow or title give us copies of the documents? I don’t keep very good records and I need to do a forensic loan audit.” I say my answer is yes. Start with realtor. Very often realtors keep records of the entire transactions. Sometimes like we always have a month on DVD or on CD. So very likely he can even just e-mail it to you or mail you one of the CDs. He’ll likely have records of all the docs. If not — if he doesn’t think all the title company or Escrow to handle the closing transaction, and they’re usually right in your neighborhood anyway so you can drive down there and pick him up, that’s a lot easier than trying to work through the bank. Usually I find it at least a couple of weeks if you have to work through the bank. But surprisingly, the banks are actually pretty responsive, and we have a letter that we use routinely because when we begin loan modification now for clients, we routinely ask for all the closing documents for a couple of reasons. I’m always surprised when two weeks later I received a stock of information from the lenders. So they’re more efficient in that area than I ever would have thought they were.

All right everybody, well this has been the 60–Minute Loan Modification Weekly Teleconference. We thank you for your questions. We thank you for your support and we really want to encourage you to push, push, push to get that loan modification submitted and to push, push, push to get a good settlement because it can really change your financial life and number two, it’s only one of many things that we all need to be doing to get our financial house in order. Another one is to deal with our credit card debt and we really encourage you to join us in the Credit Card Cure. Ryan tells me that right below me on the screen, there’s a place for you to sign up for the Credit Card Cure Co-Op and it’s a group of people that are banding together and sharing a lot of information. Ryan is brokering a lot of information from a lot of sources and helping people work through settlements and their credit card debt because we’re headed for tough economic times and we need to get our mortgage and our home settled when you get a credit card debt, when you get all of this debt, just off our back so that we can get back to living debt free, paying our way as we go in this financial monkey off our backs, our individual backs as well as the back of our government has to deal with it as well but that’s their problem, right. You have enough to do just taking care of your house. So get your house in order. Get your financial house in order and the next few years will not be nearly as stressful as they will be for those hopes that are in complete debt disarray. All right, thanks everybody. Good night. Talk to you next week.