Ryan Rockwood: Welcome, welcome everyone. Thanks for bearing with us. Hopefully, you’re joining us right now online at the 60minuteloanmodification.com website or you’re joining us by phone. Thank you so much, either way, for being here with us. This is, of course, the Foreclosure Doctor Teleconference. We’re here to sure sick homes one mortgage at a time. My name is Ryan Rockwood and I’m here, of course, as I am twice a week with my dad and business partner Mike Rockwood, author of the 60-Minute Loan Modification.
Mike Rockwood: Hi, everybody.
Ryan Rockwood: And we gather each Tuesday evening to report on tips and tricks that homeowners are using to get good resolutions on their foreclosure workouts. We’re unabashedly pro-homeowner and that means anti-bank most of the time.
Mike Rockwood: So, if you work for a bank and you’re tuned in, you’re likely to be offended.
Ryan Rockwood: So, what we report may offend you if you’re a bank employee. You know, the thing is though, take consolation in the fact that you are a salaried employee and if that’s you [phonetic].
Mike Rockwood: It’s not your bank.
Ryan Rockwood: Yes. Send your questions about foreclosure every week to questions@60minuteloanmodification.com. We work full time in real estate both my dad and myself. That’s our background. We do – in addition to loan modifications, we sell homes. We do regular short sales. Well, I guess no short sale is really regular, but we also, I mean, we do regular sales. But increasingly, we help distressed homeowners more and more.
And what we do is we meet with them and we try not to pitch one solution. We have kind of a grab bag of solutions that you need to kind of customize to whatever your taste is for risk, for confrontation, for budget, and for progression down the …
Mike Rockwood: Yes, down the path [phonetic]. And that’s a good point that I wanted to make, Ryan. One of the stories that I wanted to tell people today was that things often change during the foreclosure workout process. In fact, just this morning we changed course with the client that we’ve been working with for five months on a very aggressive effort to get them a modification to hang on to a home that they have owned since it was built 32 years ago. They have good income but they have gotten themselves into some terrible debt. And so we worked very, very aggressively with them to get a loan modification. And as things progress, in fact, they worked on getting credit card debt relief as well. And low and behold, the credit card debt relief came in before their loan modification did.
So, it drastically, it dramatically reduced their monthly outlay to the point where they are simply not going to qualify for the loan modification. So, it’s changing their foreclosure workout strategy to now be a short sale strategy instead of a loan modification strategy because, you know, they had all those problems, but the settlement of those credit card debts which saved them about $70,000 changed them from a loan mod to a short sale client. So, you have to be light on your fee.
Ryan Rockwood: You know, probably if there’s one lesson that we’d like to impart to everyone along this path is that you have to be light on your feet. You have to be nibble, you have to be willing to change directions, you have to be mentally tough.
Mike Rockwood: Yes. You want that light?
Ryan Rockwood: I’ll get in a second. Let me get in a sec.
Mike Rockwood: Okay, all right.
Ryan Rockwood: Keep that in mind. If that’s not you, it’s fine. Admit it to yourself, admit it to us. We’ll help you go – we’ll help you jump to the end. We have a higher level of risk than tolerance for risk than most people have and probably more than we should. And so we can help – well say, hey, okay you don’t want to fight the fight and lose. It’s going to break you. It’s going to devastate you. If that’s you, let’s just move over to short sale, unload this thing and …
Mike Rockwood: Yes, and get out from under.
Ryan Rockwood: Yes, start …
Mike Rockwood: Get free.
Ryan Rockwood: Yes. Collecting yourself or whatever. Okay, so anyway before we get started, a couple of announcements. The homeowner mortgage restructuring product, that product is now available. We’re looking for applicants. Here’s how it works. You know, the key thing to remember here is that, you know, most people identify their biggest problem as being their monthly payments are too high. And that’s one issue.
A second issue though and probably just as prevalent is that their home value is upside down underwater. That’s probably as serious really in the long run than their monthly mortgage payments except we feel the mortgage, the monthly thing. So, we will address that first.
Okay, so here’s how it works. There is a – we’ve got a wonderful program out and it does some amazing things. We will have a book ready and a video and some education material but the bottom line is that in order to qualify, we have to determine that your first mortgage, now I should have practiced saying this but you have to not be underwater a little bit or so and so. It has to be seriously underwater in order for these investors to waste their time going and negotiating with your …
Mike Rockwood: Spend their time.
Ryan Rockwood: Spend their time with your bank negotiating to decrease your mortgage. So, in order to qualify, we have to determine if the mortgage – if your first mortgage on the home, that is the senior mortgage, is at least 120% of today’s fair market value. So, you need to not only be underwater 120% but underwater 120% on the first. Okay, and that’s about it. If you think you qualify let’s get you into …
Mike Rockwood: Yes, and then the other things that you should make sure you point out to people though is that you have to have documentable income to qualify for a mortgage at the current market value of your home. So, you do have to have documentable income and thirdly, after being default.
So, if that sounds like you, you’re late on your mortgage, you’ve got income and you’re upside down on your home significantly, then this could be a great, elegant, low-cost solution for you for, you know, 30 years. This could be the big principal reduction you’ve been looking for.
Ryan Rockwood: Okay, so that is what it is. It’s an alternative product to the loan modification. But if going into the modification, you identify that you meet this certain criteria maybe worth looking at even before loan modification or concurrently. Legal loan mods continue to increase in frequency. Forensic loan audits can be a great way to move your loan mod to the front of the line. Take note, we’re always looking for ways to basically give you a little push up to the front of the line.
Mike Rockwood: A little edge.
Ryan Rockwood: Go to 60minuteloanmodification.com for more info on getting a forensic loan audit. The Credit Card Cure book is at the printer being totally revamped. If you got the Credit Card Cure book with your kit, which everyone does, except for recently we’ve been out. There’s about another 120 pages added to it, a new website that goes with it. Very exciting stuff. It’s basically do-it-yourself credit card debt settlement.
Mike Rockwood: Debt settlement. So, if you are, you know, overwhelmed with credit card debt and you really don’t see a good solution and you’re considering bankruptcy, you really ought to seriously consider credit card debt settlement do-it-yourself program. And we really encourage you to get more information from us at creditcardcure.com.
Ryan Rockwood: Also, big changes in the program. Starting as soon as I can update the website, we’re going to actually be upgrading everyone’s product substantially. And we’re not really going – it’s going to be kind of a soft announcement and as people hear about it, they can take advantage of it. But here’s how it’s going to work.
In the past we’ve offered e-mail support and we’ve offered a one-on-one call included in your kit. Now, these are incredibly valuable worth, you know, $500 to $1,000 and it’s included as a free bonus in your kit. That’s actually going to increase in value because what we’re going to do is, I mean, obviously you know a limited conversation can be had via e-mail. And also in 20 minutes, a lot of people they’re not even prepared. So, what we’re going to do is we included in the cost of the kit is we are going to actually do a one-on-one loan modification consult with you.
So, we’re going to get on the phone with you for one hour max and we’re going to do it. We’re going to make this option available to everyone that has the product and it’s going to be very, very exciting. We’re actually going to kind of do it in a live situation like this. Well, not live. We’re going to tape it like this and you’re going to call in and we’re going to go through the hold on thing for you. And so the goal is to every week have a new done loan modification. Some will fail. Some will succeed. That’s the way it goes, right?
Mike Rockwood: But see, it’s a new way for us to leverage our time to give you more exposure to more and different situations. And also for you to be able to see a loan modification actually constructed live before your eyes in 60 minutes. Because we want to keep, of course, within the laws but we also want to keep delivering cutting-edge information and ways to get information to people that help them to get up to the front of the line in this whole loan mod frenzy. So, we think this is a really innovative way for all of you to be able to see how we walk, you know, one of your comrades through constructing their loan modification in one hour. So, you’ll hear the actual questions, you’ll see the response into the extent we can. We’ll cut in some of the forms that we’re using and the ways that we’re building the budget and the hardship letter, et cetera.
Ryan Rockwood: And what we’ll do is we’ll just record it like this except, you know, that we have speaker phone right here. And we’ll cut all your personal information out. So, that will be up to each individual as to whether or not they want to avail of themselves of that.
Mike Rockwood: Right.
Ryan Rockwood: But they would be crazy not to. And right now, that’s included in the price when we fully institute that and roll it out on the website and everything. I probably think we can at least double the price of the kit. So, look for that in the future but if you haven’t purchased, be sure to purchase right away and you can make a note of that and we’ll honor the current price.
Then schedule a time to talk with Mike and myself on the phone. That’s an important part of the kit that’s currently available. It’s a 20-minute phone call and you should take advantage of it. It’s at 60minuteloanmodification.com/schedule.
Mike Rockwood: And what a lot of people really appreciate is being able just to schedule a time with us. Pay time to talk about their foreclosure situation. If you’re unsure as what path to take or you need more help to talk about how to resolve, you know, income issues, how to work through, you know, or think through different workout alternatives, you can go to that same spot on our website 60minuteloanmodification.com/schedule and just schedule additional time with me. It’s inexpensive. It’s like $47 for 20 minutes.
Ryan Rockwood: Well, that’s actually included as part of the kit.
Mike Rockwood: No, but I’m just talking about additional time to talk about your workout solutions of any ilk. You know what I mean? So, when you need to schedule additional time and you go to that same place and it’s inexpensive. It’s of great value and a lot of people like to take advantage of that.
Ryan Rockwood: Yes, let’s not quote a price on that because it’s going to double. But it’s extremely, extremely inexpensive. So, take advantage of that. Also, our Thursday night calls are like this. They’re client only calls. We’ll actually do a …
Mike Rockwood: Actually, that’s just a repeat of your announcement.
Ryan Rockwood: Okay. So, I just want to let everyone know that there is a Thursday night call. It’s like this. It’s for clients only.
Mike Rockwood: All right. Hey, now. I wanted to also pass on, before we get start, at another story. There was that one about the folks who had changed from a loan mod application to a short sale application and the reason was they lost or shed about $150,000 worth of credit card debt during the loan mod process, just working this debt settlement process and do-it-yourself debt settlement process.
Then I also want to pass on that story about a gal I worked with this morning who, working with another loan modification company was all set to submit her documents and this was to a division of Bank of America. And she was all ready to submit it with $1,300 of excess income every month. So, at the end of her budget, she showed that she still had $1,300 additional income. And I just told her flat out, this will not only be rejected but it won’t even get – they won’t even enter the data because even the data entry person knows that this can’t work. So, I worked with her at length and that is – it was very timely for me to have to go through with her all the explanation because that’s what we want to talk about tonight.
Every night, before we start answering questions, we will get to 15 questions or so tonight. I’m sorry that we’re taking so long for our introduction. But we always like to talk about a particular topic and train on a particular topic having to do with foreclosure. So, we may talk about a short sale or we may talk about a deed-in-lieu. We may talk about the benefits and the pitfalls of just walking away.
Tonight we’re going to talk about loan modification by the numbers. The important numbers that you need to know are really the critical elements in a loan modification because without the right numbers you’re doomed to failure. There are the gatekeepers of the whole loan modification process before they even pass it along to a negotiator are your – all those gatekeepers. And the one with the most power is that one that scrubs your budget.
And so what I want to do today is just go over real quickly the numbers that you need to have correct in order to get your loan modification approved. It’s extremely easy to know what they are. It’s extremely important that you hit all these numbers. So, let’s go through real carefully.
The first one is your income. And as you know I have a whole teaching session on income, how to get your income up, how to cut your income down. How to submit your income? How to document your income? Income itself is, of course, absolutely imperative. It’s one of the elements in the debt-to-income ratio and it’s absolutely important that you get it right. You wouldn’t believe how many people make mistakes on calculating their own income. They’re not sure how many paychecks they get in a year or they’re not sure why one paycheck to the other varies. Well, you have to get all that stuff straight so that the bank doesn’t have to get it straight.
So, remember, your income is one important element. And like I said I have a whole class on just getting that right. But the numbers that I want to talk to you about tonight are your debt-to-income ratio and your cash flow or your cost of living. There are two debt-to-income ratios. Now, keep in mind ratio is nothing more complicated. And a lot of times people aren’t familiar with the term. It really means a percentage. And when they say debt-to-income ratio they just mean what is the percentage of your gross household income that you spend on debt. So, it’s debt to income.
And with regards to most foreclosure options, they really want you to explain two debt-to-income ratios. One is called the front-end and one is called the back-end. Now, the back-end ratio is all of your debt payments divided by your household income, your gross household income.
Let me say that slowly. If you add up your school loan monthly payment, the minimum payments, and all your credit cards, your car loan payment, any other payment that’s on your credit report, your second mortgage or first mortgage fully loaded with principal, interest, tax, and insurance, add all that up and divide it by your household income, that number is called your back-end debt-to-income ratio.
So, it’s a percent of all those debt payments and it’s a percent of your gross household income. That’s your back-end DTI. And if your back-end DTI is higher than 70%, number one, you have debt problems. Heck, if it’s higher than 60% you have debt problems. You’ll probably have a hard time figuring out how to make your payments every month and you’re probably going to get declined for a loan modification if you’re higher than 70%. So, you need to work the numbers until you fall into the guides. Your back-end debt-to-income ratio needs to be under 70% or you’re going to have to do some really fancy footwork to get approved.
Now the other debt-to-income ratio that you need to be concerned about is the one that we all hear about. That’s the front-end debt-to-income ratio. And that’s simply a subset of the back-end. Here’s how it works. You take your first mortgage payment on the home that you live in. Make sure you have principal, interest, tax, insurance, and homeowners’ association dues in there. So, it’s a fully-loaded payment. It is the housing payment that you need to make. You don’t have your second mortgage in there though. All right, and then take that number and divide it by your gross household income. Now that number needs to be at least 31% or else you don’t need help.
In other words, the Making Homes Affordable guidelines of 31% has become an industry standard. So, actually, a lot of the lenders advise you not to have more than 29% or 30% of your – for front-end debt-to-income. They feel like that’s starting to apply too much pressure to the homeowner. But the Making Homes Affordable Program was pegged at 31%, so all loan modification programs are 31%.
Now if that number is more than say, 45%, you also have problems. Well, particularly if you’re going to add a car loan on there and a student loan and some credit cards, you’re going to have a hard time keeping under 70% for your back-end. So, those are the two debt-to-income ratios and you can’t really violate those numbers. If your debt-to-income ratio is lower than 31%, you are not going to get approved. And don’t even bother sending in the application, I’m not kidding. See, here’s what will happen. They’ll just reject it upfront or even worse they’ll take your application and fool you for months that they’re thinking about it and then you’ll get a rejection later. So, it just can’t work without having those numbers right.
And then a lot of people are really surprised about this third number, your costs of living. Let’s run through it real quickly. I’ll try to get a white board or a screen shot for you in the future on this topic because it’s really important. From your gross household income, you’re going to take away your income taxes. That will give you your net income. And remember your income taxes have to be calculated based on what you actually pay, not on what you have withheld. So, don’t confuse the two.
So, from your gross income, you take away your taxes. That is your net income. From your net income, you take away all your debts, and then you have some amount of money left, right? It’s probably 25% or so of your gross household income, 25% to 40%. You have to show the bank how you spend all of that. The bank expects that you spend all of it. They want to know how you spend it, so you have to show them. Show them, you know, you have to list for them your utilities, your medical expenses, your insurance cost, your car insurance, your gas, your life insurance, your church contributions, your miscellaneous, your food, your entertainment, your dry cleaning, your clothing, all of the items that we all consider costs of living. And here is a tip that you have to follow. You have to spend all your income.
Probably, if you’re listening to this and you’re applying for loan modification, that isn’t the problem but you have to show them that in fact you have enough money to make ends meet but you don’t have too much money than you have excess money, okay, that’s the guide, that’s the tip. Abide by it. Don’t send it a loan mod application with a big negative thinking that it shows that I need help. Good logic but it’s not loan mod logic. Loan mod logic takes some extra twist.
All right, so those are the numbers and loan modifications by the numbers work. If you have the numbers right, then you’re going to be successful even if you have goofed up on every other thing. All right, let’s go to some questions. And remember you can send questions during the call to questions@60minuteloanmodification.com. I see Ryan’s got some more coming in that he’s printing off now.
The first one is from Vie [phonetic]. “We followed the 60-Minute Formula and submitted our loan mod application but we were at a 30% front-end DTI.” So, everybody is following that. They submitted their application, they followed my formula, but Vie [phonetic] you didn’t exactly because you wouldn’t have submitted it with a 30% front-end DTI. But Wachovia told her that they would still consider it for a mod and that she should call back every two weeks. And she says, “Do you think they will allow us a modification without having a 31% DTI?”
And Vie, the answer is unequivocably. Without any equivocation, no. You absolutely are going to be told no. And the only reason I can think that they even allowed you to apply is that you’re probably not in default. So, they’re glad to act like they’re going to help you if you’re not in default. As long as you stay not in default, they’ll continue to tell you and act like they are helping you but in fact they are doing nothing on your loan mod application. It is sitting dormant. And in fact the department that works it is probably called the imminent default department. And when they review your file every few weeks, they realize that they can keep you in imminent default and out of actual default by just continuing to tell you that they’re considering helping you.
So, Vie, you are being fooled. I suspect. But if you are in default, then they’re going to change their tune pretty quickly and reject your application so it won’t take them long. But Vie, the only thing you could do is torture those numbers. And by that I mean you have to really stare at them and really scrub them until they confess to what you want them to say. You want to get your income down a little bit. And the way you can do that, Vie, is by looking at who’s on the loan? Do you have to have all, I mean, you have all those household members on the loan or is there somebody who you included that isn’t on the loan and you could take their income out. Did you miscalculate your income? By that, I mean, did you miscount the number of paychecks you get in a year and then divide it by 12? Do you get, you know, biweekly or do you get semi-monthly paychecks? It’s not as easy as it seems at first to calculate it.
So, torture your income down. Torture your payment up. Look at your payment and make sure, make absolutely darn sure that you’ve got your insurance payment and that that’s accurate, you’ve got your taxes and that that’s accurate because those are changing these days that you’ve got your principal and interest and any homeowners association or private mortgage insurance. So torture that number up and your income down. But if you can’t get it to over 31%, Vie, then I’m afraid you’re out of luck with a loan modification. You have to move on to a different workout solution.
Jack says, “If my son who lives with us and has been paying rent signs a lease agreement, can we use his income on our application for a loan modification?” Absolutely Jack, are you kidding? Absolutely positive you can. And don’t even worry about postdating it or what. You can date it the same day as your application. That’s perfectly viable. That’s a way that people often do get their income up in order to qualify is they will ask adult kids who are living at home or sometimes their parents who are living with them to sign a lease agreement and to, you know, make it formal that they’re going to contribute a certain amount to the household.
Bob says, “The bank told us that my wife is considered a co-borrower and that we should add her income to our application. But when we do, our DTI is low because we have too much income. Do we have to include her income? She is not on the loan. They just said that I don’t have enough income without her so we should include it.” Okay, so everybody get the picture there. Bob, on his own, with his own income, does not have enough income to qualify for a loan mod. So, the bank told him we’ll consider her a co-borrower, include her income.
But here’s what they didn’t tell you, Bob, and that is that you can include just a little bit of her income. You can include exactly as much as you need to get your ratios exactly right. So, it’s really a great thing, you have a great opportunity. Let’s say she makes $5,000 a month but you only need $2,500 a month in order to hit your – to get your ratios exactly right. Then you get her to write on a contribution letter stating that, you know, attached is a proof of my income. I can contribute $2,500 of this to our household budget and I will do so, and then have her sign it and that’s all you need to do.
Because see, they don’t have a right to her income and she may have all kinds of financial commitments that are on her credit report, you know, credit card, car loans, et cetera, that they really have no interest in or any right to information on. So, with this trick you can use any portion of her income. You can use the exact portion of her income that you need to get your ratios right. It’s a good thing.
All right, René says, “I just got a commission check today from my first paycheck in 2010.” Wow, it’s almost the end of the first quarter, and René just got her first paycheck. René, these are tough times. You must be like a car salesman, a realtor, something like that. “This changes everything from my application. Can I present this as proof of my quarterly income?” Yes, of course you can, René. That’s how you should do it. Or she says, “How should I show it?” Well, René, I’m assuming that that is enough income for you to be able to qualify and that’s not really that uncommon for, let’s say, realtors in affluent areas now the times are slow to have only one sale in a quarter. That’s not so strange. But that one sale may have netted them, you know, $30,000 so their income is $10,000 a month, not too shabby.
So, René, you’re thinking about it exactly right and the bank isn’t going to have one bit of problem with that and that and the way that I recommend that you show that is to actually show, you know, a photo of the check. Show them how you divided it over, in big clear letters, write and show them how you arrived at a monthly figure and then sign it. And the reason I recommend that you do that is because then the underwriter can use that as legally to underwrite. In other words, you have now signed the document saying that is your monthly income. So, it kind of takes him off the hook.
And generally, in loan modifications, they’re looking for fast underwriting. And in those cases where they really want to give you the modification, number one, because they get paid by the government to do so. Number two, because it will get your payments flowing again. And number three, because it’s the right thing to do and you qualified and our government pays for it. I get off on that stuff. Anyway René, you’re thinking about it clearly.
All right, Ryan, feel free to interrupt me here if you get some questions that you really want to break in up. But I’m just going to get – I’ve got like three more of these that came before class.
Ryan Rockwood: Cathy writes in and she says, “Wait a second, did I just hear you say that you don’t want the negative amount of your monthly budget to be the amount of relief you’re asking for?”
Mike Rockwood: Yes.
Ryan Rockwood: And she makes the point that she read in the eBook, although I don’t know we have an eBook that it might say that. Either I [phonetic] had said that wrong.
Mike Rockwood: Yes, okay, so everybody so I’ll repeat that just so I’m sure you can hear it. One of the viewers wrote in and said, hey I saw on your eBook where you recommended that my shortfall be about the amount that I expect to ask for. And Cathy, I am heartily sorry for having offended thee. This was true. That was then. This is now. All this changed about the time that they put on that real push to get the trial modifications last September and we’re still not exactly certain why it is. But back about that time it changed and all of the modification applications, financial statements, needed to come up with about a big goose egg. So, that’s old information and no longer good information.
So, your loan mod application should be submitted with a budget that gets pretty close to zero. I always recommend and once that I do, I always send in with, you know, about negative $50 maybe.
Ryan Rockwood: Okay, Eugene from Hawaii asks he’s nervous. He’s not paying. He’s not used to that feeling of not paying and being behind and so on. He says they want more information. They want to send them a loan mod application. He is nervous, he doesn’t know what to do and he asks, “Should I pay some of the arrears to kind of stay in the good graces?”
Mike Rockwood: Okay, so Gene is asking should I pay arrears to stay in the good graces of my bank while they consider my loan modification. And honestly, I happen to know that Gene fully intends to keep his home no matter what. Gene is a retiree and there is no way he’s going to lose this home. So, Gene, it doesn’t really matter if you make a payment. As long as you stay in default, you are going to continue to get good treatment in terms of – and I know you wouldn’t consider what you’re getting to be good treatment. But in fact because you are in default, you are getting good treatment from the bank.
I know it doesn’t feel like it but the flip side of that is because you fully intend to keep the home, any payments you make are, you know, that much less in arrears that you owe. So, there’s no harm in making a payment if you would feel more comfortable with that. It also does not help your chances of getting a good loan modification. There are times when Bank of America and some of the other major banks convince homeowners to pay to become no more than four payments late before they will approve their loan modification. And in fact they have abided by their commitment to do that.
So, homeowners have responded in kind. Paid, like let’s say they’re six months behind, paid up a couple of payments and the bank has reciprocated and granted the loan modification. So, I don’t really think that there’s anything sinister in them trying to get you to make some payments. Honestly though, Gene, I think what you’re experiencing is the conflict between the collections department and the loss mitigation department.
Loss mitigation is simply unable to get to these loan modifications and collections, of course, is pressured to get payments flowing, get payments flowing, do whatever you can to get payments flowing. So they, very often, aren’t working in lock [phonetic] step at all. So, the collections department are harassing you at the time when the loan modification people are saying, hey we can’t even get to this person’s modification applications. So, it’s in the banks best interest to get you get some payments going. But it’s important to stay in default if you want to get a good loan modification.
Sarah says, “I may be getting laid off. Now I am really nervous about my loan mod application. Is there any way to speed up the approval before my income drops off? I really need some monthly money relief.” Sarah, I’m afraid there is no good way to speed up a loan mod application. They are slow and getting slower. The trick is, and I hope that you have followed all my advice in terms of making your application absolutely bullet proof and making it silicon and spraying it with WD-40, to keep it moving because we all know about file inertia. When a file is in motion, it tends to stay in motion going through the process. And once it stops, it tends to stay stopped. So, Sarah, the trick – the key will be as to whether or not your loan mod is bullet proof, greased up full, and made of Teflon in the first place, done right. But really, after you’ve submitted, there is nothing you can do.
The good follow up procedure is the one that I recommend. And those of you who have been following us for some time know that I recommend a real aggressive follow-up procedure.
Ryan Rockwood: Okay, Bernie asks, “We received a modification from IndyMac-Deutsche Bank last summer.” Now, that one doesn’t seem so good anymore.
Mike Rockwood: Yes.
Ryan Rockwood: They’re hoping that they can get another. “Is it likely we’ll get a second modification?”
Mike Rockwood: Yes. Yes, okay, so here’s a really good and timely question here. I got a modification from Indymac last summer. And so I’m betting that last summer your mods were probably pre-Making Homes Affordable. They probably were in the 5% range. And at that time, that seemed like a pretty good modification, down probably from 6.5% or 7%. So, you know, you shave up hundreds of dollars off your mortgage. You grab it and now you learned that Making Homes Affordable mods are even lower.
Can you apply for them? Absolutely yes, and they will process your modification just got to get in line with everybody else. So, just follow our tips. Follow the rules but absolutely positively.
Ryan Rockwood: All right, and he also – he also goes on to say he’s self-employed. He’s earned a lot in the past but not now. Hope still [phonetic] in the future. “Will that hurt my chances of getting a mod?”
Mike Rockwood: No, Bernie, your income, in terms of whether or not it will hurt or whether or not it will help, depends on those ratios. So, go back and, you know, fill in the blanks. Take out the kit. If you haven’t purchased our kit, you just have to purchase it. I mean, come on, it’s $147 for, like, tons and tons of tricks and tips to get up to the front of the line. I mean, you want the kit so buy the kit if you haven’t got it.
But you absolutely want to use all of our tips and all of our tricks so that your mod is bullet proof so that it’s made of Teflon, like I say it. Like I said and sprayed with WD-40 so it just slides through.
Ryan Rockwood: All right, and then Karen asks she’s got a friend who has a second home and it’s worth 70% of what he bought it for a couple of years ago.
Mike Rockwood: Yes, second home.
Ryan Rockwood: Yes. Do you think that the mortgage restructuring would work for him?
Mike Rockwood: Yes, the homeowner mortgage restructuring is extended to the home that you own and live in or your second home. It’s not currently extended to rental properties but a second home absolutely qualifies. So, if it has declined down now to 70% of what the previous value, depending on you financed it, you may qualify for a homeowner mortgage restructuring and that’s a beautiful product. So, send us more information about how much your first mortgage is on the property and whether or not you have solid documentable income. These are not stated loans, these restructured loans. They have to be documented so you have to have documentable income, okay.
All right, I’ve gotten through my questions, Ryan, and I think we’re kind of running out and pressing out on the clock aren’t we?
Ryan Rockwood: Yes, we’re looking good.
Mike Rockwood: All right, everybody. So, that does it for this week. We’ll be back next week with more questions on the Foreclosure Doctor Teleconference Series. We’ll talk again next week. Feel free to send us your questions at questions@60minuteloanmodification.com. Please tell other folks about our services and we look forward to talking with you next week. Thanks and goodnight.
