Ryan Rockwood: Hello, hello everyone. Welcome to the call.
Mike Rockwood: Hi, everybody.
Ryan Rockwood: Hopefully that transition worked pretty well today and everyone got dumped on to this video feed at the correct time. We started a little bit late to make sure everyone got in here. But anyway, welcome to the call tonight. Thank you so much for joining us. As you know, this is the Foreclosure Doctor Teleconference. We’re here to cure sick homes one mortgage at a time. My name is Ryan Rockwood. I’m here with my dad and business partner, Mike Rockwood. Hold on. I got it okay. Okay.
And we gather each Tuesday evening to report on the tips and tricks that home owners are using to get good resolutions to their foreclosure workout. We’re unabashedly pro-homeowner, anti-bank. So, while we report may offend you if you are a bank employee but probably not. You probably hate them as much as we all do. We work full time in real estate. We do short sales; regular sales, of course, mortgage restructuring and mortgage settlements, all manner of mortgage workouts.
But, you know, it’s funny. A couple of things I did want to mention, a few announcements before we get started. And that is we do have a product that we sell. And occasionally we get so into providing wonderful free information and going broke publicly that we forget to mention it. It’s down below. And as a special unannounced bonus, if you buy it during today’s call, you can click the button below and you’ll save $25 off the price of the kit, which is like 10% or something like that. It’s a pretty good value, more than that actually.
Mike Rockwood: Yes.
Ryan Rockwood: So jump on that. That’s a free unannounced bonus. Special tonight also, we have – my dad recently wrote an additional 40-page book, white paper, whatever you want to call it. It’s called – its’ like a working title right now, super not fancy. You get a copy free for joining us tonight on this call. It’s called What’s A Homeowner To Do? That’s such a bad title. I retitled it something like “How To Breath Underwater? Options for …” Something like breathing room options for homeowners in distress, that kind of thing.
Mike Rockwood: Life support for underwater homeowners.
Ryan Rockwood: Oh life support, that’s nice. That’s nice. Anyway, the idea being – if you’re just tuning into the call, you might be kind of surprised because one of the things we don’t do is just push loan mods as an option because it’s not the option for everyone. It’s really bad option if you try to pigeon hole everyone into it.
So anyway, we go through and a lot of times a lot of our calls and so on a lot of what we do is going through with the clients on the phone. And if you buy the kit you get some time on the phone with us. We go through and we say hey, the loan modification isn’t for you? Go another route. But we never had anyone say, “Well then I want my money back.” You know, basically we kind of feel that we owe it to you rather than driving you down a path that you’re going to kill yourself on.
Mike Rockwood: Right.
Ryan Rockwood: That it’s worth some value to get a little bit expertise, a little bit of time. Turn off that road, that’s going to be a dead end on to some path or paths that may be more appropriate for you. So, anyway, welcome to the call tonight. If you want a copy of the book, send a copy; send an e-mail to help@60minuteloanmodification.com.
Mike Rockwood: And we should say a little bit more about the book. It really outlines the eight different options that homeowners face. If you’re upside down, there are really are really only eight options. And this kind of goes through every one of the options, including some of the newer ones, the short refis, like we’re going to be talking about tonight.
Ryan Rockwood: Okay. So if you want to copy that book, help@60minuteloanmodification.com, and you know what? We had some problems with that e-mail address and I don’t know if I ever checked it out. So scratch that. Send it to ryan@60minuteloanmodification.com. Okay, we have an online chat. You can jump online and chat. We’ll try to answer it although it gets hard. Don’t get mad. Some people have gotten mad when we haven’t gotten to their chat. The other thing you can do is buy the kit below that’s on the web page. The other thing you can do is, write at the top of the page. Write above the video. There’s a schedule and appointment button. Guess what that does? It schedules an appointment with us.
And if you have purchased the kit, you get an appointment free. If you haven’t purchased the kit yet, you can pay for it. You pay for a 30-minute phone call if you want and to decide if the product is right for you. Also those new to the call might be surprised to see my son. Lucas is walking around at the background. He always joins us. He joins us everyday here in the office and he helps a lot of people out with loan mods too even though he’s just three. Okay, so …
Mike Rockwood: Come over here and say hi to everybody.
Lucas Rockwood: Will you do get me show on [phonetic]?
Ryan Rockwood: You want to say hi to everyone?
Mike Rockwood: Okay. Do you want to come to say hi to everybody?
Ryan Rockwood: Well, you know what? I’m going to get it going for you. Okay, I’m just going to sit down up here and then we’re going to …
Mike Rockwood: When we start talking and then your dad can start go to the storage.
Ryan Rockwood: I’ll be right there, okay. Okay, but anyway tonight, we have a very exciting call. Unfortunately, we feel like we have to do a little bait [phonetic] and switch on you because our lender, Kennedy Haton, called in sick of the last minute.
Mike Rockwood: Just a minute honey.
Ryan Rockwood: So, you’re not going to be able – we’re not going to be able to talk about some of the things we wanted to talk about in the e-mail. However, it’s a multipart class and so we’ll just pick it up what we can’t do today, next Tuesday. Instead, we’re going to kind of – I thought we’d just kind of move the order of things around. What we’re going to focus on today is some of the public options for reducing principal on mortgages.
Mike Rockwood: Yes, so what Ryan and I really wanted to bring to you is an overview of what’s happening in terms of principal reductions. And we really thought it was kind of a three-part deal that we should let you know what the FHA program, how that’s coming along, how the Making Homes Affordable Program is coming along. We want to be sure to keep you up to date on what’s happening at Bank of America and at Wells Fargo with their, you know, pretty sizable effort to grant some principal reductions. And then we also want to make sure that you understand what the private sector, the private lenders, the hard money people are doing. That’s one of the products that we’ve been talking with you about for the last few weeks, at least we’ve been mentioning. And those are available now nationwide from about three different sources. And those are similarly short refinances, so the opportunity to refinance your property to get your mortgage down to market values.
So, we want to keep you informed on all that so we thought it would be good to maybe have three sessions about that and Kennedy was to lead us off today, but when she called in about 20 minutes ago and said she was just dying of a headache, so she can’t be with us. But let me just bait you a little bit with the kinds of things she’s going to talk about because we were all ready for that talk. We had already gotten questions and so next Tuesday, she’s going to be with us and she’s going to tell us about primarily focused on two things. One is talk to us about traditional refinance opportunities today. What ratios are being used and what FICO scores are required? Can borrowers still take money out of their homes? What is generally the situation in terms of refis today?
And then we want to talk more importantly about the Making Homes Affordable Refinance Program. Compare it and contrast it with the FHA secure short refi program. Talk about who qualifies? How do they qualify? How does it work? How much or how little upside down is required? What happens to the negative equity? Is it just forgiven? Does the borrower get a 1099 statement to the IRS and to the borrower that they have income generated from a forgiven debt? What percent of the current market price is financed? So, if you determine the houses worth $300,000, do you finance at $300,000 like some of the private ones do? And then can borrowers be in default? And if so, what happens to the arrears? And then we asked her also to be prepared to talk to us about current rates for refinances.
So, those topics as interesting as they are will be next week. What we’re going to talk about today instead for brief time and then we’re going to take questions, and then I see we already have about 15 questions in. So, keep sending them. But here is the topic for tonight then is we want to go over our mortgage restructuring product or principal reduction product that are coming from the private sectors
So, next week, we’re going to talk about the Making Homes Affordable Refinanced Program and we’re going to give you an update on the Bank of America program. This week, we’re going to talk about how the private lending organizations around the country are gearing up to kind of move in to this big vacuum, this big need for principal reduction financing and the kinds of products that they’re offering.
The company that we’re representing or the company whose product we’ve investigated, done a lot of due diligence on and feel really comfortable offering to our clients and recommending to our clients is offered by lending institution in San Diego County, California called IFI. And what IFI does is they’re private lender, a hard money lender. And what they do is they take your application – and I’ll tell you about the qualifications in a minute – and then they pull together a bunch of applicants and they take them to the big lenders. So, a couple of weeks ago they took, well, 20 million. I think it was about 30 mortgages or 35 mortgages to Bank of America and they offered to buy those mortgages at an, of course, greatly reduced rate. And Bank of America is interested in doing that because, of course, they have their plate full with handling foreclosures and handling upside down homeowners and handling mortgage modification requests.
So, they’re doing whatever they can on any front to liquidate toxic assets as intelligently as they can. So, this is kind of an intelligent way, in this case, for Bank of America to liquidate $20 million worth of mortgages. So, what IFI does is they pull these mortgages together. And when they have a large pull, they approach the lender and ask if they would be interested in a settlement. They buy your mortgage and they buy your second mortgage. So, they buy your first and second and then they turn around and offer you a writer to your mortgages which, in fact, writes the principal down to today’s current market rate.
Ryan Rockwood: I don’t know why you talk about the writer, IFI, all these – nobody cares about all that stuff. I don’t think.
Mike Rockwood: All right. So, now that you’ve come back from starting curious George [phonetic], tell me what you think people care about.
Ryan Rockwood: I think people – I think you know – because when you get a mortgage – when you go to a mortgage broker, they don’t say now Bank of America comes in and buys out the note when you got a refinance.
Mike Rockwood: Okay, so I agree with that. I shouldn’t have got into that. Why don’t you should tell me what I should talk about? He’s smart.
Ryan Rockwood: Here’s what I think the story, the narrative is that would make sense to people. And that is…
Mike Rockwood: Okay, I know wherever you are. You’re going to this page.
Ryan Rockwood: Well.
Mike Rockwood: What are the guidelines and what is the typical time? Is that what you’re thinking?
Ryan Rockwood: Okay, yes. Well, let’s talk about – I mean, basically forget the situation. I mean, the situation is this. You owe more in your home, can you – is there a situation where someone can come in and you can owe what your home is worth.
Mike Rockwood: Right.
Ryan Rockwood: Okay, so …
Mike Rockwood: Can we fix this mess?
Ryan Rockwood: Good deal, okay. What happens is, these guys will come in and part of qualifying is that you have to be behind on your mortgage. And so what that means is they’re going to be able to negotiate a discount on your note. Could you do the same thing if you have a bunch of cash later on [indiscernible]? Sure thing, you know. If you want to, you know, pull about a hundred homes together and go buy them all and do that kind of thing, could you do it? For sure but unfortunately, we don’t have those kinds of resources. Let’s go through the guidelines. Have you already gone through it?
Mike Rockwood: No.
Ryan Rockwood: Okay
Mike Rockwood: Not at all. Okay so, like Ryan said, you have to be in default. So, you see, we got solutions or the industries coming up with solutions for little segments of the population. Loan modifications are good for hundreds or thousands of people. Short sales are good for hundreds of thousands of people. Foreclosure actually turns out to be a bit solution for hundreds of thousands of people. And this principal reduction turns out to be a good solution for hundreds of thousands of people. Let us describe for you the people that we’re talking about.
First of all you must be in default. So, you must have already decided that you want to settle with your bank. You want some kind of resolution. So, you’re in default. You must have income. You must have enough income documentable. These are not stated loans so you have to have a 1099 or a W2 or a profit and loss statement income that’s documentable and it’s sufficient to qualify for the new loan, for the new loan. It must be your – the home that you own and live in or it can be a second home. It can’t be a rental property.
And then here’s an important one. You must be pretty significantly upside down because the bank has to agree that this is a toxic asset. You must be 20% more upside down, 20% upside down on a first mortgage. So, in other words, take your first mortgage, take 20% off that. And if you think that is your home value by today’s standards, and of course, they’ll get it appraised, then you could probably qualify. So, you see it is for a small segment. But I mean a small segment of, apparently it’s – if there are over 2.5 million Californians who are more than 20% upside down on their mortgage, so right away you have 2.5 million opportunities for this product. Now, if you figure that 25% of them are owner occupied, 25% of them are fully – still have a job, a good job, and 25% of those are in default, you still have 150,000 opportunities to sell this product. So, it’s a pretty significant opportunity and there are plenty of you out there for whom this is a great, great solution.
And it’s a pretty simple solution too. The application is relatively simple. There are three forms. It takes about 20 minutes for us to apply for you online. You attach a $795 check to the application and it takes about five days to determine whether or not the bank will accept your mortgage. If they don’t, then they’ll refund your $795. If they do and you go into the pool, then it can take up to 90 days. But we’re expecting that will take about 60 days before you receive an affidavit letter explaining exactly the terms and conditions. And then if you sign it, they go ahead and do the appraisal and the escrow closes by day 90. So, it’s really a pretty fast process if you’re the right person.
So, it’s a great, great solution and we encourage anybody who thinks that they fit into those guidelines. If you think those describe your situation, please contact us at 60minuteloanmodification.com. Write to ryan@60minuteloanmodification.com and tell him you would just like to review the qualifications for the home reduction program, homeowner mortgage reduction program. You don’t want your home to be reduced. It’s the mortgage on home.
Ryan Rockwood: I supposed. Okay, so someone writes in. It says that they really do appreciate all the details.
Mike Rockwood: Thank you.
Ryan Rockwood: I was wrong.
Mike Rockwood: Probably your mom, my wife.
Ryan Rockwood: Okay, so he also follows it up, is the 20% on the first only or on the first and the second.
Mike Rockwood: Yes, that’s one.
Ryan Rockwood: And here’s something. It’s almost – I think it’s almost worth leaving out of the entire thing because it can be confusing. But it is in the first. So, forget the second for qualification reasons. You need to be – your first mortgage has to be at least 120% of the current value of the home or 20% underwater. Okay, does that make sense? And an example would be that if your home is worth $100,000 the first mortgage would have to be $120,000, okay. The second mortgage could be anything.
Mike Rockwood: So, people are pretty significantly upside down
Ryan Rockwood: Yes it is. And you know it’s not for everyone so it’s not the kind of solution you need to shoehorn yourself into.
Mike Rockwood: Right.
Ryan Rockwood: And also it’s not for someone looking to – I really don’t, I was talking to somebody today – I don’t think it’s for someone looking for the last chance to save their home. Well, maybe it is if they’re really wealthy. They have other options but they just wanted to try something else. Everything’s failed. So anyway, or not your mommy says.
Anyway, so it’s for someone who, you know, it is experimental. It might not work. You should look at it as a $800 that may never come back to you. Most of the people that are going through this sort of thing, you know …
Mike Rockwood: Pretty desperate.
Ryan Rockwood: Yes, pretty desperate also not making those mortgage payments. And if your mortgage payment isn’t at least that much, then absolutely don’t consider this. I mean, I wouldn’t think.
Mike Rockwood: For the people, when we find the right people, they just go, aha, this is perfect. It solves the problem long term. It’s a good, good solution.
Ryan Rockwood: Yes. So, we’re going to be big [phonetic] on that too. So, anyway someone else e-mails in. It says, “I requested the book a month ago and never got it.” And that is because we never send it. So, sorry about that. That’s totally our fault. You know, just priorities and other things all competing for this, right
Mike Rockwood: OK, so are we going to send these books and tomorrow or when are we going to send them?
Ryan Rockwood: Yes, but you know I do have to, you know, it’s still not perfect. So tonight, it is going to say on the top like pre-release, don’t distribute it, don’t click on any links. Everything’s going to go crazy. And links aren’t going to work. It’s for your information only. OK, so consume it, enjoy it, and then burn it and your computers. So, anyway, have we killed that topic?
Mike Rockwood: Yes. I think we’re ready for some questions, Ryan.
Ryan Rockwood: Okay.
Mike Rockwood: You want to start or do you want me to take some? And you’re kind of fading out on the edge of the screen there, looks that way.
Ryan Rockwood: It’s okay. You’re really the focus, you know. People look to you in this time of need.
Mike Rockwood: I see. And you also know there’s a spot on your lapel, do you?
Ryan Rockwood: I do?
Mike Rockwood: No there’s not. All right, you want me to go ahead?
Ryan Rockwood: Sure, go ahead.
Mike Rockwood: Michelle writes, “Can we put this home up for short sale before notifying the bank? We’d like them to offer us a loan modification but it does not look good.” Michelle, that’s exactly what I recommend that you do. It’s none of their business if you’ve got it up for sale. It’s only their business if you request to transfer the title. So, put it up for short sale. That’s the way to do it. Many of the lenders following Bank of America’s lead have stopped allowing you to try two different workout solutions at the same time. Shame on Bank of America.
But at any rate, that’s what you should do, Michelle. Definitely, get that offer and you have it in your hip pocket. And if that loan modification does – I mean, you know what, you’re going to find out where the loan modification in the next few weeks. Sometimes it takes a few months to get a good offer on a short sale. So get going.
Ryan writes, “My wife is nine months pregnant.” Congratulations, Ryan. “And our lender just offered us a terrible modification. We think we have to sell our home but with the baby due, we don’t want to be showing the home and have the stress of moving that soon. How can we drag out the short sale process to accommodate our situation?” Ryan, if your wife is nine months pregnant, you don’t have to drag out this process at all. In fact, unless you’re really late in foreclosure, you have time to have another baby before this short sale’s going to be done.
See, the truth is the short sales are somewhat under your control in terms of how fast they go. Now, of course, the lender can’t pressure you with foreclosure if you stop to making your payments. But in most dates, that gives you three to six months of time anyways. And you usually can get lots of delays if you communicate with them well about your intentions and what you’re trying to do. And then when you get the short sale, it’s going to take them – it takes them at least 45 days to approve. Heck, I’ve got one that I’ve been trying to get approved, a cash deal. This is ridiculous. A cash deal in Florida, $45,000. I’ve been trying to get it approved since December 1st, how embarrassing is that?
But at any rate, so Ryan, don’t worry about moving this thing too slow. It’s going to blow your mind how slow these things can go. I mean, a lot of our clients just freak out if they’re staying in their homes so long. We close one two months ago, that was our longest ever 26 months that took, but it’s not uncommon for them to take four months to nine months.
Curt says, “As you know Mike, we were put on a trial mod yesterday.” Yes, the last week. That’s right, Curt. I do know that. “What can we do to ensure that it gets extended to a permanent one? Are there things that we could be doing?” That’s a really good question. Hundreds of thousands of people have been put on trial modifications. If in the first review, the lender determines that you qualify for a Making Homes Affordable loan, they put you on a trial modification with their best estimate of what your payment will be. That’s a great program.
And well, I got to say a real, real high percent of those put on trial mods that I’m aware of get it extended, turned into a permanent modification. I know the press is not as positive about it. You hear an awful a lot of horror stories about people just being jerked around and not given …
Ryan Rockwood: We always are going to hear the bad stories.
Mike Rockwood: Yes. Yes. But honestly, we have a real high success rate of people who get on [phonetic] that offer getting put on a permanent mod. And I think the key is, Curt, is to take now – they’ve approve you. And so their underwriter is going to want to confirm what they’ve approved. Don’t throw them a curve ball. Don’t send them information that doesn’t corroborate what you told them. So, yes, what you can do right now Curt is to make sure that everything lines up exactly like you told them.
Now, you know, I say exactly. It doesn’t matter if you’re off a few dollars here or few dollars there. But you have to understand the key ratio is just like you did in your loan mod application. You have to understand that debt-to-income ratio front-end and back-end, and you have to understand your cash flow. Beyond that, there really isn’t too much else to worry about.
So what you got to do, Curt, is get ready to submit all that confirming information because once you start making those payments, probably within six weeks to eight weeks, you will get the packet from the lender. And they will want you to include documentation proving all those things that you told them. Then the other thing, Curt, is just to meet their deadline. You know, they’ll send it to you and they’ll give you like five days to get it back to them. What I advise people is the day it arrives, complete it, notarize it. Get your cashier’s check and send it same day. Don’t split hairs. Don’t try to put it off at all.
Jim says, “Our Florida condo finally was approved for a short sale. We’re now ready to close. It was a cash buyer. But now the buyer’s gone.” Okay. Boy, this is familiar. “How should our agent handle this with the bank?”
Jim the situation you’re facing is not at all uncommon. And even though the lender’s approval letter said in no uncertain terms, you cannot switch buyers. It probably also said without our prior written approval. And the reason they do that is because they do not want any hanky-panky. They don’t want, you know, you assigning this back to you back to the seller getting assigned back to them or to their brother or their cousin or their son or daughter, et cetera.
But reality is, if your lender can – if your broker, if you agent can find another buyer quickly, that’s what I would do. I wouldn’t tell the bank that the buyer’s gone. I would quickly get another offer. Hopefully, it’s going to be every bit as good. Get your broker to submit the new contract with a new HUD-1 Settlement Statement to the – and have all these prepared when they break the news to the lender.
Now the lender will probably only take 24 to 48 hours to turn around a new approval letter and you won’t miss a beat. Now I’ve done this even at the very, very last minute because sometimes you’re not sure you lost your buyer until – well, sometimes, you can’t find these – you can’t communicate with these people. So, you’re finally convinced that he’s gone. You get a new one. And sometimes there’s only a week left in the approval letter or something like that.
I’ve always been successful in convincing lenders to extend that approval date. Really, lenders have gotten awfully flexible about extending the approval dates. A year ago they weren’t. But these days with financing being as difficult as it is, they’re pretty, they’re pretty reasonable in extending those dates. All right, you could break in anytime.
Gilda says, “We’ve been trying to settle our home short for over six months. We just can’t get an offer. We have not made payments for six months. How long do you think we have until foreclosure will start? And any tips on getting it sold. We are in Modesto, California.” I was just going to say Gilda, why hasn’t your lender gotten all over you about missing six months of payments and then you answered your own question. You answered that question. You’re in Modesto, California where over 75% of the homes are more than 125% upside down. That whole Central Valley has just been ravaged and the home prices are way down.
So, Gilda, you have many more months. You might have more six months before your bank even gets serious about foreclosure. So, if I were you, I would not rock the boat. It is hard to get short sale offers in Modesto. But honestly, what Ryan and I always do is we just start lowering the price every week because there is a price at which you will get an offer on your house reasonably advertised this week. You don’t know what that price is.
So, what Ryan and I usually do when we’re really aggressively trying to end a short sale is we reduce the price like 5% every week until we get an offer. So, that’s one thing you might do, Gilda. But on the other hand, I wouldn’t rush things. Why do you want to rush things? Maybe you need to move or maybe you’re sick of the dings on your credit.
Ryan Rockwood: All right, will you hand me my palm phone thing there? I have a question here from Blitz King [phonetic]. I was scheduled to make four payments of $2,012 starting from February to May for the trial period. But at my third payment, they sent me a letter of enclosed loan modification agreement and have to be signed and pay $2080 by April 12, which is a coming Monday. So as of – forgive me, I’m not sure where else it’s going – but as of May 1st my new balance is basically $250,000. Payment begins on 06/01, one to five years. My interest rate is just under 5% monthly principal interest, $1372. Do you think it’s high?
Mike Rockwood: No, that’s good.
Ryan Rockwood: Well, you know the balance is only $250,000 though.
Mike Rockwood: Well yes, but I haven’t got a calculator to do the math but he was at $2012 on his trial, $2080.
Ryan Rockwood: Okay. Well, its’ the monthly escrow payment of $700 total payment $2080.
Mike Rockwood: Okay.
Ryan Rockwood: Number of monthly payments, 60 months. And then years 6 to 27 interest rate is 5.125.
Mike Rockwood: I don’t know how you can argue with this interest rate. This obviously isn’t a house you live in.
Ryan Rockwood: Maybe that’s not the question though. Okay. “Should I try to negotiate for one to five years interest rate of 3.375 and after that, 4.475? Should I try to negotiate for more?
Mike Rockwood: I wouldn’t accept this if this is the house you live in because a 5% interest rate …
Ryan Rockwood: Wait. Unless this is – if this is the house that you live in, is that what you’re saying?
Mike Rockwood: Yes. If this is the house you live in, you should be able to do better than that. Obviously, this lender didn’t get any support from the government because they didn’t lower your rate very, you know, like they would of it. It was a Making Homes Affordable loan. So it’s always advisable to fight for Making Homes Affordable loan if this is the home you live in. Man, I think those modifications are so sweet that you really should fight for a Making Homes Affordable Modification.
And I don’t think that it’s really smart to try then negotiate for a particular interest rate. And you know, I mean, this is just my way of negotiating. I just go back to them and say, listen this is the payment I can afford. How can you help me? I try to put it in their lap so that they can think of different ways to get you to where you got to be. Sometimes if you solve their problem for you, they take exception. If you solve their problem for them, they get a little offended. I just think it’s a better strategy to lay the problem on their lap and have them solve it rather than to give them the solution.
Ryan Rockwood: OK, so he goes on to ask, “Do I still have to make the fourth trial payment which is due on 05/01?” You got to call the bank on that one, think, right?
Mike Rockwood: Yes.
Ryan Rockwood: I was hoping to get my total monthly payment to $1,500 and $1,600. Well, yes, that’s great. But I mean, the thing that we got to figure out is do you know what had stop you from getting there?
Mike Rockwood: Yes, why didn’t you qualify for Making Homes Affordable? That’s the first question.
Ryan Rockwood: Yes, well if you did, maybe he’s just got really awesome low debt.
Mike Rockwood: And high income, right?
Ryan Rockwood: Yes, so maybe – I mean if you hit the 31% right now at these payments, you’re toast.
Mike Rockwood: Yes.
Ryan Rockwood: Does that make sense? In other words, for those that are new to the call, there are ways that people – there’s what they call waterfall of …
Mike Rockwood: Qualification
Ryan Rockwood: I guess, I got to do it this way, things that people – qualifications of ways that your bank is willing to work with you to relieve you up to a certain point. No one’s going to work with you once your debt-to-income ratio gets to 31%.
Mike Rockwood: It gets below that.
Ryan Rockwood: It gets below that. Then that’s it. You’re out. So, did you hit that? Or it’s important to know if you did it. What was the reason? I’m getting distracted by the leg. “Is there a principal reduction for people in New Jersey?” Someone asks online.
Mike Rockwood: Hey, now, people in New Jersey are Americans, aren’t they? They pay taxes. Don’t they, Rock?
Ryan Rockwood: It beats me.
Mike Rockwood: Of course there is. What are you talking about Principal Reduction Programs?
Ryan Rockwood: I think that that’s …
Mike Rockwood: Of course there is.
Ryan Rockwood: Well, is New Jersey the only state where they still make you pump your gas like manually, like…
Mike Rockwood: You mean have a professional puppet [phonetic]? Really? Really? Cool.
Ryan Rockwood: Yes. It’s like – so they probably make [phonetic] a lot more taxes there.
Mike Rockwood: It’s the garden state, you know. Most people don’t realize how beautiful New Jersey is because they think of newer [phonetic]. New Jersey is beautiful. And they have principal reductions.
Ryan Rockwood: Okay so, good news there. Okay, so let me burn some of these.
Mike Rockwood: Okay, how about this one?
Ryan Rockwood: We got some people waiting here.
Mike Rockwood: Okay.
Ryan Rockwood: Richard asks, “Any news or direction in getting assistance on refinancing or modifying a second unsecured mortgage after going through a HARP on the first mortgage?” HARP, homeowner reduction principal on the first.
Mike Rockwood: Refinance. So, he refinances first. Now, Richard, what about …
Ryan Rockwood: But he’s saying he got a principal reduction on the first.
Mike Rockwood: Yes, well, refinance program. That’s the Home Affordable Refinance Program.
Ryan Rockwood: So he got a principal reduction.
Mike Rockwood: Maybe but at least he got it refinanced. You know, you don’t know for sure. So, he’s solid on his first. But man, Richard, seconds, it’s like hay day on seconds. In fact, it’s not going to be – I mean things are really breaking in terms of liquidating seconds and negotiating with seconds. We’re in negotiation and putting together a package of information about seconds that we’re going to really merge that with our Credit Card Cure work very shortly because …
Ryan Rockwood: My dad’s doing some top secret work.
Mike Rockwood: Oh, man. This is ninja stock.
Ryan Rockwood: I don’t know if I’m allowed to tell you, but right now he’s down to a $200,000 mortgage for $20,000 he’s looking to settle. So we’re going to have a new course, new module coming out on absolutely settling seconds.
Mike Rockwood: On settling seconds.
Ryan Rockwood: Now we encourage people though. It’s still ways off [phonetic]. So I would encourage people not to wait to go through the loan modification process. It’s free. It doesn’t cost you anything. Modify the mortgage down while you wait, okay.
Mike Rockwood: Yes, no kidding. Why not?
Ryan Rockwood: And then we’ll get into the specifics of mortgage settlement. Okay. And, you know, we should really talk to Richard.
Mike Rockwood: Yes.
Ryan Rockwood: We should make a note of that because that could be really interesting interview on some different things.
Mike Rockwood: Yes.
Ryan Rockwood: Denise or Dennis asks …
Mike Rockwood: It’s Denise.
Ryan Rockwood: Denise? “Can I reduce my interest rate by modification?”
Mike Rockwood: Do you know how much we paid for his college education?
Ryan Rockwood: There’s no payment for it. “Can I reduce my interest rate by modification and refinance at the same time under President Obama’s Making Home Affordable Program or the new plan for troubled homeowners? Can I reduce my interest rate by modification and refinance at the same time?”
Mike Rockwood: At the same time? No. No, you can do one or the other and why would you want to do? You know, here’s the deal. The loan modification is so much less expensive. So, you probably want to think about the loan modification first. Then look into the refinance as to whether or not, it can eliminate any of your principal. Because then, of course, there’s a whole new math equation that you got to use because if you’re looking at the opportunity to shave, you know, some 10% to 30% off of your mortgage amount principal owed, then it’s worth it to invest in that refinance program, okay.
Ryan Rockwood: Okay Stan gets into a big long – what do you call this?
Mike Rockwood: Tie rate?
Ryan Rockwood: No it’s like when you justify things …
Mike Rockwood: Apologetics.
Ryan Rockwood: Apologetics, yes. Stan, you have graduated, man. This is big time. He says he’s filling out a mod for Citibank. Both my wife and I have to sign this as primary residence. We’ll live in the house for the next 12 months. Next door, I built a house for my mother of 91 years, so we can take care of her – I contend that a married couple can have two homesteads for primary residence. Even if I sleep at my mother’s place for over 50% of the time to take her, he goes out to say some catholic couples do not divorce, they live in separate homes.
Mike Rockwood: Yes.
Ryan Rockwood: Anyway, I would say that is a nice try but I don’t and goes on to be concerned about perjury.
Mike Rockwood: Purgatory? The guy’s Catholic.
Ryan Rockwood: Maybe.
Mike Rockwood: Or perjury.
Ryan Rockwood: Well, no, he doesn’t say he is. But you know, I wouldn’t get into issues of perjury or whatever like that. I mean, you really have to go on this stuff. I’ll [indiscernible] my mouth onto the screen. I don’t know. I think you have to let your conscience guide you. And I’m not saying that in any sort of holier than that way, I say do what you got to do to make ends a meet for yourself and your family. I’d probably go the road of filling out the form however you want personally. But I don’t think you can justify it all. You know what I mean? Just go with the blatant lie and put extra buck in the collection plate if that’s the way you’re going to go.
Mike Rockwood: If you’re Catholic.
Ryan Rockwood: Yes, anyway…
Mike Rockwood: Because I think a buck takes care of a white lie.
Ryan Rockwood: But also, I mean, a homestead is something that is recorded. So, that’s another issue. It means recorded in the tax record, your homestead.
Mike Rockwood: Yes, in terms of a loan modification, they’re just asking for you to state whether or not this is your primary residence and prove it with some utility bill.
Ryan Rockwood: So, expect to undergo that level of scrutiny by not more. Hello. If you do have another homestead, expect to get cut out on it. You’re going to have to explain it somehow and the only that I could think you’re going to be able to explain it is a rental income – a rental lease. So, in other words, you’re going to have to rent that home to your mom or vice versa or have her live in your home.
Mike Rockwood: That’s easy.
Ryan Rockwood: Yes, no big deal. But I mean they will get you. I was working with this client the other day and they called me up and they said, “Well we don’t think he lives at his home. We think he lives at somewhere else.” And I think it was actually his office address that they think thing he lives at. That’s an easy one but …
Mike Rockwood: The bank called you?
Ryan Rockwood: Well, I called the bank and that’s what they said, yes. They said that public records indicate that he doesn’t live there, something like that, you know.
Mike Rockwood: For a loan modification.
Ryan Rockwood: Yes. In fact they’re still going for it. Anyway, so bam, that one’s done.
Lou Anne [phonetic] asks, “When someone files petition for PK for the auction date, does he or she need to notify the trustee as far as calling trustee and telling them that a bankruptcy file is coming? So, the notice of trustee sale in the auction can be delayed. Will the trustee check that the court …” You know, I would say that in almost all situations, you need to call yourself. Everyone call them an extra three times because homes could be sold all the time.
However, bankruptcy is seemingly like the kryptonite or something in the foreclosure. I mean, I don’t know how it is so good that they always get bankruptcies and they don’t get 90% of the other thing.
Mike Rockwood: Yes. That’s very true.
Ryan Rockwood: I don’t know how. It just seems like you need to …
Mike Rockwood: I guess because lawyers are involved.
Ryan Rockwood: I guess, and all you need to do …
Mike Rockwood: And then lawyers crafted all of the processes that we’re talking about.
Ryan Rockwood: I mean it’s really astonishing. It seems like you trip and fall and mention bankruptcy.
Mike Rockwood: Yes. All your lenders stop calling you.
Ryan Rockwood: Well, they won’t sell on that day anyway, so you should be good.
Mike Rockwood: Yes. So in other words, Ryan is saying do call. It’s always better to redouble your efforts.
Ryan Rockwood: Okay. “I have got my verification of employment,” says M who wants for two by M tonight, say they were counted as – okay, I am also bringing in this my old monthly loan balance …
Mike Rockwood: Up too lengthy. Come on M.
Ryan Rockwood: As it is brutal.
Mike Rockwood: We got to answer this off. We got to answer this right after we’re done.
Ryan Rockwood: You know what I got to say. I got to say if any of you joined the call today prior to the webinar starting. There was an image.
Mike Rockwood: Oh yes, you can talk with them.
Ryan Rockwood: Yes and it was – it’s graphic artist is so incredibly good. She did this image for us …
Mike Rockwood: And her name is M.
Ryan Rockwood: Yes so go seek her out. You can e-mail as at ryan@60minuteloanmodification.com. I’ll show a picture of her real quick. Okay, now I think people see that. Look at this picture. It is so good. She did this custom for us. It’s not clip art. Don’t copy it if you’re watching. Anyway, that artist is available. I cannot name her …
Mike Rockwood: But listen. We got to get that answer to her because we owe her big time.
Ryan Rockwood: Yes.
Mike Rockwood: But let’s take this a little dinky question.
Ryan Rockwood: No, forget that. Let’s get some of these people here that just wrote in because those people may not be watching. These people I think are …
Mike Rockwood: This came in an hour ago.
Ryan Rockwood: Yes, okay, this is a realtor with a nice signature here is Scott. “Is anyone aware of challenges with the homeowner filing for chapter 13 bankruptcy that has been approved for HAMP and successfully completing the trial?” Absolutely. Absolutely. I have certainly heard of all loan modifications absolutely being thrown out the window. I think that – and I don’t know about that for certain. But it’s definitely on our radar that if you’ve received the modification, fingers crossed. You can keep it through bankruptcy but all bets might be off there. But I don’t know why really – I would say that if you’ve got a HAMP on the property and you like the HAMP and don’t want it, you know, I would think that
Mike Rockwood: You like it in what?
Ryan Rockwood: Well, like the property at – what did I say? I don’t know – you like the property and don’t – I mean you wanted to stay the way it is. Exclude the property from bankruptcy. Maybe in chapter 13 you can’t do that but certainly in a lot of bankruptcy filings you can do that. So check that out.
KC asks, “Who are we recommending these days for credit cleanup? I use Sugar Land once but I think you guys are working with someone else now.” We don’t’ have a recommendation as of this time for credit card – for credit restoration. We have lots of ideas and we’re kind of holding off until we get some – we’re actually going to try to use some of ourselves, but as you know, that cost a lot of money and takes some time so we’re holding of.
I have this really, really neat one. It’s all kinds of neat things people are thinking of ways to restore credit. One of the neatest, I was just laymenting [phonetic] today because I forgot the name of the company. But what they’re allowing you to do is basically rent a revolving line of credit that you can’t use. So, it the costs like $50 or $100 a month for $10,000 line of credit that gets reported every month. Wham, wham, wham, wham. Unused, unused, unused, you know.
And I’m really excited about bringing some stuff to you like that. It’s all going to be brought out. If anyone’s interested, you can check out our companion website, the Credit Card Cure, the creditcardcure.com. And you can also see where it’s going, ryanrockwood.com, that’s where we’re building the new site to replace the very modest, current Credit Card Cure site. Anyway, the book’s coming out. It has a whole chapter on role [phonetic] section of credit restoration moving forward.
Mike Rockwood: And it’s a really strong chapter. I mean, it’s a powerful system, some real up-to-date information and some good practices as to how to implement it. It’s really well thought of. Good job.
Ryan Rockwood: I think that – thank you – I think that if everything goes well, I think that it won’t be like oh, go with Lexington Law. They’re great and your problems are solved. It’s going to be, you know, it may include, like a lot of our things, five smaller components, modules that you can implement according to your own budget and availability and energy and stuff like that.
Mike Rockwood: Because you see, in terms of credit restoration companies the part of their services that we do recommend is disputing the negatives on your credit report because the whole process of disputing the negatives just because of the way the professionals do it does eliminate some actual negatives that really are your negatives.
So, that’s the part of credit restoration that we always recommend that you do hire out because none of our clients have ever successfully disputed the negatives adequately even with the automated systems that all three bureaus supply or provide for disputing negative marks.
So, that’s the part of the service and we have a hard time with a lot of the services because they won’t break out just that service, you know. They want $800 plus $45 a month per year to do a complete credit management job when we really only need the negatives disputed. And that probably is worth, when you can find a company that will do it, probably worth about $400 or $500. So, that is what we’re shopping for is a good recommendation for somebody who will just do that portion because all the other parts of credit restoration are really habits that you should develop in your own financial practices that just become part of the way you manage your money that drive your credit score up, up, up to the stratosphere.
Ryan Rockwood: We got a question here from Bret. Anyway and to go back, we’re really excited about credit repair, credit repair – I mean, it’s something that we all need and – because we’re going to have to blow through. The only thing that the – our mortgages anything have on us is our credit. And if we can blow right through that and recover fast, we really can make it through this very much better than, you know, than we started out than we are right now, that’s for sure.
Mike Rockwood: Right.
Ryan Rockwood: Anyway, Bryan C. got an offer from – got a loan modification offers second mortgage. He thinks it’s pretty crummy. And actually it looks good. But then he thinks he wants to take it. After 18 months, he goes back to the same old same old, however.
Mike Rockwood: Eighteen months, shoot. So, it’s just some accommodation, some little …
Ryan Rockwood: Resurgent Capital Services, he says. OK, first new monthly payment of $435 up front fee wave, how gracious of them.
Mike Rockwood: Yes.
Ryan Rockwood: And document it, you have until – oh, I was going to say – it looked like it has already expired. Anyway, you know, Bret, I don’t know. Here’s the thing. If you got a great loan mod on a second and – I guess there’s – I wish I could answer this. I have a lot like one-liners I could shoot out but then I think of the one or two situations where that doesn’t apply. You know what I mean? And then the answer gets really complexed. But, I guess, first of all what we have to think is secured or unsecured. Is there any equity in the home?
Mike Rockwood: Good.
Ryan Rockwood: Are you in any state where there is a recourse state? Could there be deficiency judgment? Also, he lives in Hawaii, so unsecured, secured recourse, non-recourse. Temporarily, pretty good, cool, rock it. That’s one option, okay. How’s your life [phonetic]? Do you have a lot of things going on? Is the marriage solid, the kids happy, the first mortgage under control? If all of those things, all those answers aren’t like, you know, my life is wonderful, I have to spare money and tie up my hands, I would just take the darn thing on the second mortgage and then get the family, the home, the first mortgage, everything else taken care of. Return back to this. Settle this later on maybe in a year or 12 months from now right before it goes back. You cannot pay the last six months and then settle that sucker. Okay.
Mike Rockwood: So, more and more that’s going to be looking for, Bret, is ways to settle seconds and get rid of them.
Ryan Rockwood: But he says he’s also a happy customer. Thanks a lot. That’s really nice to say.
Mike Rockwood: Yes, thanks Bret.
Ryan Rockwood: So, if you’re watching this, you can be like Bret and just scroll on down the page.
Mike Rockwood: And be a happy customer
Ryan Rockwood: Yes, and become a happy customer.
Mike Rockwood: First of all, if you’re generally a happy person, wait until you see what we’ve got for you.
Ryan Rockwood: So, click on the Add to Cart button. Again, you do get $25 just for this …
Mike Rockwood: $25 off?
Ryan Rockwood: $25 bucks off just for being a part of this call. And okay, okay, we got an online – wait, let me get rid of all my e-mail questions first. Edith in Arizona asks, “Is there any risk to the $800 experimental Principal Reduction Program you mentioned earlier?” Yes, the risk is you could lose $800. Could it happen? For sure.
Mike Rockwood: Now, let’s think about whether or not Edith is a good candidate for that.
Ryan Rockwood: She actually is pretty good. She’s in Arizona.
Mike Rockwood: Price or value reduction. She has a good job.
Ryan Rockwood: I know her home value though is very low. You know what I mean? But I remember thinking about it and I remember thinking to her, you know, you probably could go for that.
Mike Rockwood: Yes, Edith. Let’s just review the criteria. You home has to have – has to be upside down by more than 20% on the first mortgage. So, I’m forgetting your first mortgage value but think about that. You do have enough income. You’re not currently in default. So, you would have to go into default.
Ryan Rockwood: Should not? Are you sure about that?
Mike Rockwood: Yes because she got a good trial mod. She’s on a trial mod.
Ryan Rockwood: Yes. I mean you kind of have to pick your …
Mike Rockwood: Yes, pick your poisons.
Ryan Rockwood: Yes.
Mike Rockwood: So, it could be a good one, Edith. Let’s continue to dialogue about it.
Ryan Rockwood: Bret writes in. Hawaii is the state. No acuity. A quick Google search reveals that Hawaii is a non-recourse state. So, that means it can’t go after you.
Mike Rockwood: He has no acuity in that second. So, you should get tougher with that second.
Ryan Rockwood: I don’t know.
Mike Rockwood: $400 is a lot to be sent in there [phonetic].
Ryan Rockwood: It really depends though. Maybe this guy makes 10 grand a month. You know what I mean? Maybe this is one little fly that – oh, it’s an annoyance. I don’t want …
Mike Rockwood: Okay, sometimes Bret people are having success in just calling these seconds and say, listen, I don’t know what you and I are going to do about this eventually because we, together, have a really big problem. The equity that you lent – you know, the acuity that I borrowed and that you lent on, it’s gone and it doesn’t seem like it’s coming back. So, what we’re going to do about it eventually, we don’t know. You don’t know and I don’t know. But in the meantime, let me send you a few hundred every month and you keep it from charging off so you don’t have a toxic asset. You can just pay attention to bigger problems. And let me just think about what I’m going to do about this home. So, let me just send you $100 a month or $150 a month. And actually, some people are having success with that. So, I recommend you try something more aggressive and try to cut that $400 – try to cut it in half or something.
Ryan Rockwood: All right, and then let’s answer some chat calls here. I know you said only the first counts when calculated in 20% underwater. But what is both here first and second are with the same lender?
Mike Rockwood: Yes, it doesn’t matter. Good thinking.
Ryan Rockwood: Yes, he drives it up. Not enough for this program though.
Mike Rockwood: You know, see because keep in mind your first and second, even though they’re serviced by Wells Fargo, could be owned – neither of them could – maybe are owned by wells Fargo. And generally, hillocks are not owned by same companies that own first mortgages.
Ryan Rockwood: Can I still apply for a principal reduction after I get a loan modified later? Logically, yes. But these do not now always follow logic. So, you know, a government program might come out that suggests that you cannot get it modified or if it’s been modified since some date or something like, that they won’t mess with the principal. But I really don’t anticipate it being a problem. And then there’s always going to be the hedge hunt folks that will come in, swoop in and say, “What the heck with, we just hired you a higher interest rate.”
And even at the interest rates that the hedge hunt folks are charging, you know like, I’d say it’s an 8% interest or something like. It’s really not that big a deal if you lap up a big chunk of equity …
Mike Rockwood: Right.
Ryan Rockwood: It doesn’t at all – it’s like whatever.
Mike Rockwood: And then you can refinance out of it to today’s current rate.
Ryan Rockwood: You’re going to have to get though [phonetic] at that point, improve their credit for a while, so you have to, you know, you got to be in there for a year or something like that. Okay. Thanks a lot, another compliment there.
Mike Rockwood: 50% underwater on the first.
Ryan Rockwood: “We are 50% underwater on the first in Desert Hot Springs and we are current. Are we better out going for HARP or falling behind in doing IFI. I have good income? Bart, why don’t, you know …
Mike Rockwood: Oh, boy. That’s a great question. We should look into that further, Bart, because that’s a good question for Kennedy and us to answer together. We should get all three of us together on a conference.
Ryan Rockwood: Yes, let’s do a conference call with all three of us, Bart. If you – see I don’t have your e-mail address or anything like that. So, if you want to just send me an e-mail and say, “I’m Bart,” and you can send it to ryan@60minuteloanmodification.com. That’s ryan@60minuteloanmodification.com. I can set up a time where we can do a phone call with a mortgage lender and us.
Mike Rockwood: And figure out the two programs.
Ryan Rockwood: It won’t cost you anything.
Mike Rockwood: You know that’s a good idea. And Bart, let’s try to do that like tomorrow because I know, Kennedy, she got this migraine tonight but she’ll be fine. She’ll be at work tomorrow. She seems to never miss work. So, let’s try to do it tomorrow.
Ryan Rockwood: Yes so do it. So e-mail us. Bart, I hope you heard our answers.
Mike Rockwood: Well, why won’t you tell them what the answer is so he can read it?
Ryan Rockwood: I’m not that fast a typist.
Mike Rockwood: Say, e-mail me. Okay. That’s like saying, you know, respond if you didn’t’ get this e-mail or something. Anybody who didn’t get this e-mail please let me know. That’s exactly like that. I hope you heard our answer. Well, if he didn’t why not tell him what the answer was.
Ryan Rockwood: Modification.com. All right.
Mike Rockwood: I think we’re running over on time Rocky [phonetic].
Ryan Rockwood: Oh, really. All right, well, thank you everyone for joining us.
Mike Rockwood: Yes, our lawyer wants us always to tell you that we’re not lawyers. And our CPA asks if we could also mention that we’re not CPAs because they want to collect your money for those services, number one, and they want us not to be liable for your tax decisions and not liable for legal decisions that you make based on what we tell you. So, we’re not lawyers. We’re not CPAs. Don’t even act like one, all right.
Ryan Rockwood: Bart got the message, all right.
Mike Rockwood: Oh, great. Good.
Ryan Rockwood: Very good. Thank you. Thank you everyone. Thank you so much for joining us. Remember, your unannounced bonus for tonight is a free book on Eight Options for Homeowners. It’s an advanced release though, so it’s not perfect. To get it, send an e-mail to ryan@60minuteloanmodification.com that says free book in it. And also, click right above me here to schedule an appointment and you could do that as part of your kit, which is below me or you could just, you know, buy individual time. Also, be sure that not a single one of you leaves without buying the kit below even if you’ve already bought it before.
Mike Rockwood: No, that’s not good advice.
Ryan Rockwood: It’s guaranteed. It’s guaranteed.
Mike Rockwood: It’s the postal service [Indiscernible] back on the job.
Ryan Rockwood: Okay, it’s beneath us. Just click Add to Cart.
Mike Rockwood: Buy one for your friends and relatives.
Ryan Rockwood: Thanks so much for joining us.
Mike Rockwood: Thanks everybody. Goodnight.
Ryan Rockwood: Be sure to become a client and we’ll – you can join us on Thursday call. See you later. Hello, this is Ryan.
