Mortgage Modification: Free Teleseminar
“Beat the Bank, Protect Your Assets,
& Clean Up Your Credit—For Life!”
15 FEB 2009 l Clear Credit Mastermind Call
Ryan: Welcome to the Clear Credit Mastermind Group monthly teleconference. We’re here to beat the bank, protect our assets, and clean up our credit for life. Thanks for joining us today. We have a great call. We’re going to talk about a lot of exciting stuff. First off, we want to talk about the local news. Obviously, loan modifications are in the news in such a big way and in such a positive way that it’s got us really excited because we’ve kind of been laboring behind the scenes for well over a year now.
Mike: Ryan, the big event coming down the pike is Wednesday’s big announcement from the White House.
Ryan: Right, right. But not just that, in every single newspaper you’ll see. Every foreclosure article, every economic forecast, you’re seeing loan modification being used, whereas before it was looked at as some kind of hypothetical possibility to help homeowners. But it seems to be turning into reality here for thousands of homeowners.
Mike: I think the thing that’s going to change, now with this announcement, is our loan modifications are going to go from being superficial and trite. We’ve had a real high rate of loan modifications that have actually failed.
The borrowers are right back into default after as few as three months. It’s like 40-50 percent. I think what’s going to happen now is that the pressure from the White House, all the political pressure, is finally getting big enough to where the banks are going to be forced to do better modifications.
That’s what we’ve always been all about -negotiating hard after you get that first offer. So often that first offer is just so simple that you really have to negotiate hard to get a better modification.
I think that’s what the big change is going to be after Wednesday’s announcement. We’re going to see the banks start to reduce principle a little more often. We get an awful lot of modifications where you really need a two and a three percent rate for five years.
We’ve had a hard time getting those. We get four percents pretty easily. But I think the two and three percent are going to be easier because I think everybody’s realizing that they’re aren’t enough bailout funds to really fix this problem.
We need to really kick it down the road a few years and let the entire economy recover before we really see how bad it is. I think that’s what’s going to happen. We’re going get more serious about workouts, short sales, more serious about loan modification. I think it’s going to be a pretty exciting time.
Ryan: Let me back up a little bit. My name is Ryan Rockwood. I’m here today with my father, author and expert Mike Rockwood, author of “60 Minute Loan Modification“, and we are business partners here and we live in southern California.
We’ve been helping people all across the country do loan mods, short sales, all kinds of things. Right now we’re focusing on loan mods as perhaps the best option for most homeowners.
Mike: It certainly the cheapest and the easiest. It outguns refinance like crazy and, of course, short sales like crazy, for three reasons. You get to keep your house is the first one. Second one is you don’t screw up your credit, although an awful lot of people that are doing loan mods have to miss a payment or two, so it does hurt your FICO score. But the loan mod itself doesn’t. And then, lastly, they’ve really become the cheapest, fastest and easiest, least complicated way to really straighten out these mortgages.
A lot of us have gotten into, and remain, even after the mod, in a tough, real estate situation where we own assets that are underwater. They are upside down. But at least it makes it tolerable for a few years until we all figure out what we’re going to do about this market devaluation.
Ryan: The other thing that is attractive about loan modifications, the naysayers out there will say it’s not going to solve your problems, but the thing about the loan mod is it may be a triage, but that’s fine. Because if you short sale your home it’s not like you have another option in a couple of years. If you do a loan mod with your home and you make it through a tough patch or what have you, you may decide to short sale. Or you may decide to sell or whatever. But it’s a less severe first step.
Mike: Right, and you have to live somewhere. A lot of folks will say to me, you know, Mike, I think I should just go ahead and short sell it. Okay, so you’re going to move out of a $2900 a month house payment into a $2300 a month rent payment. It just doesn’t make sense to me. You really should try aggressively for a loan mod.
One thing happened this week with two customers. I really want to remind everybody is that there’s no reason not to try for a loan mod. Some of the lenders are more aggressively granting loan mods than others, but there’s really no reason not to try. It’s inexpensive, it takes thirty days, and really only takes one hour to prepare the application.
Ryan: I guess a lot of people think, oh, well, that’s going to cost me. There are a lot of companies out there charging $3,000, $5,000, and then they think this is a bigger deal. But we don’t advocate that. We suggest the people basically do their own loan modification with some basically educational assistance from us. Now what you’re thinking behind that? Do you want to go over that?
Mike: I think that’s pretty critical. It’s like believing that you need to hire a Philadelphia law firm to help you prepare your taxes. I mean, you can prepare your taxes yourself. You can modify your loan yourself. Most people choose to have somebody who does that day in and day out for a $100, my guy charges me $250.
Ryan: You’re talking about taxes.
Mike: Yes, your taxes. So it’s kind of comparable. And it’s kind of comparable in magnitude too, in terms of the paperwork you have to get together. So, I think that’s fine.
Ryan: So you need some education.
Mike: And you need insider information. Think of all the insider tips that we put inside the workbook and that we put on the CDs. Folks can listen to me talk to the banks about loan modification. That stuff just makes it so much easier, so much faster. You don’t make any mistakes.
Remember the first loan modification that I did last September with IndyMac was a joke. I went back and calculated that I actually spent 60 hours on it. And I just submitted another one this week and I literally spent 30 minutes on it. That’s own my own property.
Ryan: So that’s a different loan entirely so we don’t confuse people. You’re still doing loan mods on your own mortgages.
Mike: My own property. I have these five properties and that’s nine mortgages. So now this week I submitted the last, so I will have modified every one of those nine mortgages in seven months.
Ryan: So we’ve got some major announcements in the news. Loan mod, loan mod, loan mod. President Obama, I’m not sure if he’s actually said the word “loan modification” yet, but he is certainly talking about a housing rescue bill. In fact, we’re looking at a separate and distinct housing rescue package being put together by his treasury secretary. That was announced last week, but with very few details. The market tanked, perhaps as a result of the very few details. But it sounds extremely aggressive.
Now, the other big thing is that this Wednesday the President is going to announce his housing rescue bill. That was dramatically moved up a couple of weeks, maybe months. They wanted to release it later but there was a lot of pressure on them to get something out.
In response, some of the biggest banks in the world have come together and said, okay, we’re going to put a moratorium on foreclosures until we find out what the President has to say and if we can work with it. What do you see in that? Do you see that as political maneuvering on the part of the banks that are getting all this money from the government? Do you think they’ll really try to clean up their act?
Mike: I don’t think that does anything. Remember the governor of California, Schwarzenegger, also had a moratorium on foreclosures for about two months. It really doesn’t do anything for anybody. It just interrupts the cycle. What it did is kind of screwed up the stats so that we saw a leveling off of the rate of increase of the numbers of foreclosures in California in December and January. But who’s kidding who? You’re not fooling anybody. It’s just because they were illegal for a couple of months. So they’re going go right back up in February and March.
Ryan: The situation itself is turning around, you’re saying.
Mike: Yeah. It’s not like the decline in values, not like the decline in prices have gone anywhere. And unemployment is going up, so housing is just the first shoe to drop. The employment shoe is dropping, the credit card debt shoe is about to drop.
So we’ve got a lot of lumps ahead of us, so this CCM group, I think, is particularly timely, to be able to get together and talk about street fighting strategies for these tough times. We’re going to face some real tough times here and the people who are proactive are going to be able to make it through real nicely.
Ryan: Okay, Bank of America, Wells Fargo, Citigroup, IndyMac and Fannie and Freddy. These are some of the biggest banks that have signed on and said, okay, we’re going to agree to a voluntary moratorium. What do you think our listeners on the call, obviously all of us have mortgages. Mine was Wells Fargo. These are some of the biggest banks in the world.
… continued [full transcript available by email help@60minuteloanmodification.com]
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