File Name: Loan Mod Qualified Written Request
Duration: 00:44:23
Ryan Rockwood: Hi, everyone. Welcome to the call. If you’re wondering, you’ve reached the 60-Minute Loan Modification Weekly Teleconference Call, so I hope you meant to find that call. Anyway, we’re glad to have you here. We’ve got a good topic today and let’s just get right into it.
Welcome to the 60-Minute Loan Modification Insider Secrets Teleconference Series. We’re here, as usual, to beat the bank, to save your home, and to help you escape bad debt forever. My name is Ryan Rockwood. And as usual, I’m joined by my father and business partner, Mike Rockwood, on today’s call. Before we go, couple of announcements.
We’ve undergone some big changes here at 60-Minute Loan Modification in the past weeks and we really appreciate your patience. We’re adding more resources to our website and we’ve changed our pricing structure and services. And we’ve changed these weekly teleconferences as well. Really, we’re here to help you, so if things need to change to make that happen then we’ll do it. So, that’s what we’ve been working on.
Announcement number two, today and every Tuesday we will now be having these calls where we cover loan modification 101. This is where we go over the fundamentals and try to answer as many questions possible. Thursday’s call is now for current clients only. Okay, so that’s the change. I just want to make sure that everyone notes that because there will be something special. Tracy is going to take care of that special call in number or pass code or something. Just make a note of it. It will be very simple and very easy, but it’s just going to be a little bit different than we had in the past.
So, Thursday’s calls are now for current clients only. And that’s where we answer all the questions and get into some really aggressive and sometimes highly involved tactics that can be used to strong arm your bank and get results. What we were finding was that it was a bit of a challenge to serve everyone on these calls with the whole wide range of things. So hopefully, what this will accomplish is spread it up or I should say cut it up and it will get beginners on one call, and the advanced people won’t really get frustrated listening to those beginner questions. Okay.
So, please continue to join us on Tuesday. And if you’re not yet the proud owner of a 60-Minute Loan Mod kit, buy it now and you can join us on Thursdays as well. Of course, you still get all the other bonuses like free kits [phonetic] of your hardship letter, loan modification application, the coaching session, and a bunch of other stuff. Really, it’s an amazing value that pays for itself many times over.
All right, one more. Tuesday’s calls will be recorded and made available eventually. We do get back log, so be patient. But Thursday’s calls will not be made freely available. At some point, we’ll probably release a compilation of these recordings. But for now, it’s a close-door session, okay. On with tonight’s call, tonight’s topic is The Secret Power of Qualified Written Request. And now it’s time for – Mike Rockwood is here.
Mike Rockwood: Are you ready for me?
Ryan Rockwood: Yes.
Mike Rockwood: All right, hi everybody. Hey, before I get started on Qualified Written Request, I want to tell you a couple of interesting things that happened over the last couple of days. And one of them relates to this QWR. Talk about – you know, last time we were together, I talked about getting the wrong answer and how I recommend you when you do get the wrong answer. Like, hey, were not modifying mortgages or your particular investor is not modifying mortgages or we never give modifications to anybody who’s current on their mortgage not late.
I always recommend that you handle the wrong answer in three different ways. The first one is, ask it five times. In other words if you just can’t get the right answer out of the person you’re talking to, hang up and call back at another time, another day. And do that five times and you would be surprised how on the second, third, or fourth time you’re going to get a different answer. An example of that relayed to me this morning that I’ll share with you in a minute.
The second recommendation I have is that if you just can’t get the right answer, then escalate it to a supervisor. Now, you want to do that, of course, with a diplomacy and proper etiquette but you can just say, “Listen, you know, this is so important to me and I just don’t – I’m just not comfortable with the answer that I’m getting. I need to hear that from a supervisor. Would you mind putting a supervisor on the phone?” And you can listen to examples of me asking lenders to do that on the phone tap CD that’s part of the kit. For those of you who have that phone tap CD, if you haven’t listened to it, you really should because there’s a way to go about asking you’re going over someone’s head. And there’s a way to do it that is not offensive. If you just explain that it’s just too critical for you to let this go and you don’t believe that you’re getting the right answer.
Now very often, the reps are so busy that they’ll say, “Listen, we have a supervisor on the floor, of course, but they’re too busy to take your call right now. I’ll have them call you back.” Well very often, they never get around to it. So, you may have to call back in and remind them that you’re waiting for the supervisor’s call. You have to push it a little bit, but eventually a supervisor will call you.
Now if they still don’t satisfy you and you still feel like you’re getting the wrong answer, then you want to use a qualified written request, and now I’ll get down to the specifics of how that works here in a minute. But the story that I want to relay to you is really a funny one. A client told me this morning that he was told that he did not qualify for a loan modification after going through his prequalification call. And it was prior to him signing up with my program and he wasn’t actually prepared properly for the call. He made the prequalification call. At the end of it they said, “I’m sorry, you just do not qualify.” And then after talking with me, he called back to go through the prequalification again. And he got the Customer Service Department.
And this is so funny. The customer service department, before passing him on to the loan modification department who had only 24 hours earlier, told him he didn’t qualify for a loan modification, offered him immediate access to a $10,000 line of credit because his FICO score was so high and his history with the bank was so good. So, on his way to get his loan modification, he was given a $10,000 line of credit. And then was transferred to the Loan Modification Department.
Ryan Rockwood: That’s really weird.
Mike Rockwood: Yes, it’s really weird.
Ryan Rockwood: And he wasn’t late.
Mike Rockwood: No.
Ryan Rockwood: He wasn’t late on his mortgages.
Mike Rockwood: Right. And then when he got to the loan modification or to the Loss Mitigation Department, after some coaching from me, he in fact did qualify. So, isn’t that funny? On your way to a loan mod, you get $10,000 in additional credit. Man, the banks are really hosed.
Ryan Rockwood: Definitely.
Mike Rockwood: All right. So, let’s move into this qualified written request now.
Ryan Rockwood: Well, let me make an announcement. Everyone can reach us. We’re going to open the line for calls here in a little bit. But also, if you’re in front of a computer, put it down in e-mail and shoot it in to us and we’ll try to answer it right here help@60minuteloanmodification.com. Okay, and you can e-mail that in any time and we’ll try to get to them.
Mike Rockwood: All right so, I got to admit that the Qualified Written Request has been touted by a lot of loan modification crackpots as kind of a secret weapon to be used against your lenders. And they use it in a way to attract attention and to get people who feel like they’re powerless against their lenders, to feel like they have some power and that, in fact, they can bring the lenders to their knees.
Well, in fact you can get their attention and in fact, by law, they have to respond in certain ways. But I got to tell you in the whole loan modification game right now, the lenders are, in fact, kind of towing the line and they are responding. So, it isn’t all as sexy as a lot of loan mod firms make it seem. But you know they always blow up all these examples that make good press like produce the note strategy that was so popular a few months ago. They sound good.
Ryan Rockwood: What happened with that? We were all going to get our houses for free.
Mike Rockwood: Yes, yes, get your house for free. Just get your lender to produce the note. Well, yes, it’s a useful strategy. I mean, it’s a smart strategy if your strategy is to delay your foreclosure. But that’s really all it’s good for. Realistically, very, very few people across the country have ended up getting their loan in any way modified because of the Produce the Note Strategy. However, some folks have delayed foreclosure for apparently as long as eighteen months.
Ryan Rockwood: I heard about that whole thing. And the one thing that always gets me is there’s always – you know, it’s kind of hard because there’s all these – oh my gosh, these commercials are getting crazy for loan mod this and that and pay me $5,000 and this and that. And it’s hard. It would be really hard for the public to know. But I think what people don’t realize is if the bank just couldn’t produce the note, they’re still going to foreclose on you.
Mike Rockwood: Right.
Ryan Rockwood: You just need to – the only way to stop it would be for you to hire a lawyer, which involves a retainer fee. And no one’s going to take it on for less than, I don’t know, 20 grand, 25 grand upfront. And you’re going to have to go to battle with the bank who does not give a darn about litigating. You know what I mean?
So anyway, they’ll just assign someone to the case. Anyway, the bottom line is it’s not like you just call up the bank and then say, “Oh my bad. I guess I don’t have it.” They can foreclose on you with no note. I don’t care what any people tell you.
Mike Rockwood: You’re at a significant disadvantage. The qualified written request does help level the playing field. And really that’s what RESPA was all about. The Real Estate Settlement Procedures Act was a HUD-sponsored or is a HUD-sponsored effort at consumer protection. And it is very, very important and what it did was clean up the whole settlement procedure. So, when a piece of property is transferred from one person to another, there are very strict guidelines on what needs to be disclosed, to whom, at what time, in what form, and who can be compensated at the various stages. And we have to have full disclosure on who is being compensated by whom.
Part of RESPA is Section 6 where it stipulates that lenders must respond in good faith to inquiries from borrowers. And that’s where this QWR fits in, and here’s where it fits in to loan modification. Some of the examples that we use in…
Ryan Rockwood: You are with…
Mike Rockwood: Qualified Written Request. Stick with me here. QWR, you know, Qualified Written Request. Get the acronyms down, Ryan, QWR. Some of the examples that we use in loan modifications are your hardship letter that is a qualified written request, your request for additional concessions. Those of you who are my clients, you know what that is. That’s where when we get our loan mod offer; we make a QWR for additional concessions, and then the request for itemization of fees. We always do that before we accept any loan modification. And then also a request that has become kind of popular in recent months and that is a request for identification of investor owner of loan. Those are always submitted as a QWR.
Now, you all know that the original company that you took the loan out from, the original maker of the note is very, very likely no longer the holder of the note. And so a lot of my clients are interested in understanding, in knowing first of all who the actual owner of the note now is because the notes were, number one, resold. And number two, many, many of them – I don’t know what percentage but a large percentage were securitized from especially those that were written between like the year 2002 and 2006. So, they were actually turned into securities, bundled thousands of them, bundled together and the cash flow resold as a security and mutual fund or to some other investor.
So, sometimes it’s very interesting to know who the owner of your note is. And sometimes it’s necessary if you’ve run into the road block where you’ve been told that your lender, your owner, the investor, the person who now controls your loan is not accepting modifications. So, then in that case you would want to be sure to make a request to know who that owner is and then you want to request proof that they don’t have to modify because we all know that anybody who has accepted any of the billions of TARP dollars that have been sent into the financial markets has to consider loan modifications.
So, here’s an example of a recent qualified written request that I submitted on behalf of one of my clients. And actually this one has become quite common. It’s addressed – it’s a letter addressed to the Customer Service Department at Washington Mutual. And the subject is Qualified Written Request under Section 6 of RESPA. Their loan number is there, the address is there, and the name of the borrower is there. And it says
“Dear WaMu folks, I am writing with a specific request for information about my loan. Today I was told by Mark, your customer service rep, that the investor that owns my loan is not accepting any loan modification applications.” Paragraph two. “I also understand that all lenders who accept TARP funds, who have accepted TARP funds, are required to consider modifications.” Paragraph three. “Please identify for me the investor who owns my loan. Further, please confirm to me that they are not accepting loan modifications. And lastly, please confirm that they have not accepted any TARP funds and are, therefore, exempt from the requirement to modify.” Last paragraph. “Please respond to this QWR as stipulated in RESPA Section 6. Kind personal regards, Mike Rockwood.”
Now, this is an example of how complete you want to be in your Qualified Written Request. You want to state the problem, state the actions that you have taken to date and state very clearly what action you expect them to take. And I got to tell you, if you ask them to take extraneous, extraordinary, incomprehensively complex tasks on your behalf, they’ll just refuse. And that is their right. So, don’t get to thinking, like a lot of the loan mod firms tell you, that you can get them to run around and do your bidding. They will respond to reasonable requests. But honestly so many of them, they just say, “No, not available. And if you really want that information, get your lawyer to contact our lawyer.”
So, the Qualified Written Request is a formal written request from you to your lender. They are accepting them in [Indiscernible] by fax and they are things like your hardship letter. The lenders are very much under close scrutiny and it’s carefully enforced that they respond in a certain fashion. They have to respond within 20 days with the confirmation that they have received your request. And they must respond within 60 days in a reasonably complete fashion.
Ryan Rockwood: Now the truth is, the Qualified Written Request, I think it’s something that it’s good that people know about. And they know that they’ve done if they need to do it. But I think it’s not something that most people need to use, right?
Mike Rockwood: Yes. Yes, that’s right.
Ryan Rockwood: Now, there is one Qualified Written Request and that is the itemization of fees, which is something that everyone should use. I mean, you know.
Mike Rockwood: Yes.
Ryan Rockwood: Right.
Mike Rockwood: Yes. I guess, Ryan, people don’t need to use it in the sense that they need to – unless they have, unless they feel or a forensic audit has revealed that they really want to contest the validity of the loan or the terms of the loan or some kind of TILA violation or Truth in Lending violation, or Real Estate Settlement Procedure Act violation, you really don’t need to use the Qualified Written Request. You are, in fact, using them when you submit a hardship letter and when you submit the request for additional concessions and the request for itemization of fees. So, all these things you’re already doing this as part of the 60-Minute Loan Modification process.
Ryan Rockwood: I think the thing to know about is that, everyone that’s doing a loan modification has to be slightly – I mean, it has to have knowledge that at least it exists, so that when you go to grandma’s house and cousin Ernie he tells you that if you just submitted a Qualified Written Request to get your house for free, you don’t totally feel like a dork. You know what I mean? It’s like, oh, shoot. I missed out on getting my house for free.
Mike Rockwood: Now here’s something that is a little caveat. When the dispute is about your payment, like let’s say you write in and you dispute the calculation of your payment or you’re disputing something about the actual calculation of amount billed, then the lender is precluded from reporting any derogatories to the credit bureaus for 60 days from the date that they receive it. And obviously, that 60 days has to do with the fact that they are supposed to resolve the issue in those 60 days. So, keep that in mind is if you are disputing something having to do with the payment that can postpone a late or to report to the credit bureaus and another ding on your FICO score.
Now, if you are actually contesting a TILA or RESPA violation, you should send this by certified mail and, of course, keep the receipt. But otherwise, you can send it to the Customer Service Department to their fax line. Do not send it with your mortgage payment or do not send it to the Loss Mitigation Department unless it’s part of your loan modification application.
Ryan Rockwood: Okay, we got a quick e-mail question here from Ray. He got a loan modification. The interest rate is great. But they’ve capitalized all the unpaid interests since July of ’08 and added to the principal loan amount from $633 now, $700, ouch, okay. They also want $12,000 by July 1st in order to do the loan mod. He called the lender and they said, $3,400 that [Indiscernible] [and that they would forgive us for – I don’t know if it’s a typo but it says, $270. They won’t give us a breakdown of the remaining $8,500 – no, I guess it isn’t the typo, is it? So, I don’t know what it’s for? But we can’t afford to pay it by July 1st. Okay, so right off the bat, this is a perfect opportunity for a Qualified Written Request, right? I mean, he says, he’s running to a road block and he needs to know what exactly that $8,500 is.
Mike Rockwood: Now, I thought you said right upfront that the $12,000 was interest though. And since July of ’08, that’s reasonable to expect. In fact, that’s pretty low interest for a year.
Ryan Rockwood: He says that they’d capitalized all the unpaid interest.
Mike Rockwood: Yes.
Ryan Rockwood: What he probably means is interest and principal, right?
Mike Rockwood: Yes, interest. You can’t really argue your way out of that interest. Any fees and penalties, often times we are – we can successfully argue our way out of. Number two, we very often successfully argue our way out of the lump sum payment because if you’ve only accumulated $12,000 in 12 months of missing your mortgage payment, then you don’t have a very big mortgage payment. This mortgage payment is less than $2,000 a month.
So, if they’re asking you to spend $12,000 to get reinstated, I would sure think you’d have a strong case to argue for more like for $3,000 or $4,000, like an additional $1,000 to $2,000 every month until you get caught up. That’s all I would argue it. And I would be pretty confident that you could do that. These lump sum payments are usually pretty easy to argue. But the only way to do it is to break it up into payments.
Now, you do want to be sure that you haven’t been charged any fees. So, don’t let that go. And a Qualified Written Request would be a good way to get that itemization. Just ask real clearly in no uncertain terms that you want to see an explanation for all the itemization and explanation for all the fees associated with your loan modification.
Ryan Rockwood: Actually we got a sample for Ray and anyone who’s listening to tonight’s call. If you want to see a sample of a Qualified Written Request, check it out. We’ve got one for you. Go to 60minuteloanmodification.com/downloads/qwr.doc. And that’s the answer [phonetic] for a Qualified Written Request documents. Okay. So, I’ll say that again. Go to www.60minuteloanmodification.com/downloads/qwr.doc. Okay.
Mike Rockwood: Ryan, what was the name of the guy who wrote in that question?
Ryan Rockwood: Ray.
Mike Rockwood: Ray. So, Ray, July 1st doesn’t give you a lot of time. So, you have to move really proactively on this one. And I’ve just worked a deal just like this and I’m just working on it today.
Ryan Rockwood: That’s pretty stressful.
Mike Rockwood: Yes. It’s very stressful. So, all I want to do is encourage you to be all over it. But if you’ve been late for a year, that means you’re willing to play hardball with the lender. So, now is not the time to lose your nerve. I think you can get away from that $12,000 payment, lump sum payment. But I don’t think you’re going to get away from paying it over time. And please e-mail us for help@60minuteloanmodification.com with any further questions on that one, Ray, because you got a tough three-week fight here.
Ray: Actually, this is Ray. Can you hear me?
Ryan Rockwood: Oh hi, Ray.
Mike Rockwood: Hi, Ray.
Ray: Hey, yes. Just send me the details of my question. The actual interest was like $60,000 that they’re capitalizing back into the loan.
Mike Rockwood: Oh, got you.
Ray: That’s $4,000 they said is – late charges like $3,000 something and then they can’t really tell me what the other $8,000.
Mike Rockwood: Oh, now that makes sense. Okay. Now, I understand your consternation.
Ryan Rockwood: More out of interest [phonetic].
Mike Rockwood: Yes. You know I bet the $8,000 gets gobbled up in lawyer’s fees. Did you go all the way to a Notice of Trustee Sale?
Ray: I don’t believe so.
Mike Rockwood: Okay. When you get late into the Notice of Default, they send it over to their lawyers to prepare for the Notice of Trustee Sale to get ready to foreclose on the property. And may I tell you, they run up the bills like as soon as they get it, it’s $3,000. And then it goes up from there. So, I’ll bet that’s what it is, but I’m so surprised they won’t tell you what it is.
Ray: They might have actually paid property taxes on there but, again, they’re not disclosing what all the fees are.
Mike Rockwood: Oh, cool. Well, if that’s the case and I’ve had them do that, you’re absolutely right. That’s a [Indiscernible] will do. So, that might be the case too. And in that case, you can hardly argue with that. You know, you got to pay that. Yes. I’ve successfully negotiated that over time. Usually, not more than like three or four payments but that’s what you should do, Ray, is try to get them to bust that 12 grand up into like three or four payments.
Ray: And again the late charges that they’re charging me like $3,500, is that customary?
Mike Rockwood: Yes, it is customary. Who’s the lender?
Ray: Wells Fargo.
Mike Rockwood: Yes. But you know what? Wells Fargo is one of those that you really could – just try it. Just argue, argue, argue that they’ve been somehow complacent in the – is that the right way to say that word?
Ryan Rockwood: Yes, I think so.
Mike Rockwood: In the whole deal and that they’ve dragged it out and that they weren’t fast on responding and couldn’t see their way clear to reduce those fees significantly or even weigh them because you’re just struggling to get back online with this loan.
Ryan Rockwood: The argument seems really strong. I mean, basically, the question is I can send you $3,000, $4,000 this month and we could get started again.
Mike Rockwood: Get started again. Yes.
Ryan Rockwood: Or I could send you nothing and we could go to foreclosure. But as we know the logic breaks down.
Mike Rockwood: Yes, that logic always doesn’t apply.
Ryan Rockwood: It doesn’t always work. So, but I think that’s what you got to try to do.
Mike Rockwood: Yes. Now, Ray, I would have said – six months ago, I would have said you would have had more luck negotiating that but it seems like, gosh, as they’ve gotten faster in streamline, they’ve also gotten a lot less flexible.
Ryan Rockwood: All right, so Ray, shoot us an e-mail if you have any further questions.
Ray: All right, thank you.
Ryan Rockwood: Sure thing. All right, who else can we help? Go ahead and just say your name and I’ll acknowledge you and we’ll grab your question. All right, well, let’s get back to some…
Mike Rockwood: We’ve got some of the online ones. You guys are a little bit shy today, I guess.
Ryan Rockwood: Yes, online stuff. And if you have any questions, you can always shoot them online, help@60minuteloanmodificaton.com. So, I’ll give you one more shot here. Say your names if you have a question. All right, well, maybe everyone is doing good or else maybe they’re so early on the loan modification, they don’t really have – no questions to ask yet. Hold on. I’m going to go mute it.
Mike Rockwood: Okay, now here is a question about repayment plans. And Ray, alluded to it too is that very often when you get quite late and are going back getting a loan modification after having missed several payments, the lender will ask to put you on a repayment plan in lieu of considering you for the loan modification. And this caller, person on the call, is asking if they can trust the bank to come through with the loan modification, if they accept the repayment plan.
And the answer to that is haven’t had the experience that they aren’t worthy of that trust. However, what I normally do is ask them to make a commitment of some sort. And usually the repayment plan gets you back on track. It’s a show of good faith. It’s usually less than your original payment and it’s usually slightly more than your modified payment will be. So, like let’s say you have a $4,500 monthly payment and you expect that your modification to probably be about a $3,200 payment, it’s not uncommon for them to ask you to make a $3,500 payment for three times before they will grant the loan modification request. And I generally tell folks because it seems like lately the lenders have been not willing to make any kind of commitment to the loan modification, but they just want to get you back in line, back at making payments.
We’ve been pretty successful just advising people to go ahead and accept those, get back on board with the lender and have been pretty successful, have been overwhelmingly successful than in getting loan modifications after that. So, that’s my advice with regards to repayment plans. Probably should take them.
Ryan Rockwood: One guy just wrote in, “Can I do a deed in lieu instead of a short sale or a loan mod? And deed in lieu, it seems like it’s kind of like an old fashion thing, is it?
Mike Rockwood: Well, we say that in California because our values have fallen so much. But in other parts of the country where there is some equity left in the home, in other words, where the first mortgage holder, in fact, can get all their equity out and also pay 10% or so foreclosing costs, then they’re willing to take a deed in lieu. But here in California, it’s almost non-existent because the home values have dropped so dramatically. But the lenders don’t want it. I mean, they literally don’t want your house and they certainly don’t want it without getting you to have all kinds of hurt in terms of dragging you through the FICO hell, you know.
Ryan Rockwood: I’ve heard that if they take a deed in lieu, then they have to take it to the court to reclaim it whereas the foreclosure process…
Mike Rockwood: You mean to get rid of the second?
Ryan Rockwood: Yes and all the encumbrances and to get it back in their name, get the person off.
Mike Rockwood: No. That’s what actually, that’s what the deed in lieu is you actually sign the deed over to them in lieu of forcing them to foreclose. So, it actually is a very sweet deal if you can take it. That’s one of those things. Yes, deed in lieu is sweet if you can take it, if you can get it.
Ryan Rockwood: If you want out.
Mike Rockwood: If you want out. Yes, it’s a sweet deal. It’s fast. It’s painless and it’s reported on your credit reports as paid as agreed. And so really the only damage to your FICO score is the payments that you miss in getting there.
Ryan Rockwood: You know what, whoever this is; I don’t have your name here on my screen. But I would really like to talk to you even for five minutes to run you through. And usually when people say that they say, “I want out,” and they say, you know, they’ve reached the frustration level. And if they have someone good working for them on their side, usually you can pull people back from the brink a little bit. Because I would highly, highly suggest to short sale. It requires zero work on your part.
Mike Rockwood: Zero cost.
Ryan Rockwood: And everything’s going to be settled versus a deed in lieu. I have heard several things about that including that whereas in a short sale, we negotiate with both lenders and you are actually forgiven that money and they’ll never come after you for it. They can’t. That, in fact, isn’t the case with the deed in lieu. Now, I’m not an expert in deed in lieu. That’s for sure because we don’t do them here. They’ll just refuse. But I have heard that there is some problem with…
Mike Rockwood: It’s messing us with the HELOCs and with recourse on the seconds. And you get private mortgage insurance there and that throws a whole another curve ball in the whole thing. So, it definitely is messier. It can be messier. But a lot of times people don’t realize how clean and easy short sales are these days. They’ve gotten to be very fast. They’ve gotten to be very easy to do and very easy to get approved, and we do short sales in all 50 states.
Ryan Rockwood: You know what the thing is though, if you have bad realtor working for you, I mean you might as well try to swim the English Channel with…
Mike Rockwood: Well, some people actually do that.
Ryan Rockwood: A millstone around your head.
Mike Rockwood: Some people.
Ryan Rockwood: In getting your short sales. So, for some people it is true hell.
Mike Rockwood: What we always recommend is that you have us run the short sale and we contract or get you to contract with a local realtor to find the buyer, but we run all the negotiations and we keep it on track, and we manage the whole thing so that it moves really quickly, cleanly. And as part of the settlement, because we’re so experienced at loan mods, the wording in the settlement is real clear about recourse that this is final payment and that the lender has no right to come after you for any further settlement.
Ryan Rockwood: You know the thing is that we were actually – I don’t think we ever talk about short sales much.
Mike Rockwood: We don’t much on this call.
Ryan Rockwood: Yes, the thing is that most people on these calls, I think want to keep their homes, so short sale. Like, you know, the loan mod idea was – because we were doing short sales long time before loan mod. It’s basically the same procedure with the different end result. And so most people that get on these calls, they’re looking for a way to stay in the home. Sometimes it’s not the best thing for them.
Mike Rockwood: Right.
Ryan Rockwood: And we can help each other to figure that out. So, give us a call. Shoot us an e-mail at Help. We got a question here. Jason asks, “What if lender says you do not qualify for any programs. What then?”
Mike Rockwood: Well, you got to push him for exactly why that is. Is it because of my loan? Is it because the investor who owns my loan is not granting?
Ryan Rockwood: See, this is a hard thing about – no one knows which loan mod company to trust, which lawyer to trust. And so they call the bank on their own. And how are you supposed to know? You’re like okay. Okay and primarily, we work with people who in fact do qualify for a loan modification but they’ve been turned down because of the way that the bank took their application because they weren’t able to manipulate their answers in the right way. You know what I’m saying?
Mike Rockwood: Right.
Ryan Rockwood: I mean we only work with people who obviously, if they got a loan mod, when they call they wouldn’t call us, right.
Mike Rockwood: Well, yes. Well, think about my first experience is, Ryan. Last summer when I started my loan modification, I got turned down, and turned, down, and turned down. Until I started to understand what the right answers were and what they were really looking for. So, there’s no reason for people to be doing that, go through and make all the mistakes I made, can learn from my mistakes, and get us to help you get your loan modification done right the first time.
Ryan Rockwood: So Jason, I think the thing is…
Mike Rockwood: Yes we need to find out why were you rejected Jason. Was it because of the loan?
Ryan Rockwood: Well, I mean, we don’t want to do tons of research into the past. What I would suggest is that, Jason, you buy the kit and go through the requirements. And if, in fact, it looks like you don’t qualify, return the kit and get a full refund or just e-mail Tracy at help@60minuteloanmodification.com. You could buy a 101 coaching call with my dad, Mike, for half an hour. It cost like nothing. And the thing is basically we – a guy called me the other day, and he’d been turned down.
And basically, we didn’t call his bank and find out exactly why but I said, “Okay, tell me what you told them.” And he told me…okay. And I said well, okay, I know why you were disqualified. So, it might be as simple as that, but don’t get me wrong. I mean if your income is in there, there’s something blocking you, you may just be SOL.
Mike Rockwood: Well, yes. Like today, one of my clients lost their home to foreclosure. And we had submitted their loan modification, and I told them from the start I am not optimistic about your opportunity to get this loan modification approved and here’s why. It’s your income. It’s your income. It’s your income. And I told him, and told him, and told him. And we worked on this thing for three months. And they had ample opportunity to get additional income during that time and didn’t need much more. He needed like $1,500 more per month. I mean there are some hurdles. You can’t jump unless you’re willing to make some changes. So, there’s the income hurdle. You know, there’s the debt-to-income ratio hurdle. If you’ve just got too much credit card debt, you just can’t expect them to continue to extend that. So, you have to get creative about paying down some of that debt or getting your income up high enough. We can work with you Jason and get an answer for you.
Ryan Rockwood: I mean, the tough thing is, Jason, needs a friend. Jason needs a friend/advocate.
Mike Rockwood: Yes.
Ryan Rockwood: Okay. That’s why you can’t rely – I mean that’s why when you get computer help, I don’t know, you can’t – you don’t call the local high school student. You have to call professional that you pay because you have to demand a certain level of – you know they’re going to show up, they’re going to answer your question, they’re going to be knowledgeable. So, long answer short; you got to get some good advice. You got to have someone review that for you that is in your corner. Okay. Quick question here, Jessica has 6.5 fixed. Can she modify?
Mike Rockwood: Yes, absolutely, 6.5 fixed is now a lousy loan.
Ryan Rockwood: Really?
Mike Rockwood: Yes. Isn’t that funny? Just two years later and 6.5 is a lousy loan. 4.5 is a real sweet loan these days. And really, we’ve been successful of anything over 6% fixed. Now don’t think that you’re going to necessarily get a 30-year fixed at 4%. If you have a documentable hardship and if you’re able to qualify to make the payments, you’re very likely to be able to get like a 4.5 for at least three years and then slowly going back to the 6.5 or going back to Fannie Mae Freddie Mac which is right about 5.5 an hour or something like that.
Ryan Rockwood: Yes. You know, maybe you can answer my question. I ran into a client earlier this week and I know the answer but I just felt like I couldn’t articulate it very well. Here’s the problem. He says, he’s calling up and he sees the Obama plan. And he says, “Well, why wouldn’t I qualify for a loan modification of 31% of my income?” And you know I didn’t really know how to tell him that it kind of depends on – what I want to try to convey to him is it kind of depends on your mortgage. Like if you’re close to 31%, they’re going to try to get you there, right? But if your payment is $10,000 a month and your income is $2,000 a month, I’m sorry; they do not give a darn with 30% of your payment or even twice that or three times that. It just doesn’t matter if 30% of your income is $2,000 and $3,000. How do people think about that? You know, because it is confusing.
Mike Rockwood: I think that a good way to explain it is that the whole process is cascading.
Ryan Rockwood: Cool.
Mike Rockwood: By that, I mean, you pass one gate after another or one waterfall after another. And it is actually a mathematical term and I’m sure not a mathematician. But cascading means that you go on to the next formula if and only if you pass the first formula. And whether or not you have a hardship, and whether or not you have a mortgage that is a target for modification, and whether or not you have the income to qualify and there are several stipulations in your income. One of them is enough income. Number two is not too much income. And number three is the correct debt-to-income ratio and housing-to-income ratio.
So, it’s a little bit a complex calculation, maybe seven to 10 factors. And so you can’t just go to the end factor and say, “I want that,” because there maybe any of those interim factors that bump you out. Well, I said that pretty well. Did we record that? I hope so.
Ryan Rockwood: Hey, do you ask how long an average or loan modification she’s taking? She’s hearing nightmares about of long delays.
Mike Rockwood: Yes, it has gotten longer in the last month. I would say average now is if you are late on your mortgage, the average is about four to five weeks, which isn’t too bad. If you’re not late on your mortgage, the answer is it may never happen. It’s so frustrating.
Ryan Rockwood: You know the thing is also, it’s an interesting part of this question that I kind of pick up on. I’m still hearing nightmares about long delays. Okay, another thing to consider is unless you’re quite a nervous Nelly, who cares if you have long delays? Most people stop paying their mortgage.
Mike Rockwood: She probably hasn’t. You’re exactly right. But people that are nervous are the ones making a high payment.
Ryan Rockwood: Okay. But you know months came past. You can adopt this attitude and just let it roll.
Mike Rockwood: It’s so true. Yes.
Ryan Rockwood: As long as you’re not – you just have to make sure they’re not moving you to an NOD. They’re not moving you to a Notice of Trustee Sale and you’re not going to lose your house, stuff like that. But hey, it’s no biggie.
Mike Rockwood: Yes. If you’re playing hardball with them and you’re not making payments, then let it take two or three months.
Ryan Rockwood: Yes. And save that money possibly consider spending, paying down credit cards.
Mike Rockwood: Yes.
Ryan Rockwood: It’s our best advice for that. Okay. I think it’s time to wrap it up. What do you think?
Mike Rockwood: Yes.
Ryan Rockwood: Okay. Thank you so much guys for joining us tonight. I think it was a really good call. And I really hope that you guys got a lot out of it. Now, before you check out for the evening and call it a day, I’d really like to encourage you to get out a calculator and do some math here. If you don’t have a calculator, just write this down and take out a letter.
But first, figure out how much money your family would save if you whacked your mortgage down by $300, $500, even $800 a month. How much would you save in a year, multiply that times five, how about that be five years. Now over the life of the loan, multiply it by 30 to 25, however you got left.
Mike Rockwood: It’s just huge.
Ryan Rockwood: Yes. And that’s not taking into account compound interest, right?
Mike Rockwood: Yes.
Ryan Rockwood: So I don’t know, double, triple, quadruplet, because interest is a crazy thing. Deep down, most of us are hiding some pretty fierce anger about the whole housing crisis. We’re scrambling to try to make payments on houses that are worth a lot less than what we owe. The economy has gone to crap and every night the news sounds like things are just going to get worst.
So, with that in mind, the real question is what are you going to do about it? There are already angry mods [phonetic] that people whining and complaining and waiting for someone to fix this. But it’s our experience that while big banks and automakers and other people will get the government’s ear. We’re the one paying the taxes. No one’s going to be coming down the block in an ice cream truck [Indiscernible] at loan modification. So, you got to take some action. If you want to keep your home, if it makes sense for at least the next 12 months, then don’t wait another day. That’s a good point because I mean don’t over think it. If you’re doing a math and you’re like, “Oh, it will only save me $30,000 and then I’ll still have under equity in the house.”
Listen, if it’s got to save you – if you’re going to keep doing your home and you pay less for the next two years and then you could still have all these wonderful options of deed in lieu and foreclosure and all that kind of short sale, then kick that problem down the road. I’m sure you’ve got better things to worry about in your life.
So order our 60-Minute Loan Modification kit. Take an hour of your life. Get your paperwork together. And then we’ll give you a call and map out a strategic plan. As always, we’re huge advocates of Do-It-Yourself Loan Modification. But that does not mean you should do it alone. We’re here to help.
We spend most of the day on the phone. So, e-mail is the quickest way to get a fast response to any and all questions. Please e-mail us at help@60minuteloanmodification.com. Thanks for joining us guys. We’ll see you next Tuesday, or clients, we’ll see you on Thursday for the advance call.
Mike Rockwood: Thanks everybody.