Ryan Rockwood: Welcome to the call, everyone.  I just hit record.  So, I’ll just say welcome to the call.  Tonight’s call is the Foreclosure Doctor Teleconference.  Anyway, I’ll just pick up where I left off.  But anyway, call us if you want to pre-qualify for that.  We’ll spend a few minutes on the phone.  Basically, what we’re doing for the vast majority of people is putting them on an interest list, a short list because this is a totally untested program.  The question is still out there.  Will a hedge fund save America?  And the jury is still out.  We sure hope so because it’s a really good solution.  And as a nongovernmental solution, it might actually work.

So anyway, we are looking for people, mostly people that in order to get involved in this, you know, there is like an $800 upfront fee.  And I shouldn’t say – it’s not actually upfront, it’s actually when you pay for the appraisal and some other deliverables.  But the point is this is not a kind of solution for the single mother of eight kids that calls us every week and wants a free kit and also wonders if the loan mod’s right for them and maybe they want to do this thing too.  This is not for you.  This is for folks who have a decent size of mortgage, haven’t paid in a while, have some money in the bank and can lose $800 or whatever without like throwing a huge hissy fit.  It means it’s really an educated gamble at this point and that’s why it’s kind of like adults only.  Anyway, you have to have enough income to qualify for the new mortgage, that’s the third requirement and this is totally documentable income, right?  It’s no stated, no nothing, whatever.

Anyway, another announcement.  Legal loan mods continue to increase in frequency.  Forensic loan audits can be a great way to move over the frontline in a loan mod frenzy.  Go to 60minuteloanmodification.com for more info.  A lot of people have asked me, “Ryan, who do you recommend for a forensic loan auditing company?”  And frankly, as far as I know we’re still between recommendations, correct?

Mike Rockwood: Yes, you know it’s like a lot of these service companies that we recommend.  Unfortunately, we’ll recommend them for a time because one of two of our clients will say that they really had a good experience with them or we may have a good experience with them.  But a lot of these outfits, service industries like this get absolutely inundated and get swamped and then a key customer service person or a key technology person or a key legal person leaves the company for whatever reason, and then they start to wobble.  So, what we always recommend is that you ask us for a latest recommendation on any of these service providers because it seems to change every six months.  We’ll recommend one and then we’ll start to get some bad reports, and we’ll have to move on to a new recommendation.

Ryan Rockwood: Okay, also the Credit Card Cure is a program that grew out of my little 20-page booklet that came free with the kit.  It’s a story of how to get out of credit card debt yourself without paying someone, without going through years of restructuring and bankruptcy and credit card consolidation and other additional agony.  It’s about …

Mike Rockwood: In stock.

Ryan Rockwood: Well, not quite but it is really, really getting there.

Mike Rockwood: This one’s in stock.

Ryan Rockwood: And it’s a book, it’s a CD, it’s a website membership.  It’s designed to very, very inexpensively walk you through credit card debt settlement yourself.  I don’t know if you’ve ever done any Internet searching in this category, but it is a freeing snake pit out there of people that once you to start making payments to them and they’re going to make some payments through credit card companies.  That’s kind of a typical MO or something like that, you know.  And it turns out there’s a better way and I’ll walk you through the way to do that.

The way to express it – because we’re about to re-launch the site, we have closed up membership.  You can’t sign up anymore.  But if you’re a current client or even if you’re watching this, you can always shoot me an e-mail and ask for the half off.  It’s going – all the prices are going to double when it comes out.  But if you get on the interest list, go to your e-mail.  If you click on that link that I sent you, my database will tag you and tell me that you clicked on it and then I’ll be able to extend that offer to you later on, okay.  So, that’s a way to do it.  Actually, don’t call me.  Don’t e-mail me.  Click on that link, that’s the best way to do it, okay?

Also, number four, schedule a time with Mike on the phone.  Part of the kit that’s offered below on this screen is – one of the most valuable time is actually 30 minutes of Mike’s time on the phone.  I’m actually there too but mostly I just sit and check my e-mail.  No, I’m just kidding.

Mike Rockwood: Is that what you’ve been doing over there?

Ryan Rockwood: I’m just kidding.  But it is very handy.  He actually goes through the different situations with you on the phone, your particular situation and so on, it gets you ready.

Okay, brief announcement.  We’re not lawyers or CPA tax advisers.  Do not take our advice as legal or tax advise but just as reports of what we’ve learned and our clients have learned in the foreclosure workout department, okay.  Tonight’s topic is Strategies for Success:  Ways to Handle a Notice of Default.  What are the things they’re doing?

Also, we have a special promotion tonight.  I don’t know if anyone knows or cares, but basically I sent out an e-mail and in that e-mail, we offer the kit.  Not only is it as risk free as it always has been but if you order through that order form, you actually get 30 days without getting charged anything.  So, it’s super zero risk.  Pretty soon, we’re just going to pay you to allow us to come and live in your home.

Mike Rockwood: Take these books off our hands, please.

Ryan Rockwood: And do your loan mods for you.  We’re just going to come to your home and, anyway, but still we find there’s a lot of people that are hesitating.  They’re always hesitating and fearful.  I’m fearful, I’m fearful, I’m fearful, you know, and so our challenge is try to overcome that fear and part of that is by allowing people to try to get to know us through these sort of sessions, providing a lot of great info, turning down a lot of people at the get go, telling them the product’s not for you, and other ways that we can do that to build trust and help people understand why they should get the product from us and move forward.  Anyway, also – so you got that special link in your e-mail.  If you didn’t get that e-mail, you can e-mail me at ryan@60minuteloanmodification.com and ask for that special offer.

Also, in tonight’s class in about a special unannounced time but not long, probably like in the next 15 minutes, I’m going to announce – we’re going to give away a kit.  And actually we’ve never even done that.  It’s pretty simple, right?  Give away a kit.  Total kit, it’s not like a dummy down version at all.  You get the conference call with Mike, you get the CDs, you get the forms, you get the recordings of the audio.

Mike Rockwood: Did you tell people about that in the e-mail?

Ryan Rockwood: Yes.

Mike Rockwood: Oh, smart.

Ryan Rockwood: Yes.  So, hopefully people will get excited about that.  I’ll tell you how you get it.  Basically, you have to send me an e-mail at ryan@60minuteloanmodification.com and I’m going to announce a special word to put in the subject line to qualify you in a little while.

Mike Rockwood: People are going to be paying attention tonight.  Hello.

Ryan Rockwood: Don’t even look away.

Mike Rockwood: Look away from that show.

Ryan Rockwood: So, anyway, welcome to the show, everyone.  We’re going to jump right into it.  These calls are designed to be fun and painless.  And anyway, let’s get to it.

Mike Rockwood: Okay, tonight we are talking to you from a booklet that if you are a member or if you are a client, you have purchased from us a kit and in the kit you got this book along with a bunch of other good material.  This is the Notice of Default Handbook and in this Notice of Default Handbook, we talk about a number of things that really equip people to handle or to react well intelligently when they get a notice of default.

And one of the sections, Chapter 5, is all about strategy.  And people really like this chapter because it tells stories about how people are actually responding to the Notice of Default because when you get a Notice of Default, it can be kind of discouraging, embarrassing.

Ryan Rockwood: Yes, it’s one of those things that like, it seems like everyone knows, you know.

Mike Rockwood: Yes.

Ryan Rockwood: I guess it is public records.  So, a lot of people know.

Mike Rockwood: Yes, a lot of people do know.

Ryan Rockwood: But honestly, no one you really care about knows, honestly.

Mike Rockwood: Right.  Yes, and nobody who cares about it should you care about.

Ryan Rockwood: Yes.

Mike Rockwood: So, what people really like about this section is it’s a place where I talk about the strategies that people have put together because they’ve really kind of, in my mind, I can always identify.  They’ve always grouped into with the – into and attitude that has a particular set of characteristics that usually has a lot to do with their personalities.  And so what I’d like to do this evening is just go briefly through the five strategies that I see people using and highlight some of the factors of each because I think some of you might finds some comfort in that, number one. And number two, it might remind you to go dust off that book, look it up, and maybe it would have some good wisdom and some good insights for you as to how other people are doing things and how maybe you can be more effective in your own strategy for workout.

Now, remember any overarching strategy for working out your foreclosure has to deal with taxes, has to deal with recourse, and it has to also deal effectively with your own aptitude or attitude toward the stress of the workout process.  Because if you really have no attitude, no aptitude, no tolerance for stress or for being in default and if you really want to just write a check to just stop that pain, well, you really have to know that, admit that, acknowledge that in yourself and probably do that.

So, you have to be sure to get resolution to those issues.  Get with the lawyer and find out real clearly if your loan in your state, if it gives your lender recourse.  Ask them about your situation whether or not you will have any task liabilities.  Ask your CPA, ask your tax advisor.  It’s cut and dried, it’s very clear. Most people won’t, but you better talk to your tax advisors to make sure.

But let’s talk strategy.  After you get over those three things, most people kind of – they cop an attitude and they craft a strategy based on what they want to try to accomplish.  And the first one, you know what it is?  It’s run.  And as strange as it sounds, it’s the right strategy for quite a few people.  These are people who just don’t have any equity in the home, maybe never even put a down payment in the home, are terribly upside down, don’t really want to live in the neighborhood anyways, maybe already had relationship issues, you know.  Maybe they’re just finishing a divorce or have broken up with a domestic partner or something, but at any rate sometimes run is a great strategy.  And what I mean by run is just, you know literally walk away.  Mail the keys in.

Now, some people feel like running is appropriate strategy because they’re not going to be living in a house that they’re not paying for.  So, there are some people who use this strategy on very high moral principles.  So, you know, you catch your drift a little bit of the different kinds of approaches.  Some people approach or use the same strategy for wildly different reasons.  Some are so terribly frustrated that they just want out.  You know, they’ve struggled with the payments for years.  They’ve seen the value declined.  They’re just so angry and so afraid that they just want to leave the city, leave the town.  So, there are a lot of reasons why it might be right.  For many reasons, it’s not a good strategy.

The next one I want to talk to you about is cash – what I call Cash Max.  And this is one for people who kind of get a little bit bent out of shape about having lost all of their equity, all of their down payment.  Very often, it happens when people put in a big down payment and then see the value completely disappear, they get a little bit pissed off.  And then when the bank won’t work with them very effectively to lower their payments or reduce the principal, they kind of get really pissed off, and so they adapt an attitude called Cash Max.

Ryan Rockwood: You know being angry is fine.  But you know what often, it’s not just anger.  It’s more like a paralysis, anger paralysis, something like that.  That’s horrible.  Not only is it horrible, it’s pathetic.  It is pathetic and so if that’s you …

Mike Rockwood: Yes, anger is an emotion that should drive you to action.  And you want to make sure that the action is positive.

Ryan Rockwood: Yes, hopefully the action doesn’t involve like, yes, going postal or whatever, you know.

Mike Rockwood: Right.  No physical ninja moves, just foreclosure ninja moves.  So, in the book, I tell in each of these descriptions of strategies, I tell a story about a different family that used this strategy or is currently using it.  And this one is kind of fun.  It’s about Mina who was so proud of her Rolling Hills States Condominium.  She put all of her savings into it.  She’s a young lady, so I mean, it’s not like she had millions but tens of thousands of dollars of her savings, she put into it, lost it all.  And then when the bank wouldn’t work with her, and last minute changed their mind in terms of working with her on a modification, she got kind of angry and she used – she stopped paying immediately and she used all kinds of delay tactics to stay in the home for really quite a long time.

I think, in fact, she recouped $19,600 using this Cash Max strategy based on what she would have had to pay for rent if she moved into a rental unit in the same condo complex.  Her FICO score did go all the way down to 420.  And later, after she moved out of her condo, she moved into her parents in a not very snooty part of the South Bay, but her parents were kind of smug about the fact that they, at least, had paid for their home.  So, Cash Max is another strategy that some people are employing.  In their minds, they kind of think it’s justified because they lost so much on their down payment, they maximize the amount before they get thrown out of the house.

Another one is called Hide and Seek, which would I call Hide and Seek.  And this one, the story here is actually kind of funny because Jeremy and Tacaco [phonetic] wanted to continue living in this home.  That was their primary driver.  They wanted to stay in this home for a long time but they couldn’t afford it.  So, they employed a bunch of different delay tactics.  I mean, in fact they employed like five of them over a period of 24 months.  And they actually stayed in the home for 24 months.  They started and stopped five different types of workouts with their lenders.

And it’s kind of a good story because it – I mean, ultimately it ends up pretty positively.  They couldn’t stay in a place nearly as close to Jeremy’s home.  They love living close to his work.  So, they couldn’t stay in a place nearly as close to his work.  But they did end up with a good home some 30 minutes away.  But they were able to, through a series of starting and then failing and restarting processes, stay in the home for two years.

The next one is kind of fun to talk about.  It’s called the Charlton Heston.  And this is primarily for rental property where people determine that, you know what, come hell or high water, I’m going to hang on to this property.  And I guess, actually the story that I tell in the book is not actually about a rental home.  It’s about a young couple in Hermosa Beach who decided that there was just no way they were losing this home even though it had declined significantly in value.  And even though today, they’re still significantly upside down.  But they decided, they love this home, they love where it was, they had grown up actually near the beach in the South Bay.  They wanted to keep the home.

And so in this section, you’ll learn about how they went to extraordinary measures.  They borrowed from relatives.  They borrowed from one of the government-guaranteed partial claims.  They qualified for a partial claim from FHA.  So, they borrowed a partial claim on the insurance policy of FHA.  It’s a great story, actually, and it took them over a year.  But finally, they were able to reduce their total payment by $1,400 a month and they have kept their home.

And then another one, the last strategy is called Cherry Picking and that’s where people who, not only have their own home but also several rental properties, kind of pick and choose the properties that they want to keep, and they employ different workout strategies for each one.  So, if you know ultimately that the cash flow on this one isn’t good, its location in the city isn’t good, so its prospects for appreciation long term aren’t good, then you might decide that this one is going to be short sold.  On another one, although it’s – currently negative cash flow might be in a good part of town or right near a university or a big employer, you might see good long-term prospects.  Your strategy there might be to modify the loan or to go – to buy into one of the principal reduction programs like the Homeowner Mortgage Restructuring Product that Ryan talked about.

So, that’s what we call Cherry Picking and that is picking different strategies for different homes.  So, you manage like a portfolio of foreclosure workouts, okay?  So, once again dust off that book that you received some time ago or get one by buying the kit, order one.  It’s the Notice of Default Handbook.  And in it, we talk about all the strategies you can employ and then Chapter 5 gives you examples of how people have employed it.  I hope that’s helpful.

Ryan Rockwood: All right, let’s do it.  If you’re listening right now, we’re about to take some questions.  We’ll take some on the phone first because that one is also like it kind of works. And then we’ll also answer questions by e-mail and text.

Mike Rockwood: By the way, I already got a half of dozen of them here by e-mail.

Ryan Rockwood: Okay, anyway – oh, what did I want to say?  Well, let’s just do the contest too.  If you’re watching the show and you like a free copy of the kit and you want to enter the contest, e-mail me, ryan@60minuteloanmodification.com and this is today only.  Only if you don’t have a kit or you haven’t purchased one.  And what should we say in the subject line?  Free Kit, Free Kit.  Okay, that’s how you do it, all right.  So, enter, enter, and also take me up on the offer to – and whether we’re choosing that random.

Mike Rockwood: Choosing at random?  Don’t you have – doesn’t have to be the first one written in?  Oh, you’re going to just to, like, put them on slips and pick one?

Ryan Rockwood: Well, no because I’m thinking that people …

Mike Rockwood: You’re going to get quite a few.

Ryan Rockwood: Yes.  Well, let’s just say randomly.

Mike Rockwood: Okay, Ryan will figure it out.

Ryan Rockwood: We know who we’ll be choosing at random.

Mike Rockwood: I’ll make sure it’s fair.

Ryan Rockwood: All right.

Mike Rockwood: Hey, let me – can I go ahead and take some of these questions?  Somebody here has pretty good.

Ryan Rockwood: No, let me see if we’ve got phone callers first because I’ll be done with that.

Mike Rockwood: Okay.

Ryan Rockwood: Hi, is anyone on the phone, anyone have a question?  Anyone on the phone have a question?

Mike Rockwood: Our teleconference people are generally pretty shy.

Ryan Rockwood: No, the people that tune in on the phone, they have questions, usually.  Anyone on the phone have a question, last chance?

Female Speaker: Hello.

Ryan Rockwood: Hi.  Hi, go ahead.

Female Speaker: Hi.  Can you explain the hedge fund [Indiscernible] again?  I didn’t hear from [Indiscernible].

Ryan Rockwood: Sure.  What was the question?

Female Speaker: It’s about buying down [Indiscernible] hedge fund stuff.  Can you explain that again please?

Mike Rockwood: The Homer.

Ryan Rockwood: Yes, absolutely.  Absolutely.  Anyone else have a question?  Okay.  Sounds like grace had a question.  I’ll repeat it because I know the audio is funky.  But the idea was – what’s the deal with the hedge fund?  And I forget that some people haven’t been with us every single week.  But here’s the idea.  If you’re in a situation, like almost 30% of today’s homeowners, a huge chunk of the equity in your home, or there really is no equity, we call it negative equity.  It’s amount that you owe on the home that …

Mike Rockwood: That just ain’t there.

Ryan Rockwood: Yes.  That your home isn’t worth, okay?  It’s the amount underwater.  So, let’s give a really super simple example.  Let’s say you owe $100,000 on your home and your home is worth $80,000.  And in that situation, your only option to get rid of that is a short sale which is …

Mike Rockwood: Or just let it go to foreclosure.

Ryan Rockwood: Yes.  Both are extremely unattractive to people because people want to keep living in their homes.  So, the other option that is cropping up that hedge funds are coming in.  Hedge funds is just a fancy name where for investors with money.

Mike Rockwood: Technically, they’re not hedge funds.  Technically, they’re private banks, right?  They’re private lenders.  And they may also have hedge funds.

Ryan Rockwood: Oh, and they sell the hedge funds, is that what it is?  Okay.

Mike Rockwood: Yes.

Ryan Rockwood: It says the hedge funds are [Indiscernible].

Mike Rockwood: So, it’s hard money lenders.  Yes.

Ryan Rockwood: Okay.  So, what happens, in other words is if that guy – what these guys do is they go to the bank.  They didn’t say they’d get $100 million worth of homes, and they say all of these homes, I will buy all of these notes for you but they’re not worth – they’re worth this much and so I’ll buy them for a little bit less.  And so the discount on the note is incredible.  The discount on the amount that they get on each individual home is decent.  And so that’s how it goes.  So, in order to qualify for this program, if you have the e-mail that I sent you, check on the link that says I’m interested in Homeowner Mortgage Restructuring.  That will alert my database.  Now, if you didn’t get that e-mail, go ahead and just e-mail me and request it at ryan@60minuteloanmodification.com.

Here’s how it works.  In nearly every single program there is, unfortunately, do risk some money.  And the money you risk is about $800 for the first mortgage, $500 for additional mortgages that you want to get rid of.  And that’s obviously, it’s a huge – obviously if these folks can deliver, the value is incredible.  I mean, they could charge 90 times that, and people would be lining up.  And people are lining up and they haven’t even done it yet.  So, what happens then is if you qualify according to these guidelines that I’ve listed earlier and that is you live in a certain state, you’re underwater by enough, and you are in default …

Mike Rockwood: And you have income.

Ryan Rockwood: And you have income then you qualify.  They’ll bring it to the pool, they’ll try to negotiate.  Now, what you get for your participation is a new note at a rather high interest rate by today’s standards.  It’s like 8%.  However, that really doesn’t matter to most people because they’ve gotten rid of – usually, they’re not getting rid of $20,000 worth of mortgage.  They’re getting rid of, you know, $500,000 in some cases.  But for the majority, it’s probably like $100 or $200 worth of stuff forgiven.  So, they get that forgiven, they get a slightly higher mortgage.  Their payment actually still – it diminishes dramatically because they’re paying on so much less and they get a new mortgage for exact – well, they get – they are now responsible for whatever the home has appraised for at today’s market rate.

Mike Rockwood: Right.

Ryan Rockwood: So, if it’s worth $80,000, you’re responsible for $80,000.  You can sell the home at $80,000.  You can refinance immediately, you can do whatever you want.  So, it is a really good deal.  And the way to that is you can think of our participation in that, much like a mortgage broker.  This actually isn’t a mortgage.  It’s not regulated by the Department of Real Estate or anything like that.  But in other words, you know, they need front-end sales people to bring this product to the public.  So, that’s kind of our participation.  It is just informing, pre-qualifying and selling.  And that’s our role at, all right?

Mike Rockwood: Can I go ahead and take a couple of these?

Ryan Rockwood: Yes, do it.

Mike Rockwood: Okay, John says, “If Aurora,” who is apparently the servicer of his mortgage, “will let our home be short sold for $240,000, why won’t they discount our mortgage to that amount and let us stay here?”  John, that’s a million-dollar question.  And there is no really good answer to it because it is perfectly logical.  The only reason that I can think of or that most people accept for the reason that banks aren’t doing that is because of the sheer magnitude of the problem.  If they had to – see, they know in fact that 80% or more of homeowners will just tolerate intolerable situations with regards to the equity.  In other words, they’ll just keep paying and they just keep – they just keep on keeping on in status quo.

Ryan Rockwood: If you think that’s insane and that the banks should not do that, ask yourself, are you paying still?

Mike Rockwood: Yes.

Ryan Rockwood: The vast majority of people get all hot and bothered and they shouldn’t do that.  And then you ask them, are you still paying?  Well, yes.  I got a bill in the mail.  You know what I mean?

Mike Rockwood: It’s programmed into us.

Ryan Rockwood: So, you can’t have it both ways.

Mike Rockwood: So, John, you’ve asked a question that makes a ton of logical sense.  A lot of people have proposed it from the start.  It is in the neighborhood of $4 trillion or more, number one.  And number two, it would be so widespread.  The administration of it would be crazily out of control.  So, what a lot of people are doing, John, is getting out of line and try and figure out how to get that resolution without having to lose their home.

And the program that Ryan referred to, the Homeowner Mortgage Restructuring, is one way the private sector is trying to enable that to happen.  They’re trying to get that principal right down by striking a deal, buying a toxic asset from the bank and then repackaging it for the homeowner.  So, you will be seeing more and more opportunities to get principal reduction.  But what you’re talking about there, just flat out logic, just flat out won’t happen.  That one can’t happen.

Linda asks, “Without my boyfriend’s income, I don’t qualify for a modification.  Can I just add it to the application form?  Do I need to explain anything?”  Linda, you do not.  All you need to do, and yes you can, just add it to the application.  Now, so you add it as a line item in your income and then you provide proof of it just like your own income.  Now, here’s the thing to think about Linda, is you only need to include as much of your boyfriend’s income as you need to hit the right ratio target.  In other words, let’s just make up numbers and say that your boyfriend earns $4,000 a month.  But you only need $2,000 of additional gross income every month in order to get your ratios correct.  And I’m referring to your front and back-end debt-to-income ratios.

So, once you figured out what the number is that you need there then take that much of your boyfriend’s income.  Don’t take it all unless you need it all.  But all you need to do is substantiate it just like you do your own.  Check stubs, whatever.  Just be sure you calculate it correctly and make sure you just have it displayed and document it really, really clearly just like your own income.

Okay, Chris asks, “How long will it take before the bank responds or our short payoff request?  We got a cash offer and sent the whole packet to the bank yesterday.  What timeframe are we facing now?”  Chris, here’s the deal.  It should, if everything is perfect, it should take less than 30 days for them to approve the short sale.  They should actually start talking to you about it in about two weeks.  In about two weeks, if everything went really well, they will order an evaluation of the value of your home, which they call a BPO, a Broker Price Opinion.  But let me just give you this example, Chris.  Sometimes that happens.  I got to admit that’s very rare.  It’s probably 10% of the time.

Most of the time, it takes at least 30 days before you hear from them.  Sometimes horrendous things happen.  In fact, I’m working on one, still every single day, in which we started on November 15th and it’s now May 4th.  So, that’s more than six months ago we started working on this short sale.  Now, that’s bad enough.  But here’s the ringer.  It’s a cash offer from a very well-qualified buyer and the price is reasonable.  So, this one just got totally hosed up and totally caught up in a terrible back and forth of the paperwork between Bank of America and several subcontractors that they hire to do some of these paperwork for them.  So, Chris, it could take a month.  It could take six months.

Ryan Rockwood: I’ve got a question here from Kevin.  He asks, “I’ve got a second mortgage company.”  Well first of all, he says the first mortgage has offered a loan mod, so they’re playing ball.  The second won’t play ball.  They want to take the – they say they want to just take the write off and move into recovery.  And so …

Mike Rockwood: It’s surprising.

Ryan Rockwood: Yes.  It’s super weird.  And he says they’d like to write off the debt 1099, we move to recovery.  What does move to recovery part mean?  Will they be able to lien other property?

Mike Rockwood: Very good.

Ryan Rockwood: And I wrote back to him, I said it depends.  What state is the home in?  When did you take out the loan?  Okay.

Mike Rockwood: Yes.

Ryan Rockwood: In this kind of situation, a chat with a real estate lawyer, you know, an hour with a real estate lawyer with your actual mortgage documents in hand – wait, did I say that right?  Real estate lawyer, is that what I said?

Mike Rockwood: Yes.

Ryan Rockwood: Super handy.  You got to get clarification on do they have what’s called recourse?  That’s what you want to know.  If they don’t …

Mike Rockwood: Yes, if they don’t, screw them.

Ryan Rockwood: Dust the – you know, brush your shoulders off and move on.

Mike Rockwood: But if they do, then you want to evaluate your own vulnerability.  Do you have a stash of cash that they could take if they took you to court?  If not, then you may also still not be very vulnerable.  Because so what if they get a judgment against you if they can’t collect it?  So, you know, it’s kind of a multifaceted answer.  But move to recovery means that they want to mix it up with you about collections. They want to take it to collections.  And the only reason I can think of that they want to do that is they see you have a big bunch of assets sitting somewhere that they’re just going to attach it to and whether it’s garnishment, that may be a big wages or a lien, maybe you own some other properties with good equity.

Ryan Rockwood: Yes, I mean, first of all they can’t just lien another property.  They have to get a judgment against you and then they could lien anything you have breathed on.  And then – not really.  But they could just – what is it – garnish your wages.

Mike Rockwood: Levy.  Yes.  They garnish they wages or they can levy.  If you have a big bank account, they can just levy it and then bank will give them the money.

Ryan Rockwood: I wonder if this guy that’s writing in is really wealthy.  You know, maybe …

Mike Rockwood: I’m kind of suspecting it, yes.

Ryan Rockwood: That’s kind of the only thing that I can think of.

Mike Rockwood: Yes.

Ryan Rockwood: Because typically a second mortgage is going to be like $100,000, at the most $300,000, you know somewhere in there.  And then you start to get a $50,000 legal cost involved and stuff [Indiscernible], you come pretty marginal.  So, anyway, I would – first of all it’s very likely it’s just a tactic on their part.  But maybe it’s not, you know, we say second mortgage and we always think none – well, we think – we also think no equity position.

Mike Rockwood: Right.  They could have equity.

Ryan Rockwood: I suppose they could just want have …

Mike Rockwood: Foreclosed.

Ryan Rockwood: Foreclosed right off the debt.  Well, they wouldn’t say they want to write it off 1099 and move to recovery.  You know, if they’re bananas, let them be bananas.  That’s all I can say.  You can’t talk people down off, that’s just they don’t want to come on there.

Mike Rockwood: Yes, if you’re bulletproof from a legal standpoint, mix it up with them.  You know, call there bluff.

Okay, Rachel wrote in and asks, “If I lose my job,” she says, “rumors are abounding at work.  Will it wreck my chances of getting a modification on my loan?  I followed the kit and sent the application for Making Homes Affordable Modification about six weeks ago.”  Congratulations, Rachel, that you qualified for a Making Homes Affordable and six weeks ago means it’s just about to get awarded to you, so I hope you’re all over it following my very good instructions on followup.  And yes, it absolutely will devastate your chances of getting the modification so you want to get it really quick.

When you get this modification, they’re going to just ask you to update everything.  Show us recent pay stubs.  So, honestly Rachel, you really want to push them to get this modification before you lose or job or at least right after so that you can supply the income information, all right.  Now, also Rachel, think about this.  Think about if you lose your income, think about what your unemployment compensation will be if there’s any, and then think how you might make that up really quickly because sometimes the mods take so long that you might be unemployed and reemployed before it’s even finalized.

So, think through.  If you’re going to only be down $1,000 or $2,000 in terms of income, you might think of some pretty handy, tricky ways to replace that income like a contribution letter from a friend or relative or even another part time job or renting a room or something like that.  You know, you can make up a $1,000 or $1,500 pretty easily that way.  All right, you just interrupt me.  I’ve got about three or four more.

Ryan Rockwood: Okay, go ahead.

Mike Rockwood: Michelle says, “My own financial situation has not changed but my brothers has.  He lost his job and now lives with me and my husband.  His food and other expenses really put a strain on our finances.  Can that be considered a hardship and qualify us to get a modified loan?”  Absolutely, Michelle, it can be.  Obviously, you have the family responsibilities.  Obviously, you took them on so that is definitely an acceptable, qualifiable hardship.  Your expenses dramatically increased without any compensation.  It means, not paying any rent.  So, don’t even think about it, Michelle.  That one qualifies.

Put, you know, get the kit.  Put your numbers together.  And when I say get the kit, I really mean that.  I mean, I feel so strongly about the fact that you should do your loan modification yourself and that you should never do it alone, that I have no problem just blatantly tell people buy this kit.  This is 100% money-back guarantee.  It’s cheap to begin with. Cheap to begin with, great guarantee.  And let me tell you, even if you only use half a dozen of my tips and tricks to get out of line up to the front of the line, you will have saved yourself weeks and hours, hours putting the whole thing together and weeks in terms of getting your modification.

So, Michelle – where is that?  How does she buy the kit, Ryan?  Is it right down here or something?

Ryan Rockwood: Yes.  Below us.

Mike Rockwood: Go below us and buy that kit right now.

Dale says, “How do I show rental income for three homes that I own in another state?”  Dale, I have to assume – oh, yes, application for modification.  “Do I just add the income and add the expenses to my own budget information on the application for the modification?”  So, Dale is applying for a mod and he’s – Dale, you may be falling for a trap that is really hard to get yourself out of.  I always recommend, when you have more than one additional piece of real estate that you separate it all and put it on a separate profit and loss and statement that’s called a Schedule of Real State Owned.  And keep that schedule really simple.

On that schedule, just have the address, the mortgage holder, the amount that you pay in principal, interest, tax, and insurance, and the rental amount.  And then at the bottom, take the renal amount total.  Multiply it times 0.75 because you want to disregard 25% of your gross rental income.  And then take that amount and subtract from it your principal, interest, tax, and insurance number.

And it probably gives you, in most states, it gives you a negative number.  You probably, technically, actually, lose money every month on your rental.  If you really accept the fact that you probably do spend 25% of your gross rent on vacancies, maintenance and management, technically it’s actually kind of conservative.  Over the years, it will probably cost you even a little bit more than that.  But anyways, that’s what I recommend you to do.  Then take that number over to your budget.  Not as an income line.  Don’t even touch your income.  Don’t even touch your debts so that it doesn’t impact your debt-to-income ratio, whatsoever.

Put this line in as an expense.  And if it’s business loss, see attached.  And then it’s $500 or it’s $300 or it’s $1,900, it doesn’t matter.  Put it in there as an expense, business loss – monthly business loss – and then in parenthesis say, “See Attached”.  That’s the best way to do it because if you get it tied up into your debt-to-income ratio, it gets so hard for these clerks in the loss mitigation department to ever extricate it from the ration once they’ve used it to figure your ratio.  They just can never seem to follow your logic and your – so, I always recommend when you go in upfront, never it mingled with your own money.

Ryan Rockwood: All right, we got to wrap it up.

Mike Rockwood: Okay, I still got a couple of others.  I’ll e-mail back to these guys.

Ryan Rockwood: All right.  Thank you everyone for joining us.  I want to congratulate you on tuning in.  I know that all of us have someone that we’d much rather be at 6:00 on a Tuesday night.  You know, it really takes some courage to get on the line and know that our spouse or co-workers, “Oh, what’s that?  That’s stupid.  No one gets that.”  Just sort of that. There are always people criticizing.

Mike Rockwood: Come on and have a margarita.

Ryan Rockwood: There’s always people criticizing and nay saying, but I can’t tell you that there are people whose lives are being changed by loan modifications and we’re lucky enough to be able to have met a few of them, helped a few of them get those and their lives changed through the kit, through the product.  So, buy it, live it, love it, and spread the word, okay.  Thanks so much, everyone.

Mike Rockwood: Good night.

Ryan Rockwood: And we’ll see you Thursday.  Bye-bye.

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