One Talk Radio Host dubbed me the “Loan Mod Mercenary”!

I’ve been focused on this loan mod frenzy since the start – and 96% of my loan mods succeed? I created the 60 Minute Loan Modification Kit…to help others succeed with their mods.

Now, in 2010, with so much press about loan mod failures, I’ often asked why I’m still getting such a high success rate. My answer? It’s all about “file inertia”.

That’s how I describe the fact that files in motion tend to stay in motion. And, files that are stopped tend to stay stopped. So, your loan mod application needs, more than ever before to be perfect. Perfectly presented, perfectly complete, perfectly accurate and perfectly approvable.

Lenders are swamped. That’s not news. One way to get more time to work on the files and get management “off their back” is to reject as many files as possible for whatever reasons are plausible. Think about it. There is a ton of incentive to put your file into a holding pattern by identifying anything about it that is not perfect – and assigning it to a support team to fix. That takes weeks!

Here are my tips to get file inertia working for you on your loan modification application.

Income must be documented correctly and extremely clearly:
1. Self employed P&L – notarize it!
2. SSI and EDD – send checks AND send award letters
3. Calculate monthly for them – show at least three bi-weekly checks and at least three semi monthly checks…run the math for them.
4. 1099 – explain the logic you are using…like showing the last 90 days of comm. checks or showing direct deposits to my checking A/C. Total and underline and explain in notes.
Rental property must be handled correctly – Esp important if you are applying for MHA mod.

With 3 or more present your rental properties on a separate form and go to great lengths to make sure they evaluate it separately – the gross income is the issue.

If you only have one or two properties, I merely show the net of Rent minus PITIA as an expense item (or an income item if you are so lucky).

Front-end DTI must be right

Back-end DTI must be right

All debts on credit report must be addressed

Cash flow must be zero

You must be late on your payments

Your application must be flawless (no loose ends) and exceptionally easy to understand. Craft it as if you are across the desk presenting each page:

Cover fax/letter
Contents (with page numbers)
Notes whenever needed
Use their forms and mark thru the cells you are not using and fill-in EVERY one you can.
Sign/date bottom left of every page – all persons on the loan
Number bottom right
A/C# middle-bottom of every page
Highlight important info –circle, notations, etc.

Get these right and your application will sail through in no time and get approved for a great mod…just kidding! But, at least you will have inertia working for you!