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Mike Rockwood: “…call and it went well. Thanks for the preparation. Then yesterday, I got a call from the Collections Department at Wells Fargo and they seemed to know nothing about the previous call. They recommended that I start over. What should I do?” Dirk, just because I know your situation, I know that in fact that prequalification call was also within like the last 48 hours or 72 hours. So, I’m not too alarmed by this, the fact that the Collection Department would not know about your prequalification call because that was certainly done with the folks in the Loss Mitigation Department. And very often there is a, heck when you fax them, there’s a 36- or 48-hour delay much less between departments. They’re not all as synchronized as you might think they are. So, I wouldn’t be alarmed with it, number one. And number two, it’s not really that difficult to start over because you’re so completely prepared. That budget that we all worked out.
Ryan Rockwood: Go ahead.
Mike Rockwood: That budget that we all had worked out –now it’s right if you want to get any feedback – we had worked out, it hits the mark. And if you have to just go through the prequalification process again, that’s no big deal but I honestly do not think that that’s going to be a problem. Keep in mind we work with several different departments during the foreclosure process and during the loan mod process. You’ll certainly be working with customer service. Sorry about that. Okay. Then you also will work with the Loss Mitigation Department and then eventually you’ll work with the loss mitigation specialist who’s usually also called the negotiator.
And you may have to work with the Collection Department. And sometimes, the Collection Department gets carried away because they’re charged, of course, to keep after their loans that are in default. And so sometimes they get the word a little bit late and sometimes they’re not as, shall we say sensitive as the other two departments are to the whole foreclosure process. They’re more geared and more trained to pressure people into making some kind of payment. So, they’re much more abrupt, often times rude and pushy. But believe me, they’re nothing compared with the collections outfit that you’re going to run into it as soon as if your loan gets charged off, all right. All right, so Dirk…
Ryan Rockwood: All right, let’s get started.
Mike Rockwood: Don’t about it.
Ryan Rockwood: Welcome everyone. Sorry about the delay. Welcome to the 60-Minute Loan Modification Insider Secrets Teleconference Series. We’re here to beat the bank, to save your home, and help you escape bad debts forever. My name is Ryan Rockwood. As usual, I’m joined by my father and business partner, Mike Rockwood.
Mike Rockwood: Hello, everybody.
Ryan Rockwood: Now if you got this – if you just tuned in as regular, nothing’s changed about the phone number. But if you check one of the update e-mails for today, you can get a web page that you can go and kind of watch us stumble our way through questions and see us in the flesh. So, check it out. I believe it’s probably our website, 60minuteloanmodification.com/september24. Is that it?
Mike Rockwood: I’m quite sure it is.
Ryan Rockwood: It is. Okay, cool. So, check it out if you like and we’ll be improving that each week. All right, so before we get started, a couple of quick announcements. We’re planning a new training for real estate professionals and business-minded people who are interested in getting involved in loan modification business as associates. And this is going to be a big hit [phonetic]. It’s going to take a ton of work. So, I’m kind of fearful about getting it started but there’s such an overwhelming interest and we just have to flesh it all out. But basically, what we’d like to do is have local representatives working in different cities, helping homeowners, and educating borrowers.
So, if you think this have interest you, please send us an e-mail to help@60minuteloanmodification.com and you put in it something like loan modification business opportunity or something like that. You know, originally we kind of thought about it in several different ways. And we originally want to do kind of a referral network or something. But the labor intensive thing is just so massive to try to coordinate different people. So, I think…
Mike Rockwood: And then Ryan, we got a lot of people who just wanted to do a loan modification for a relative or for two relatives or for two neighbors after they have done their own. So, they needed a little bit of training in terms of how to do that, number one. And then number two, how to set it up as a business because there are, of course some legal challenges to it.
Ryan Rockwood: Yes, we talked about that legal problems can be overwhelming and extensive way before you ever earn any money. Then if you earn any money, they’re even worst. So yes, there are some tricks and tips to it that we can help you with. Basically, what we’re going to try to do right now is give everyone the same kind of training that we’re getting you right now and we’ll try to put that in a format that you can go back to and visit, and everything like that, like you do have – like you have with the books right now. But also, there’ll be additional chapters and lessons in there about interacting with customers, finding customers, billing customers. And we’ll queue into a couple of ways, that we can recommend some ways that you can get legal to do advanced billing and all those different things if that’s what you want to do. Okay.
Mike Rockwood: Yes. I’m excited about this. I think a lot of people have expressed interest in it. So, I think it will take off.
Ryan Rockwood: It’s funny though because, of course; we’ve read pretty much all the loan modification books out there because we really didn’t want to write a loan modification book. But then the problem was they all were pretty bad. And so my dad had to write his own. But in there, one of them actually had, like loan modification, and it came with a business opportunity to do a loan modification. And at first we thought that was the dumbest idea on earth because we thought who on earth wants to go into the – no one wants to go into the business of loan moding. They just want to get their damn loan moded and move on with their life, right? Well, I don’t know, it’s kind of blowing up as an industry. And people are realizing between my family members, I have 25 mortgages I could deal with, you know.
So, anyway, that’s just a little advanced tip on that. Remember also, announcement number two, that you can get advanced access to your credit report one time a year – advance isn’t the right word. You can get free access to your credit report one time a year at annualcreditreport.com and you can get it right now. After the first time, it costs $20. So, do beware that some unscrupulous companies do charge people like ridiculous amounts of money like a couple of $100 to pull that credit report. They claim they’re doing a deeper search or something but there’s really not anything to that. And the other key is that there are a lot of folks out there that you will discover that claim they’re going to give you a free credit report and they’re collecting your information to resell. And when you actually get to the credit report, it’s free if you sign out for a visa card or some junk like that. Okay.
So, on with tonight’s call. Now, we have a special – before we go on with the call, I want to tell everyone, in case you haven’t heard, we have a small upgrade that we started recently. And it’s $100, well, about a $100 I think, $107 or something. It’s called Get it Done. And if you want to check it out, go to 60minuteloanmodification.com/getitdone and we basically call you, interview you, do your hardship letter and your budget over the phone. We actually write things down, e-mail them to you. You send it in. Okay. So, it’s kind of – it’s not a totally full service loan modification. It’s not the barebones.
Mike Rockwood: But we take those two difficult areas. Those are the areas that time and time again people were stumbling on and procrastinating because they were difficult. So, we thought, how can we help people get over these hurdles? So, doing those two things, honestly when we hang up, when we’re done with that Done For You call and sometimes it takes an hour and a half, we ask the folks. Now, what reason could there be that you don’t hang up from our call and dial your lender for your pre-qual call because you are ready. And we really try to get them to do that because the whole purpose of that is to get you to take action. We’re really all about getting our message out and getting our Do-It-Yourself book out but getting it done. We really want to do whatever it takes. So, that person after person, client after client has success because our business model depends on it. It depends on you having a successful loan mod, telling your friends, telling your relatives, telling your neighbors and your coworkers, et cetera.
Ryan Rockwood: Okay. So, and on that, we’re doing kind of a trial experimental thing also. We’re always trying to change things up and develop – well anyway, back to the Get it Done thing, if you’ve had our kit for more than a month and have not been – have not put your loan modification in yet, I really urge you to do it. We’ll actually get it done for you tomorrow. You’ll get your application done by tomorrow.
Mike Rockwood: That’s how good that would be.
Ryan Rockwood: Yes, we made a pledge on Tuesday to do that, and I don’t think anyone took us up on it. We got some mortgages but no one took us up on that.
Mike Rockwood: Yes. They may be expecting it. We better clarify that with everybody.
Ryan Rockwood: I saw [Indiscernible] in order.
Mike Rockwood: But we have a lot of order.
Ryan Rockwood: So, check that out. And then should I also make an announcement about our new ideas for the totally full service loan modification or should I change that?
Mike Rockwood: Well, it’s not really to announce it, so you probably shouldn’t.
Ryan Rockwood: Okay. We’ll just move on it.
Mike Rockwood: Okay, new pricing for the full service.
Ryan Rockwood: We’ve got – we’ve got some new ideas coming up. Okay, so on with today’s call, Strategic Planning, when your house is on the line.
Mike Rockwood: Okay. So, the message that I want to share with everybody, and as you all know the format here is I share some ideas, a little bit of training for about 10 minutes before we get started on actually answering your direct questions. And by the way, e-mail your questions to help@60minuteloanmodification.com.
Ryan Rockwood: Let me also mention that …
Mike Rockwood: Have you noticed we’re not really very organized today?
Ryan Rockwood: Did you just say help? It’s questions.
Mike Rockwood: Oh Ryan, I’m sorry. Okay, so, we’re really a little bit off. I think the technology has a [Indiscernible] freak, Ryan.
Ryan Rockwood: It does.
Mike Rockwood: So, the questions come to questions@60minuteloanmodification.com. Send them right now, questions@60minuteloanmodification.com. Sorry, Ryan.
All right so, today’s topic that I wanted to talk about is stepping back a little bit and getting a strategic plan for your workout options and for your loan modification. And the reason that we thought this would be a timely topic is because we’re realizing that that is very helpful for us to do on this Done For You calls because very often, we’ll jump right into it with the client and we’ll get halfway through it. And we’ll realize that maybe the loan mod isn’t the best option for them.
So, what we’ve gone through now is starting the process by talking through a little strategy for about 5 or 10 minutes. And so let me go over with you the kinds of things that we talk about. The first thing is your situation analysis. First, we ask everybody to work with us to put together their real monthly budget. And we give them a form. We’ve sent you a form in the Black Belt CD and in the workbook. But we like to work with everybody to get it done accurately because honestly, I bet more than half of the clients that we work with are really not aware of really where all their money goes. And that’s not to put anybody down. It’s very, very common.
But once you actually put it down on paper and realized that you had some structural problems, you know what I mean, some structural financial problems as in you made more commitments than you can handle, it actually becomes something of an emotional relief because you realize, hey, it isn’t just me going out for dinner too many nights during the month. It isn’t just me spending too much on clothing or et cetera entertainment. There are some structural problems here. So, going over the financial analysis very often gets to that first aha where people say, that’s why I feel all these financial pressures. So, financial analysis is always the first step.
And then we always take the next step and as long as we’re at it, let’s do a quick balance sheet. Let’s talk about what kind of assets you have and what liabilities you have. And that is important because these days so much of our wealth is tied up in real estate, and in the last two years our real estate wealth has declined significantly. Around the country, it’s declined by 50%. And with many of our clients, their entire net worth has declined by 50%.
So, it’s kind of shocking sometimes when you put that $25,000 car, that $300,000 home on which they owe $400,000, $25,000 with the credit card debt and then you start to list, to ask them for their assets and you realize they ain’t got none. It’s kind of shocking to them to see that in fact, they’re very negative in their net worth. It kind of changes your perception a little bit of how you might want to deal with this foreclosure issue and your real estate issue. All those is just about getting your mind straight and seeing things clearly so that you can make good decisions.
The third thing that we do then or the second thing is after we go through your personal financial set up or situation analysis, we look specifically at the property in question. And we go through a property analysis, taking its current market value as conservative as you want to be, and then estimating a 6% to 10% cost to sell it if you have to sell it right now, then listing your first mortgage, your second mortgage, any other liens that you have on the property and then subtracting all of that from the value and figuring it out what your equity really is. And that sometimes is really scary to people because honestly we deal, in Southern California with an awful lot of people who own property over a million dollars, and an awful a lot of people that earn under a $100,000. That’s 10 times their annual earning power.
So, when they see that on paper they are, like yesterday we dealt with the person who has three- hundred-freaking-thousand dollars underwater on their home, it’s very sobering for them to realize that they’re that much in the hole. And then what we ask them to do is look around your neighborhood and tell us, what are the comparable homes to rent for? Because rents have been going down, so sometimes it’s kind of illuminating for people to realize that they could be renting a home comparable to theirs for significantly less than they’re paying in their mortgage.
Now, we like to use that rental income or that rental amount as kind of a target then for their loan modification efforts. We say to them, listen, if you can rent for $1,200, your house next door, then you’re silly to be paying more than $1,500 on your own home. So, let’s get the modification down to $1,200 to $1,500 or else let’s get rid of this debt. Okay. So, that’s the second step we take. And then we take this big step to get clarification on what I call the three important side effects.
Your FICO score, your tax liability, and your vulnerability to deficiency judgments. And I’ll run through this briefly. It’s very often the case that people are afraid of deficiency judgments, afraid of how much tax liability there could be, and afraid of how much their FICO score will decline. And the reason I know this is because they’ll express that to me but then what I always say to them, it’s very easy for us in the next few minutes to determine precisely what your risk is, how much your risk is exactly how bad it can get. And that’s very freeing to people. So, I walk them through the deficiency argument, the deficiency judgment situation. And the very easiest way to get absolute clarity anywhere in the country is to call a local realtor, making appointment, you have to pay a little bit of money but bring your loan documents with you and ask them, explain that you’re considering several foreclosure options that could resolve in a forgiven amount. Would you have a deficiency judgment vulnerability? Then the second thing you do…
Ryan Rockwood: That’s the realtor, the one that [Indiscernible]?
Mike Rockwood: No, no, you ask a lawyer. Did I say realtor. Oh, no. You want to ask your lawyer then. Secondly, you want to ask your CPA, your tax accountant the same question. I’m considering several foreclosure workout options that may result in a forgiven amount. Help me think through exactly whether or not I can get exempt from the taxes on the forgiven amount. And if I can’t, how much will I owe?
Ryan Rockwood: You know, [Indiscernible] in shortcuts that people take. I don’t want to pay a lawyer $500. No one wants to pay a lawyer $500, for the love of God, right? However, let’s then go back. You can get a free information off the Internet, you can get some free information from friends, and maybe even from professionals and so on. However, in the case recently where you’re on the phone, regarding one of your properties the banker told him, “No, you have – we have recourse on that property.” And you said, no, you don’t have recourse on the property because of this talking about the loss. And he said, no, absolutely not. That doesn’t apply. And all that made me think of is if you have taken the shortcut and you think you got the right opinion, they’re going to lie to you. You know what I mean?
And you will buckle if you didn’t pay someone $500 to tell you the truth. You know what I mean? If you went to a realtor – I want to get some free information, I want to get this and I want to get that, probably no recourse. It isn’t good enough when you’re on the phone with your lender and they’re saying to you, “We’re going to go after you for $100,000. You own a big house.”
Mike Rockwood: For deficiency judgment. Right. No. Very good point. And Ryan, maybe that’s the best way for people to handle it is initially get an opinion. You can get an opinion from us. You can get an opinion from a local expert but when push comes to shove, I always recommend to all my clients, let’s get absolute 100% certainty on deficiency judgment and your tax liability for your mortgages on your house with trusted advisers, people that you trust. And it just going to costs them $500. It costs like $200. So, it’s really money well spent.
Ryan Rockwood: It would be a real estate lawyer.
Mike Rockwood: Yes.
Ryan Rockwood: It would be a real estate lawyer. Lock down 100%.
Mike Rockwood: A real estate lawyer and CPA, real estate. Third thing is your FICO score and you can get real clarity from us on how much your FICO score will be impacted and what kind of collections activity will be taken against you. Some people absolutely wither when a collection person calls them and ask why they’re being so irresponsible. Other people could care less. So, you really have to judge your own sensitivity, how thin skinned you are. And if you are thin skinned, you just should admit it instead of trying to put up with something that just horrifies you. But you should concoct a way to deal with it. If you’re not going to answer those calls, if you’re going to screen all your calls, that’s fine but you do need to have a way to communicate to the lender because you just don’t want to just go dark on them. That’s almost a guarantee that they’re going to take the path of least resistance, which is accelerating everything and giving you the benefit of none of their doubts, all right.
So, you want clarification on FICO score situation, your tolerance for collection calls, efficiency judgment, and the tax implications. And now to think about it the things that I just talked about, those four steps. Think about how much more clearly you would be thinking about your situation if you had absolute certainty about those. You would think real clearly about whether or not you should walk away from the property, whether or not if you’re going to fight for it, how much you should be satisfied for in a loan modification. And if you are satisfied with the temporary loan modification, like the interest reduction loan modifications that we’re getting now, you want to do it with a clear thought of how much principal reduction you’re going to absolutely require down the road. In other words, you have a real clarity of what this is all about. This is a business arrangement. Try to take the emotions out of it and think clearly as if you are your own business manager and that’s how you can get to a good strategic thinking.
And I love having people have a good strategic handle on what’s happening with their loan modification and their foreclosure process because then when the curves and the twists in the road come, which they always do because things don’t usually work out exactly like we think, they will have already thought through some alternatives. And similarly very often, it’s advisable to take off down a couple of roads in foreclosure to also start your short sale process or your deed in lieu process. At the same time, you start your loan mod process. Good enough?
Ryan Rockwood: You know when it comes to strategic planning, something that occurs to me is that you can’t do strategic planning unless you’re thinking clearly.
Mike Rockwood: Yes.
Ryan Rockwood: And it may be, if the case is that you cannot think clearly, it doesn’t seem like people have a good success rate of fighting that. So, I’m just saying what could they do? You know?
Mike Rockwood: Well, that’s where people like us really come in handy. You know, an objective sounding board, I can’t tell you the number of times that people call me and they lay out their situation. I’ll talk to them about it and they’ll say, gosh it seems so complicated. But after talking with you, I guess it’s pretty clear because you’re right, you’re stressed out and you’re not thinking clearly. There’s so much emotion tied up in our homes, right?
Ryan Rockwood: Yes. Disappointing family, disappointing the ideas you had for yourself. Disappointed that your real estate investment didn’t make you a millionaire, you know.
Mike Rockwood: Right.
Ryan Rockwood: And there is just a mass delusion out there that everyone that most people just longed to be a part of this. The real estate is going to turn around hearing on the radio all the time about the depression – the recession has stopped.
Mike Rockwood: It’s over. Yes.
Ryan Rockwood: That would be great, but that still doesn’t mean that we’re not going to be – it’s going to take five years before we rebound, you know, before we hit bottom and bounce back up.
Mike Rockwood: I’m glad Goldman Sachs is having such success though.
Ryan Rockwood: Yes.
Mike Rockwood: Don’t get me going. Go and talk.
Ryan Rockwood: Anyway, one of the things that occurred to me was my dad gave me this book, I think, was it called Sway?
Mike Rockwood: Yes, Sway.
Ryan Rockwood: Sway. It’s a best seller, a New York Times Best Seller. You might want to check it out. It’s called– it says Sway and the subtitle is something like The Irresistible Pull of Irrational Behavior. And it had a lot in there that – I didn’t finish it yet but it has a lot in there that just directly correlates to the stuff that we’re dealing with, with real estate people right now. There is just – we’ve talked about that. There’s this irrational, wild, passionate desire on people to grab a hold of whatever is killing them and never let it go.
Mike Rockwood: Yes, holding on to that anchor as they’re thinking.
Ryan Rockwood: Hold on – you want to tie yourself to it and then if that doesn’t work, you want to tie your relatives to it and your neighbors even maybe. I mean it’s so irresistible that the desire to try to get things back, how we wanted them mentally. Anyway, you might want to pick up the book. It’s pretty illuminating about just basically the incredibly stupid stuff that we all do.
Mike Rockwood: Well you know, Ryan, I like to remind people too that the American Dream, which is really deep seated in all of us, is really all about being independent and being free. It’s really not about owning a home or being so well-to-do that we have big, big bank accounts and grand at everywhere and SUVs. It’s really about being free. And honestly the American Dream, in terms of real estate, has taken a curve that for 75 years, it has not taken. And those of us living through it need to get our minds around that a little bit and accept the fact that for some period of time here, owning a real estate is a real 50/50 kind of proposition. It might make sense but it really might not make sense.
So, you really have to start thinking differently than we have ever thought of in our lifetime, our parents never thought that way. Real estate has always been that safe haven like gold. You know, that’s even where the name comes from. Real estate has to do with royalty. It’s Latin. You know, the derivative is actually “Real”, Royal Estate. So, it’s what in Europe, what the stated or the property class had that nobody else had.
Well, we’ve all carried that with us and we think of real estate for the royalty and we all want to reach up to it. Well, it’s a miscalculation by a long shot. And Ryan and I are just flabbergasted sometimes when we work a spreadsheet out with somebody and show him what a terrible situation they’re in and they’ll go, “Well, is there’s anyway you can help me save this home?” And we’ll go, hello, aren’t you listening? You don’t own this home first of all. And it’s a terrible investment. It’s declining rapidly. You know what I mean? It’s just a terrible financial mess. You don’t own this home.
Ryan Rockwood: The thing about that that is very powerful is that I didn’t know that it was the origin of the word real estate but I had heard some stuff like that. I can’t remember if it’s a word gentlemen or what it is. It might be gentleman.
Mike Rockwood: Gentleman has to do with manners, the courtly manners, courteous.
Ryan Rockwood: One of the words though had to do with what was the difference between…
Mike Rockwood: Only commoner?
Ryan Rockwood: Owning man. What was the difference between – anyway, the other thing was these idiots in the 14th century or whatever did not have loans on their land. This crap was paid off, you know. Like, you know what I mean?
Mike Rockwood: Yes.
Ryan Rockwood: No one had, as far as I know, I don’t know. But I was recently reading that take off of Pride and Prejudice, right. It’s called Pride and Prejudice and Zombies, another best seller. Anyway, the idea there was that whenever they would introduce someone in this glorious [phonetic] Victoria novel, almost immediately they talk about how much they worth and they talk about how much they worth in terms of how much their lands generated them a year. That was in other words, they consider that a return of investment or something. You know what I’m saying?
So, they say this person is worth 5,000 pounds a year, something like that. And it made me realize these people don’t have loans. They haven’t mortgaged their land. You know what I mean? They never plan to or else – there’s no such thing. Anyway, the whole idea of owning a land is not so that you can be a terrific slave to it and never be there because you have to be at work.
Mike Rockwood: Yes. And we’re really on our soap box. Sorry for going so long but this whole debt thing has just – you know, it’s just lulled – over the decades, we just got lulled into carrying more and more and more debt. And it isn’t just us. It’s every company that all of us work for. They’re all in debt and running on the edge of cash flow so that the slightest little downturn and they start dropping like flies. So, we’ve been hood-winged. But let’s take some questions. We’re using this all the time.
Ryan Rockwood: Well, I do wanted to say that we got a little shout out here from an anonymous customer here that wanted to thank you for help on a short sale. Anyway, this is a client that wrote in. Apparently what happened was, “Short sale felt through a disaster. My dad stepped in. I didn’t know anything about this one. My dad stepped in, [Indiscernible] an investor in there. And they’re going to work the short sale now. He’s going to hopefully get a – it looks he’s going to get a postponement on his trustee sale.” So that’s cool. And then we had another crazy, crazy testimonial from a guy. We had a live event.
Mike Rockwood: Yes.
Ryan Rockwood: Four months ago, six months ago.
Mike Rockwood: Here in the South Bay
Ryan Rockwood: Yes. You know attended by maybe 10 people. Nothing. No big deal. And one of the guys randomly called us up the other day. And what did he tell? How many did he say he’s done?
Mike Rockwood: Well, he was an investor.
Ryan Rockwood: We never heard from him again, you know, that kind of thing.
Mike Rockwood: Yes, but he took the program and boom, boom, boom, he got through 11 mortgages. That’s the most I’ve ever heard of anybody. Even our friend up in Seattle hasn’t been through 11 of his own. These are 11 of his own mortgages and he’s having trouble with the 12th one, and he’s on his way on all 14. But he now writes checks for $2,500 less than he did in March every month. So, he saves $2,500 a month. How sweet is that?
Ryan Rockwood: So, $2,500 a month, that’s a yearly wage for a typical …
Mike Rockwood: Yes, yes, for a lot of people.
Ryan Rockwood: Thirty to forty thousand dollars a year. The other thing is that—back to this point of unreasonable behavior, I guess that I wanted to say was if you are feeling irrational, if you have to get someone you trust and you may have to act upon their advice against your better judgment. You know if you’re in relationship, help you go to your family member, you say, “Listen, I don’t see this clear and they say, he’s a bum, she’s a bum. Throw her out.”
Mike Rockwood: Intervene.
Ryan Rockwood: And you don’t want to, right? So, if you’re in this call, you bought our kit, the least we could do for you is say wake up. You know what I mean? Take that as your call. We met with this gal. We met with one guy today who said, “All this what I wanted to do in the next week.” We went home. We checked his – the records that we had on him. His sale is in six days on his house.
Mike Rockwood: Yes, he’s losing the home in six days.
Ryan Rockwood: You know what I mean? Wake up. Take action and make your life better. For goodness, you don’t have – you don’t have to decide next week. Next week, decisions are going to be made for you. This other woman wants to keep her house so bad. That’s $200,000 under debt here on the hill. We get let her walk Scott free, you know, amongst everything else is going to bankruptcy, whatever. She wants to carry this burden of this house so bad and her trustee sale is on October 6. I probably should have been unspecific. But anyway, the point being, wake up. These aren’t – so with that, it’s a friendly wake-up call.
Mike Rockwood: Yes.
Ryan Rockwood: Okay.
Mike Rockwood: Snap out of it. I’ve got a question here. You want me to go ahead?
Ryan Rockwood: Yes go ahead.
Mike Rockwood: Martin says, “I’m hoping to get a loan mod but I did not start until I was eight weeks into foreclosure. Now, I’m afraid I’ll get the notice of default soon. And I want to know what I do when that happens.”
Okay. Martin you are absolutely right when you started your loan modification process that did not stop the foreclosure process because you waited until after the foreclosure process had started. They’re not going to interrupt it. What they will do is late in the process they will postpone the trustee sale if you proactively ask them to do so. However, they don’t want to interrupt the process because they’re not sure you’re going to cooperate. They’re not sure you’re going to qualify. They want to keep their options open.
So, you will get the Notice of Trustee Sale. I don’t know what state you’re in Martin. But if you are in a non-judicial foreclosure state, you are going to get almost all of them. You’re going to get the notice of trustee sale three full months after your Notice of Default. So yes, you’re probably just three or four weeks away from a Notice of Trustee Sale and then you’re on a really short leash. Then you’re on just like 21 days.
So, that’s when you need to be extremely proactive to be sure, absolutely sure that you get a postponement and that it gets transmitted, communicated properly to the trustee and to the option house. So, stay really close with us during that time. If you don’t get a loan mod by the time you get that NTS, be really close with us. Notify us right away by urgent e-mail and stay close.
Ryan Rockwood: Now, I can’t say that we have the very best excuse ever for not submitting a loan application today. And I haven’t told you about this yet. Someone just wrote in a loan mod application. She got kicked in the face and the abdomen by her horse.
Mike Rockwood: Oh, man.
Ryan Rockwood: Obviously, she’s okay because she’s writing us but that has got to be the all time award for…
Mike Rockwood: I’ve been kicked in a lot of places by my horse but never in the face.
Ryan Rockwood: It’s horrible.
Mike Rockwood: Oh no, wow.
Ryan Rockwood: I got kicked in the knee and I was out for four months. And it was horrible.
Mike Rockwood: He still doesn’t ride because of that.
Ryan Rockwood: It’s got out of the habit but…
Mike Rockwood: Imagine that, kicked in the face. It’s going to break something, right? We got to help that.
Ryan Rockwood: Apparently not. Apparently not because I think she would have been worst. Maybe it was a brush.
Mike Rockwood: Oh man, we got to help her.
Ryan Rockwood: Yes. So, anyway…
Mike Rockwood: Okay, do you have questions, or I’ll tell them to keep going?
Ryan Rockwood: Yes, I do have a question. Kevin asks, “What does strategic planning have?” They got turned down for the Obama modification and they were told that Fannie Mae’s requirement is four consecutive late payments. In turn, the strategic planning…
Mike Rockwood: Fannie Mae’s requirement for…
Ryan Rockwood: For a loan modification. It is four consecutive late payments, which would be I guess over 90 days late. It’s pretty long.
Mike Rockwood: Yes. Don’t get it.
Ryan Rockwood: “In terms of strategic planning, what role does not paying the mortgage have?” And that’s an easy one in that your chances of getting a good modification continually and…
Mike Rockwood: Geometrically
Ryan Rockwood: Yes, increase as you get later.
Mike Rockwood: Yes, it’s right.
Ryan Rockwood: So, if you’re willing to sacrifice.
Mike Rockwood: Honestly, some of the – I got one client who is, let’s see. “We’ve already submitted a short sale proposal. The bank is considering it but the bank is proactive. They’re actually coming out.” And I should pass this on to everybody. Wells Fargo, for whatever reason, is becoming very proactive in terms of working with their clients to make sure they understand all the solutions. So, really, hats off to those guys. I don’t know where they’re getting all the time and the resources. But they actually are sending people, their own employees out to counsel with the clients. And it seems to me, just from the experience I’ve had with now four of these, that it’s clients who have large loans and don’t have a history of default. So, maybe they’re kind of strategically picking those people that they think they really can and should work with to keep their mortgage with them.
So, anyway, they’re sending these people out and this one client of mine was set on a short sale. It was a good offer. She already had plans for her next home. They were ready to move on. And now just yesterday, Wells Fargo sat down or offered to sit down and talk to them. And in counseling her to get ready for it, I recommended that she ask them, what kind of an offer would they make? Because even though her income is way below guides for a loan modification, when they get into those really tough situations late in foreclosure, late in the short sale negotiation, they will do extraordinary things. So that the more tensed, the more late you get, just like Ryan said, the more your options open up in terms of what kind of remedy you can pull out of the hat.
Ryan Rockwood: We got one client here who writes in …
Mike Rockwood: Hey, wait a minute. Now, you didn’t tell this guy the obvious benefit of saving money too. And we always recommend to people you take that monthly savings and you really should either stash it away or pound it down on some other debt that’s going to help you get a good modification. Because very often in your modification process, you’re going to be asked for a down payment on a repayment plan, although, also we should pass along the fact that those have been really reduced lately and eliminated in an awful lot of cases. So, maybe we’re seeing a move away from that. But the obvious benefit of not making your payment is, stash that money away because you’re going to need it.
Ryan Rockwood: Yes. One guy writes in and this is awesome. He’s got $110,000 commission check. That’s awesome. This guy must sell like big homes or something. Anyway, whatever it is, we should do it. He says, “Should I include in my loan mod application $65,000 in a brokerage account that I recently funded from this huge check even though his money will go to my dad at some point. Will this asset help me or hurt me?” What do you think?
Mike Rockwood: I think it’s pretty – you know, your intuition is probably right or you wouldn’t have asked this question. Your intuition is right. It will hurt you. In a loan modification, we have not been submitting assets for – really, in all of 2009. We stopped at about first of the year and the banks have not requested, and we do a lot of loan modifications so I would say that your assets are not an issue. Just like the value of the home and just like your credit score, it’s not an issue in the loan modification. So, don’t let them see it.
Ryan Rockwood: Some people might think well, why not write?
Mike Rockwood: Well, I think this guy’s question, it has to do with the fact that it came into his account. And so now they do ask for four months of checking account or three months of checking account. If it’s there, I would attach a note explaining it that it is your money that came in that is owed to your father and just leave it at that.
Ryan Rockwood: But it didn’t save the brokerage account though, so hopefully it never hit any account.
Mike Rockwood: Yes.
Ryan Rockwood: If you don’t have to complicate things, why complicate it, right?
Mike Rockwood: Yes, absolutely.
Ryan Rockwood: It certainly not going to help you.
Mike Rockwood: Right.
Ryan Rockwood: That’s for sure.
Mike Rockwood: No.
Ryan Rockwood: Not in the slightest little bit.
Mike Rockwood: No.
Ryan Rockwood: And especially if you’re looking at a possible deficiency judgment or something like that…
Mike Rockwood: Well, that’s the main cause for concern. If you’re in a state where you have deficiency judgment vulnerability, you just don’t want them to know that you have the wherewithal and that they can pursue. They have the right to and you have the assets. Of course, they’re going to want to pursue. Not good.
Ryan Rockwood: Yes. Could you give me that phone right there and I’ll try to use that one to take a live caller.
Mike Rockwood: Okay.
Ryan Rockwood: What is this on two?
Mike Rockwood: It’s on line one. Randy says, “Do short sales always stop the foreclosure process? My realtor says no.” Okay. Well, first of all, there is the case when the bank refuses the short sale, and they may do that for a couple of reasons. One is the offer may not be any good. In other words, the price is nowhere near the market value that their own investigation tells them they should get. Number two, the buyer – you may not have substantiated well enough that the buyer is qualified well enough. That’s almost as important to him as how much they’re going to get because they really don’t want to postpone things if they’re going to end up owning this thing anyways.
So, those are two reasons why the short sale may not stop the foreclosure process. And then I also should point out that just like loan modification, if you’re already in the foreclosure process, the lender will not stop the process. They’ll just postpone the end of it, the trustee sale or the court order. In other words, they’ll keep the process going so that it burns up the clock because that puts them in a better negotiating position. So, it doesn’t stop the foreclosure process but it does give you a tool by which you can ask for an extension, okay.
So, very often, and like Ryan was just referring to a few minutes ago, we have been very successful with short pay-off, short sale requests. It’s very close to trustee sale like the next day of getting them postponed. So, short sale is a good alternative. And if you think about it, why wouldn’t it be? Because the bank is now seeing that today, they have the opportunity to go into escrow and get their money 30 days from now at about market price.
Their alternative is to take the property back and that will take them about 30 days before they get a realtor assigned to it. Get it assigned and cleaned up and back on the market. And then they begin the selling process all over again, and they’ll probably get about the same market price. So, it’s like money now or money later. All their costs are the same. So, of course, they’re interested in short sales. They’re more profitable because they’re money is sooner for them.
Ryan Rockwood: All right. Thanks everyone. As you know, we’re huge advocates of Do-It-Yourself Modification but that doesn’t mean you should do it alone. We’re definitely here to help. There are a couple of different ways that we can do that. First of all, we can provide support so the kit that you’ve already purchased. Be sure to submit your hardship letter and your budget for – what are we telling them – like, review or analysis or whatever. We’re totally caught up in doing those very rapidly now. So, get that in.
Also, sometimes, we have found that – you know, we live in this world and we talk about it all the time but other people don’t and they feel isolated. And they feel like they don’t really have other people that they can keep around these ideas with. And oddly enough, they have been wildly benefited by getting on the phone with my dad and talking through their issues.
Mike Rockwood: Oh, it’s so true.
Ryan Rockwood: Twenty minutes…
Mike Rockwood: It really helps.
Ryan Rockwood: It’s reasonable.
Mike Rockwood: And very often, I’ll get to the end of the conversation and I’ll say I’m sorry. I got a problem charged in your $49 for this time together. But I have to because I have to earn a living. But I didn’t tell you anything you didn’t know. And they’ll invariably say yes, but it just helps to run through it and to say it and to bounce it off somebody who’s doing this all the time.
Ryan Rockwood: It’s the same stuff. It’s the same stuff. But everyone has unique this, unusual that.
Mike Rockwood: And so we brought just unusual.
Ryan Rockwood: Or so it seems. And you know, you always think, what about in my case? What about in this case? What about in this state? What about in this house? So on and so forth.
So, anyway, you want to do that, check out 60minuteloanmodification.com/talkwithmike. That’s /talkwithmike, that’s it. Also, as a current client, if you need help literally getting the application done, we have a Done For You service. It says right here that you can upgrade to that for $147. I thought it was $117 or something like that.
Mike Rockwood: Yes, I thought it was $107. Maybe we should get our act together in terms of charging.
Ryan Rockwood: Yes. If you’re on this call and you want to buy it, just send us a note that we said it right.
Mike Rockwood: Ryan said it was $100.
Ryan Rockwood: Next week it’s $147, so if you want to do that and you want to get it done tomorrow or whenever you want check it out it’s at 60minuteloanmodification.com/doneforyou.
Mike Rockwood: Get it done.
Ryan Rockwood: It says Done For You. Done For You. Also try Get It Done or help@60minuteloanmodification.com.
Mike Rockwood: I know it’s Get It Done or it‘s just last week
Ryan Rockwood: It could be both so. With that, I’ll sign off. We spend most of the day on the phone, so e-mail is the quickest and best way to get a hold of us. We look forward to talking with you. Please e-mail us at help@60minuteloanmodification.com. Thank you so much. And if you’re on this call, I’m hoping to get a question answered. And we weren’t able to take you live. I apologize. Go ahead and shoot that question in tonight, and we’ll be sure to get back to you by tomorrow. Okay. Thanks a lot. Thanks and goodnight.
Mike Rockwood: Thanks everybody.
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