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10 Critical Loan Modification Tips

1.   Don’t Pay $3500 plus to a modification company

2.   Don’t be or act embarrassed that you are in this position

3.   Don’t wait too long to call

4.   Don’t Be Unprepared (must have hardship and story ready to go)

5.   Don’t give too much information

6.   Don’t be overly aggressive and pushy

7.   Don’t negotiate with the first CSR you speak with

8.   Don’t be over willing to take the first offer

9.   Don’t take no for an answer (tricky)

10.  Don’t call your lender until you read my book first

1.  Don’t Pay $3500 plus to a modification company.

Since this crisis began I have noticed so many loan modification commercials spring virtually out of nowhere. You see the ads on TV, radio, newspapers and on direct mail. I’ve even heard of companies that have auto-dialers that can contact as many as 500,000 households per day. They have pre-recorded messages offering assistance to borrowers that are struggling to make home payments. You can’t blame someone for trying to make a living but I assure you, were not curing cancer here. You can do this on your own. 80% of these companies consist of the same people who contributed to putting you in this position. They are displaced mortgage and real estate professionals who are attempting to make a living. How do I know, I’m one of them and yes I have an angle too. I feel if I provide value, trust and education, it will come back to me. Who are the other 20%. Attorneys and Law Firms trying to capitalize on the crisis. Do they have any more experience than the real estate professionals? Probably not but most folks believe that attorneys have more pull with lenders than regular folk. Not always true. Some firms do have expertise in real estate contracts and look for mistakes on past paperwork but most don’t use this technique. I know of some law firms that have nothing to do with real estate that have jumped on the gravy train. The problem here is simple. There are some companies I mention above that charge a fair amount and do a great job, but unfortunately there are others who capitalize on people’s misery. You have probably noticed on TV how many companies have taken people’s money and have not even attempted to modify loans. Not cool. It makes us all look bad.

Bottom line is the lenders want you to call them to modify your loan. They want organized paperwork and for you to be prepared to discuss your financial situation. Good 3rd party negotiators are usually prepared and know the requirements of individual lenders and that can come in handy but they are not necessary if you know what you’re doing. Over 50% of foreclosures occur because people never call to negotiate. Why is this? I can only surmise it’s due to a few things including embarrassment, fear of the unknown and maybe time constraints. You would think people would be more proactive but many people have their personal reasons. I understand. These are the ones who hire people like me to handle their modification. In summary, paying up to $3500.00 when you are struggling to make your payment doesn’t make sense if you have the information to do it on your own. If you feel you can’t go solo then shop it and do your homework. Ask for references and make sure they are legit or pay a fraction and utilize my support services. See, there’s my angle!

2. Don’t be embarrassed because you are in this position.

We are experiencing a housing bubble and financial crisis that is rapidly approaching the severity of the great depression. Guess what, you are not alone. 1 in 10 homes are at least 1 month or more behind on their home payment. Values have plummeted and job loss is through the roof. If you used your home as an ATM machine then so be it. Everybody else did too. When the fed, under Alan Greenspan lowers the rates to 00% then there is something seriously wrong here. When you could qualify for a million dollar home because you had decent credit and could fog a mirror then there is more to it than you just borrowing more than you could afford. When your neighbor pulls in the driveway with a new 7 series BMW and makes 30,000 per year, there’s a problem. I am as guilty as you. I bought 7 homes in one year, big cars and all the trimmings and guess what, when my business started to turn, I couldn’t liquidate fast enough. In fact I got stuck on my biggest home and was forced to sell short. So if you’re embarrassed, now you know my story. Not to mention, I’m in the industry and supposedly the professional. We all got caught up in it and gave the economy and GDP a huge boost but now it’s over. Fun while it lasted, yes, but now it’s time to get proactive. Understand 1in 10 is in your position so get over it. There’s no time to be embarrassed or sulk. It’s time to call your lender and start to save your home. You can do this.

3. Don’t wait too long to call.

Timing is critical here. People who wait or procrastinate over calling to negotiate are the ones who run out of time and lose their home. I can’t tell you enough that once a loan goes past NOD (Notice of Default) the clock ticks very fast and with these lenders being so overwhelmed negotiating with other folks just like you, chances are you’ll miss the boat. Some lenders actually require you to be late before they consider modification but it’s worth calling to get their policy. If you wait and don’t call, you can miss out on your lenders window of opportunity. Each bank has its procedures and that means if you start right away you have a better chance of fitting into their time frame.

I have several loan modifications I am negotiating right now and when I call the lender they tell me they can’t help me until my client is late. This is ridiculous but they actually need you to be late before they will even speak with me. Under the new stimulus plan lenders are asking borrowers to call before they’re late so it might be getting better. We’ll see.

4. Don’t be unprepared (must have hardship and story ready to go)

The problem most people have with their modification is because they are unprepared. When you finally get off your butt (I’m kidding and just referring to number 3) and make that first call because of the late notice you received you are probably in panic mode and your clarity is limited. This is a critical time here and mistakes can be made that can cost you a modification. The first line of defense for a lender is the dreaded customer service representative that’s paid minimum wage to screen your call. There are call centers with virtually hundreds of people lined up and taking calls from struggling borrowers. They have scripts and are required to ask a series of questions to qualify you for a modification. The biggest mistake is when people aren’t prepared and just start rattling financial numbers to the CSR who enters the data into a computer designed to spit out a denial or approval. They don’t have rate decision making ability at this level, they just ask questions and if the numbers don’t fit their model your done right there. It’s over, well not entirely, there’s a way to get back in the game but it’s tough. Anyway, when you read my book and prepare for the questions that are coming, you will more likely to get to the next level which is usually to a negotiator who comes up with new terms. Unfortunately it has to be this way due to the volume of calls. Fact, the numbers are the numbers and you can’t commit fraud but if you’re nervous and unprepared and you have someone grinding you for figures like food expenses, utilities, gas etc. there’s a good chance you’ll make a mistake and get denied. Collect the documentation, verify, compare it with your income, have it next to the phone, then make the call. CSRs prefer it and are willing to work with you and even massage the numbers. Hint Hint!

5. Don’t give too much information.

CSRs are there to gather basic information .about your situation and that’s it. When you call and go babbling about trust and retirement accounts and all your liquidable assets, all you’ll hear is the CSRs fingers going nuts typing this to your file. This info goes in with your numbers and will be used by the negotiator to make a final decision. What the lenders don’t know won’t hurt them. I’m not telling you to lie here, but I’m telling you to simply let them run the call and ask the questions. Answer to the best of your ability and don’t elaborate. It won’t help. When I deal with a lender I have not spoken with yet, I actually make a point to be vague and feel out the call. I will give numbers but will leave outs by saying “I’m not sure about the accuracy of these figures and they could change”. What this does is lets the negotiator understand that some of these numbers could change and this will give you a parachute in the event the numbers don’t qualify for a modification. That’s one advantage of using a 3^rd party to handle the negotiation. We can play ignorant and pretend we need to verify some numbers with our client. You can read my scripts in the manual to understand this technique better. Again I’m not telling you to commit fraud but variable expenses are variable expenses and if the difference of you getting modified is because your meals and entertainment expenses needed to be 500.00 instead of 600.00 then it’s worth it. Get it?

6. Don’t be overly aggressive and pushy.

One of the biggest fatal flaws I hear about is some people call angry and abusive. That could be a personality trait some people have in this situation. I can tell you it’s a huge mistake. First of all you’re talking with a person who has nothing to do with your situation. He/she did not put you there and they don’t deserve to be verbally abused. Chances are if you loan is with a major lender then the person you are speaking with has more than 5oo files on their desk at any given time. If you blast them, thinking you will get somewhere you are going to be disappointed. Here’s the secret of the day. The nicer I am to these people the more they actually work the numbers to help my clients. This sounds impossible considering they work for the lender and the call is being recorded but I kid you not. I have had so many negotiators tell me the numbers don’t fit and we should do this or that and bam, all of a sudden it’s approved and moving on to the next level. I have trouble believing this myself but I truly think these folks are here to help and there is no one with more knowledge about the process for that lender than the CSR. Be nice and you’ll get farther.

7. Don’t negotiate with the first CSR you speak with.

This is a technique I use when I’m calling a lender for the first time. I gather the client’s financials and make my first call. Most CSRs are trained to immediately start asking questions and gather numbers and do the data entry. This first call for me is strictly a fact finding mission and a what if scenario session. I ask questions and am very vague as to the info I’m giving even though the numbers are by my side. With this technique you will find out several important things. How late you need to be, what the lender can do for my client and where the numbers need to be. I have called as many as 4 times to find out what’s required and what my options are. Each CSR is a wealth of knowledge and in this game knowledge is power. Once I feel I have what I need then I give actual numbers.

Note: Some lenders want to see that your income is higher than the expenses each month and some are the exact opposite. Doesn’t make sense does it.   You would think if there was a positive balance each month you wouldn’t need a mod but that’s not how some lenders work. Countrywide likes to see that you have, after all expenses some income left over. If you are short each month, there’s a good chance you will be denied. Strange! 

8. Don’t be over willing to take the first offer.

Offers are not set in stone. Many banks don’t put their best foot forward and there’s some wiggle room here. The best negotiating scenario is when you have a second mortgage. The second is in a subordinate position and it’s in their best interest to save this home, otherwise if the property forecloses they could stand to lose everything. I have had several offers on seconds that I have re-negotiated. One stands out. The interest rate was 11.5% and they sent an offer of 9%. Ridiculous, I said and wrote a letter telling them it was in their best interest to drop to 5% or the borrower was going to default. 2 days later we received a new offer. 5%, for a savings of 420.00 per month. That made my client very happy. If they are willing to modify then why not ask for a better deal. All they can say is no right?

9. Don’t take no for an answer (tricky)

You’ve gathered all your data, you’ve read my book, gained experience and confidence and now you’re ready to set the world on fire. You pick up the phone and provide all your data and POW! The CSR tells you don’t qualify.   What-- I’m going to kill Dave Greek. That @*!$@%#&@. Don’t worry, we get denied every now and again also. The key here is not to give up. You need to get back in the game and if you were smart you probably learned why it was denied. Bottom line here is if you have a legitimate hardship and the payment is unmanageable, you should be able to negotiate the terms of your loan. There’s several reason you could be denied. You make too much money, you make too little money, you are not late enough, you have a rental and it’s not your primary residence. You could have an option ARM resetting and you already pay the 1% payment. How could the bank go any lower? In that case they can’t but there’s something you can depend on and that’s change. As this crisis progresses, new legislation is coming into play every day. Just last week we have Obama’s stimulus plan that just opened the door for a new wave of mandatory modifications. 3 weeks ago there was no chance for some folks and now they are enjoying new rates. Also lenders change their tune constantly and bring about new guidelines designed to help stave off foreclosures. About the only thing we have not seen is aggressive loan balance adjustments. Apparently it’s an accounting nightmare and virtually impossible to manage new loan amounts. Judges however have some power over this if an individual is seeking Chapter 13 reorganization. In fact judges don’t even need lenders approval. This is new as well. Now if you were proactive and took my advice from number 3 above and were denied, you still have time on your side. We have also resubmitted a few weeks later and adjusted some of the non-fixed expenses and received an approval. Either way, don’t get discouraged and start ripping out the toilets and selling them on EBay. Just keep informed and know your state laws with regards to foreclosure and do everything you can to re-negotiate. Time and education could make a big difference here. Call us if you are denied and we’ll get proactive together.

10. Don’t call your lender until you read my book first.

My full loan modification book is packed with everything you need to modify your mortgage without the help of an expensive loan modification company.  There's no reason to spend $3500.00 to an attorney based modification company that may or may not know exactly what they are doing.  In fact as of this writing I have heard this week alone of 2 large attorney based modification companies who have shut there doors because of severe violations from the state they operate in.  Its ugly, trust me and the lenders want to deal with borrowers directly anyway.  My book shows you how and going into battle with this information puts you on a level playing field with the big boys.  Its a very small investment and the return could be worth hundreds of thousands in mortgage payments over the life of your loan.

These tips are just a fraction of what is in my insiders guide.  Inside you will have everything you need to modify your own loan and save thousands.  We have a 90 day full 100% money back guarantee if you are not completely satisfied.  Want to see the table of contents? Click Here.

"The Insiders Guide To Loan Modification"