Loan Modification
What Did The Bank Do To You?
Banks Lie Big Time…Get Everything in Writing!
- Giving Your Financial Information to the Bank Is Not a Good Idea!
- Sleeping With the Enemy (The Bank) is also Not a Good Idea!
- Do You Want Relocation Money?
- Do You Need Cash Now?
- Who is On Your Side?
- Who Can You Trust?
- Save Your Credit!
- Save Your Home!
- Do You Know How to Complete the RMA? We can help for FREE!
(Request for Mortgage Assistance)
Should I Stay or Should I Go?
If you have financial issues, you must do this:
- Communicating with the Bank is Essential. There were many a day, that I would go into a families’ home to see stacks of bills lying on the kitchen countertop, unopened. Not a Good Thing.
- Ultimately, you need to make decisions before it is too late. Whether you want to save the house, save your credit, or Obtain Cash for Keys, doing nothing will not stop the sale of the property.
- How Often Should You Contact The Bank? Weekly. Most delinquent accounts are handled in “Loss Mitigation” or in the Bankruptcy Dept.. When calling you should have your Loan Number and your Assigned Single Point of Contact. Keep a Log Sheet with the Day, Time, Persons Name, Conversation Topic and Outcome of your Call.
ASK THE BANKER by: Lee Honish
Lee Honish is the former head loss Mitigator for IndyMac Bank’s HELOC division and in the past 4 years has become one of the top Short Sale Trainers.
“What are the REAL chances of getting a loan modification?”
Let’s start off by being practical: You are in one of 3 classifications: 1. Early Delinquency (30-90 days) 2. Extremely Delinquent (91-181 dys or Charge off) and 3. Current.
Early DQ (30,60 and 90 days DQ): these are the early stages of ANY default group. Remember, all of this is handled in the ‘servicing’ group. Loan files are graded by severity, in the eyes of the bank, until 91 days at 5pm the loan is still deemed ‘salvageable.’ At a full 90 days DQ 90% pull through to foreclosure, homeowners give up. typically any bank in this stage is willing to ‘try’ a loan modification, forbearance agreement or any ‘other’ specialty program they can think of. The goal is simple; push back the inevitable bad debt to make it more manageable in the future and modify anything that is salvageable.
Extremely Delinquent (91 to 181 or Charge Off): NOBODY in ANY default group or servicing group feels that this grouping of delinquent loans will be ‘pulled’ out of a nosedive to a sale date It’s only a 10% cure rate). IF YOU ARE SOMEONE WHO IS IN THIS RANGE OF DELIN-QUENCY, YOU WILL ONLY BE OFFERED (ON AVERAGE), A TRIAL LOAN MODIFICATION! Now i know there are exceptions to the rule and i know that i am painting with a BROAD brush, but let’s be realistic! I would say 10-15% of those who apply for loan modifications in this range actually get a full recast of terms and rate AND PRINCIPAL REDUCTIONS ARE JUST A MYTH WITH THE BIG 3 LENDERS!
The Trial Loan Modification: A 3-6 month term wherein the bank will request a ‘crap load’ of information which will only be used for further collecting. They are making NO ASSUMPTIONS that you will make your payments, they are simply ferreting out information about you, your job, and your personal assets for collection purposes later on. It is BEYOND RARE that a trial loan modification converts to a full recast if you are ‘perfect’ with your new payment plans. The goal of a trial loan modification is simply to get your personal information. Again, i am painting with a broad brush. There are few people who have gotten full recasts after a trial modification. However, it is VERY RARE!
Current: Do you need to be Delinquent? Do you need to be Current? Or do you need to be Charged OFF… WELL WHICH IS IT?! The truth of the matter is when it comes to a ‘CURRENT’ loan it comes down to the original type of loan that it was. Toxic debt is labeled as ANYTHING short term with interest only rates 3/1, 5/1, NINA, NO DOC, etc. If i had a FULL DOC (full docu-mentation) loan and i had a horneowner who had a reduction in their work salary, why wouldn’t i adjust their payment? I have a proven history and REAL documentation to support that infor-mation. The bottom line is, if you are current: it’s a 50-50 on how it plays out! You could easily get your chain yanked or get a NO HASSLE FULL recast of terms and rates.
IN ANY OF THESE SCENARIOS… REMEMBER THIS: If they are talking TRIAL LOAN MODIFICATION they are only offering a 1 time 3-6 month payment plan and THE BANKS ARE JUST TRYING TO GET INFORMATION OUT OF YOU! If they are discussing a FULL RECAST then you are on the right track.