Loan Modification: 5 Questions To Ask Your Loan Modification Lawyer

re:Ledeen

There is a new loan modification program out by end of March, this progarm is for home owner who are having a hardship and are not late on their mortgage. Regarding to the negotiation on principle reduction, thats getting tough and rare now a day, because there’s a lot of request for loan mod, and the lender are behind and don’t have the capacity. Definitely, you can try to hire a really good real estate attorney who have the experience. You can try requesting a principle reduction yourself. make sure you have a current appraisal, did you put any money down? and how long did you own the mortgage? attached with a good harship letter.
short sale are purchase by investors and investors usually flip back on the market for a profit. make sure you go onto your county gis and find out what the county assess your home at.

remember: be persistant, consistant, and patient.

sincerly,

sylvia

Always check your attorney’s bar record and the time on the bar. Also make sure to check the BBB.org to make sure the law firm is in good standings.

RE: Blossom

First and foremost let me say how bad I feel that you lost your house of 12 years.

I can only assume based on my experience that you had an OPTION ARM that started with World Savings, they were NOTORIOUS for “Pick-A-Pay” “NEG-AM” Loans.

It’s sad that you had to hire an Attorney and not get the positive results you were looking for.
Even though I got a kick of the “Madoff’s Kin.!!!” comment,
I think it’s a little harsh, why? you ask.

Well, simple. Sometimes it’s out of the control of the Real Estate Attorney’s hands, sometimes it can get to the decision maker and they may just chose not to help you. I DO think that the attorney should have done their due diligance and not taken on your case if they didn’t think they could win. They need to look at the full spectrum… easiest way to do this is to identify “key areas”

3 Qualifying Factors for the home Owner:
A. Hardship
B. Income
C. Affordability

3 Qualifying Factors for the attorney:
A. Do you have a case?
B. Do you have a case the attorney can win?
C. Is your lender currently accepting loan modification

However, I have to repeat myself (previous comments) ALWAYS, ALWAYS ask for:

A PROVEN TRACK RECORD.
Did you see examples of other Loan Modifications completed by that attorney with your same lender?

Did you meet the attorney, or did you see their credentials before committing to anything?

Did you pay any up front fees? It’s against the law now even for Real Estate Attorneys.

Big Sister, we live and learn… Thank God you still have your health, yeah it is your home but it’s a material posession.
God Bless You, Keep your head up!

Debbie Juckett, Call me so we can talk about your situation, we would take too long to communicate via this blog or email.

Cristian
949-419-8922

Christian, I’m helping a relative to keep his head above water while he waits on a buyer to magically appear in this dismal market in Riverside County, Ca. to buy his industrial property. We’ve had one meeting with a work out lawyer, but my relative insists that he can work out his own loans, because he has good relationships with his bankers and doesn’t want to waste more money with a lawyer who probably can’t be trusted anyway (his words). My concern is that I’ve heard that once you’ve approached a bank with a formal loan mod request and they turn it down, you have no other recourse if you do decide to later hire a work out lawyer. He is also worried that if he allows himself to default on the loan it will reset the payments of his other loans with that bank or possibly with all of his investment property that have floating terms. What is scary is that this building and some others have pretty much drained his finances due to vacancies and over leveraging inorder to buy himself time. He really has no money (except from my limited resources) to continue paying his huge mortgage and tax burden since his renter moved out a year ago. Actually, I think he should consider a “died in lieu of forclosure” with a forgiveness claus of any personal liability or deficiencies for the future while his building is still worth something above the note. He and his wife are also personally liable for all his loans, and he has to deal with that threat as well. So far, his realtor thinks it is still worth well above the note, but of course there has been no interest in this market so there may not be a buyer at any price for a long time and that goes for most of his investment properties as well as residential. Even leasing the space would not come close to the mortgage payment anymore. Any advice? This building is pushing him closer and closer to bankruptcy, and he is too old to recover.

Thank you very much, Christian. I have so many questions: To start…

I know this site has urged that a reputable loan mod. attorney or service will not and can not by law ask for any money up front for the actual loan modification, but a friend told me that they can ask for fees up front in the form of “document” or “research” fee. Is that something you feel is common and can/should be expected?

I’ve had one highly recommended real estate cpa/attorney and one work-out lawyer look at my relative’s situation on paper, and both say separately “this doesn’t look too difficult to deal with, and we’ve dealt with much, much worse”…(in so many words). I was at first delighted to hear this, because looking at the amount of money bleeding every month, the lack of income, and lack of market to take this commercial prop off our hands looked absolutely dismal to me. But then, it crossed my mind that this could be just what “they say” to stroke you into hiring them? Is saying that a common sales technique we should be wary of even among the highly professional? As you said…businesses are in the business of making money.

Also, can you clarify what it means in these commercial real estate contracts to be “personally liable” for the loans. It seems pretty obvious that the banks can come after other assets, but exactly under what circumstances?

We’ve heard to stop making payments, because the banks won’t help unless you go to that extreme, but how does that effect one who is “personally liable” for a commercial loan?

I would expect that if the building is worth at least the note, the bank wouldn’t come after other assets until they have taken the building back and were ultimately unable to sell it to cover the existing note? Is that a correct assumption, or can the banks take away other assets regardless of the properties value or before they attempt to sell it?

Also, by allowing a property to go into default as a strategy to prepare for a loan mod., will that indeed effect other properties’ loan terms especially those which have annual floating terms based on treasury and libor etc.. (perhaps due to the FICO score hit a default would cause, I’m guessing)?

Secondly, How hard is it to get a bank to take back a building in a “Deed in Lieu of Forclosure” situation? Is there only a small window of opportunity to do this in a stagnant and possibly diminshing market like this? I assume that once property’s value has been estimated below the note, a bank wouldn’t want to entertain a “Deed in Lieu”, and that if one wanted to use that strategy he/she should give the building back while it is still worth something? Is that a correct assumption as well?

I assume a lawyer is definitely needed for that, but how often will a lawyer be successful at getting the bank to release all “personal liability” when negotiating a “Deed in Lieu of forclosure?

Lastly, how important is it to hire a real estate CPA specialist to deal with the a real estate portfolio divestment/triage situation? My relative thinks he can just use the same firm/guy who has done his small business and personal income taxes for years, but I’ve heard a real estate cpa will work wonders head and shoulders above a general CPA. Are they indeed worth the extra money in your expereince?

Thank you, again and sorry if this is too lengthy.

The company Nationstar inc (not nationstar mortgage) gets you approved for a multiple government approved programs in 3 days. Their fees are you dont pay until you know for sure you are in a program that saves you money. They are amazing. The only catch is that they are wholesale and don’t deal directly with the public, so you would have to go through your broker/attorney. If you dont have one, contact them, I am sure they will point you in the right direction. I saved gobs of money and didnt wait 6 months to hear back, it was 48 hours. Unbelievable. Should have went to them years ago.

Nationstarinc.com

! ! ! ATTENTION ALL BANK OF AMERICA HOME OWNERS ! ! !

If last weeks national announcement from Bank of America provided peace of mind that the lender was finally stepping up to the plate to do the right thing… think again.

Yet another “Smoke Screen” yet another “Stall Tactic” to PRETEND that assistance is coming but the reality is that the assistance never comes.

I understand some of you may be going through the foreclosure process and had a hint of hope in the last few days but the reality is that the bank is not your friend nor are they willing to help.

Please read the article below.

http://www.bizjournals.com/philadelphia/news/2010/10/19/bank-of-america-gmac-to-resume.html

Hello, I’ve written on here several times and have helped out a numerous amount of people. I just want to share with you that if you don’t have access to any good attorneys in your area or would like second opinions or want the help but can’t afford a retainer fee try this (link) alternative. It’s my personal page for you to get educated and make the right decision for any legal matters. Legal insurance is needed by everyone. I clearly see this being the next insurance everyone needs. Imagine people in the 40′s-50′s when they were approached by someone who said you need medical insurance “in case” you get sick. Or automobile insurance “in case you’re in a collision”… people thought these were crazy ideas before they became mainstream. This is the next “must have insurance”… LEGAL INSURANCE. Loan Modification, Forensic Audit, Over charges on your loan documents to refinance or purchase, debt settlement, bankruptcy, IRS and the list goes on and on… Get Legal Insurance Today!

Housing is the forgotten crisis.

It wasn’t always so neglected. Early on in the downturn, the government dug deep into its policy tool kit to find answers for the collapse of housing.

They lowered interest rates in an effort to boost affordability. They took over Fannie Mae and Freddie Mac, and they told the Federal Housing Administration to lend freely. The Federal Reserve purchased more than $1 trillion in mortgage-backed securities and bonds to support housing. They approved tax credits for buyers, and extended those credits several times. They tried to get lenders to modify loans.

Nothing has worked. At least, not well enough. The housing market is still dead, and worst of all, prices are falling again.

For a while, it seemed as if housing was at least bottoming out, if not improving. The low mortgage rates and tax credits boosted sales, but only temporarily. And when sales fell back, so did prices.

Nationally, home prices are down about 30% from their peak. In some cities, such as Phoenix and Las Vegas, prices are down more than 50% from the high point, according to the Case-Shiller home price index.

According to the CoreLogic home price index, home prices fell 1.8% in September, the fastest decline since early 2009. Other price measurements tell the same story of falling prices since mid-summer. Recently, Fitch Ratings projected that prices would fall another 10% in 2011.

According to the Fed, the decline in home prices in the third quarter subtracted about $584 billion from the equity Americans have in their homes.

More trouble ahead

Since early 2006, American families have lost $7 trillion in home equity — more than half of their equity has simply vanished. Many millions, of course, have lost everything they put into their house, and more.

Years of blood, tears and sweat equity gone. Remember, for most families, home equity accounts for most of their wealth. In the past, wealth in the form of home equity has often been the ticket to upward mobility; many a small business or college education has been funded from real estate wealth.

About 11 million families — about 23% of those with mortgages — now owe more on their house than it’s worth. Before the bubble burst, that figure was about 1%. About 5 million families owe at least 25% more than what their house would sell for; they are so far underwater that it could take a decade or more to regain any equity.

Another 2 million families could go underwater if their house loses 5% of its market value.

The impact of that much lost wealth could be severe if it continues, but the most recent declines haven’t had any visible impact on the economy. Housing remains invisible.

Rising housing wealth helped drive consumer spending in the middle of the last decade. The best guess by economists is that consumers will spend about a nickel more if their housing wealth rises by $1, or spend a nickel less if wealth falls by a dollar. The bubble boosted consumption by about 6 trillion nickels. .

When prices started to fall in 2007, consumers cut back on their spending, which helped to push the economy into a deep recession. Lately, consumers have been spending more freely, but with prices dropping again, consumers might get tight-fisted.

The upper middle class and the rich, of course, haven’t slowed down. Spending isn’t as volatile for them as it is for the rest of us. Their holdings of stocks, mutual funds and other financial assets are worth more than their home equity, so they feel richer than they did a year ago.

Not so for those in the middle or bottom of the income scale, who have fewer financial resources to buffer themselves from economic shocks. For them, the recession never ended. And it might be getting worse.

Rex Nutting is Washington columnist and international commentary editor for MarketWatch.

I need an attorney in Broward County, Florida that is reputable and will help with the after effects of the Loan Modification.
I have a loan modification it increased my mortgage payment by $600 my income reduced by $24,000. Now I can’t pay my mortgage and I’m two months behind.
The attorney I’ve contacted doesn’t call me back. My friend who is a foreclosure attorney just stated to call and complain…But now I’m really worried.
Need a reliable attorney….SunTrust is not trust worthy.

Hello fellow homeowners, it’s been some time since I’ve posted anything on this site.
I wanted to keep everyone updated on what I’ve been up to and what has changed in the industry.

LOAN MODIFICATIONS: Loan Modifications are still being offered through most major lender.
GUIDELINES: Guidelines have not changed other than the lenders are now using the NPV (Net Present Value) to evaluate your property evaluate and see if it makes sense for the investor to either foreclose or offer a modification.

Loan Modification best possible outcome:
2% STEP RATE PROGRAM:
2% fixed for 5 years
3% year 6
4% year 7
5% year 8
5% for the remainder of the term.

Or
FIXED: (varies from 2% – 4%)
3.5% (average) fixed for the life of the loan.

PRINCIPAL REDUCTION: Principal Reductions are still in play depending on the lender.

DENIAL:
Loan modification denials are on the rise. We’ve seen an increase in loan modification denials over the last year. Investors, banks, servicing companies are denying more and more clients each day. What we find disturbing is that the lender won’t tell you specifically what the reason for the denial is. Most lenders will send you a letter stating that you’ve been denied due to one or more of the following reasons:

Insufficient Income
Paperwork filled out incorrectly
Paperwork not submitted in time
Deadline wasn’t met
Net Present Value
Not participating with HAMP
Not participating with any incentives from the government

These are some of the reasons a denial could have taken place. However, what is disturbing to us is that the lender will send you these reasons and a denial notice after you’ve been “approved” or even after the “trial period” has been met! WHAT?

Last I checked “APPROVED” doesn’t leave much room for error.
“TRIAL PERIOD” leads to believe that you are already approved and a trial period is to confirm and verify that you will be able to make your new payments on a loan modification.

If you’ve been a victim of the lenders negative practices, contact me. We can help.

Best Regards,
Cristian Montalvo
Senior Mortgage Specialist
Toll Free: 877-762-0702 ext:8922 | Direct Line: 949-419-8922

I lost my job and was unemployed for 5 months. My new job now pays me $40K less that my old job and I am $1200 short each month on my budget. I applied for a loan modification and was denied. The reason my bank gave was because “housing debt ratio to income deemed sufficient”. I have a 1st mortgage and a heloc and the combined payments including escrow are 56% of my monthly income(heloc payments are interest only). My home is probably now work 65% of what I owe on it…
Can I now go to an attorney and reapply or what are my options?

Since I didn’t get a call from you I’ll explain via this blog.

Yes, you still have options. As long as the house has not sold you can still do something about your mortgage situation. In some instances even if the house has sold there are methods of getting it back.

OPTION 1: LOAN MODIFICATION

Okay back to your questions. You can always re-apply with a reputable Real Estate Attorney. The bank will tell you different they will sometimes say that you can only apply once and that is it… that is far form the truth, many of my clients have tried and failed 2-3 times before coming to me for professional help. Understand that when you engage in loss mitigation or negotiations with the lender they are more likely going to take advantage of you because you may not have the experience or know-how to get the job done.

What I always tell my client is that if you don’t know your legal rights then you have none.

As you may already know, it can be very difficult for you to engage in a loan modification on your own. Many homeowners have tried to negotiate their modification on their own and found very little success. It can be very frustrating: the lenders do not return your phone calls; you are often passed from one rep to the next, to another. When you finally get in touch with someone, you are told the paperwork is incomplete or never received, when in fact you already sent it. Most homeowners do not have the know-how or the time to complete the task at hand.

When you retain a real estate attorney for loan modification, you can rest assure that your case is being handled properly. Your file will not slip through the cracks because we have an ongoing relationship with your lender. We have ongoing relationships with Lenders, Underwriters, Trustee Corporations and Investors. These parties prefer working with attorneys to come to a quick and positive solution for both the lender and the homeowner.

That covers option 1 which is a Loan Modification submission with a Real Estate Attorney.

OPTION 2 LITIGATION:

If you feel you’ve been given the run-around….
“Send me this”
“Send me that”
“We didn’t receive your paper work”
“The paperwork was incomplete”
“You didn’t send the paperwork in time”
“You don’t qualify because you make too much money”
“You don’t qualify because you make too little money”
“We can’t help you because you’re current”
“We can’t help you because you’re behind”
Etc. etc. I call this “the run-around”

The purpose for the run-around from the lender is for you as a homeowner to:
A. Get discouraged and simply give up and no longer pursue a loan modification
B. For you to simply keep making those high monthly payments.
Either way the bank wins.

Lender Litigation:
A Lender Litigation is the ability to sue your lender for violations, broken promises, and their unwillingness to help. Suing your lender may be beneficial to pursue if you have tried for many months for a loan work-out and have gotten nowhere. A Lender Litigation or suing your lender may be even more beneficial if you are facing foreclosure and you have been denied for a loan modification after many attempts. Based on the evidence and detailed timeline of the events that have occurred during your personal experience with a traditional loan modification, we can build a case and see if we can file a complaint with the courts and pressure your lender for a immediate settlement for a loan modification approval.

I hope this helps all of you struggling homeowners to accomplish a successful loan modification.

Should you need any further assistance or information please feel free and contact me for a complimentary consultation.
Call me Toll Free: 877-762-0702 ext:8922 | Direct Line: 949-419-8922

Obama’s Making Home Affordable Program
Declining real estate prices and negative equity continue to drive foreclosure. Many are unable to meet their monthly mortgage payments. Often one spouse has lost his/her job. They have depleted their savings and retirement fund hoping that the economy will turn around. The current problem in the housing market has affected 6 out of 10

The Obama Administration is offering the Making Home Affordable (MHA) Program to as many as 7 to 9 million homeowners who are making good-faith effort to meet their mortgage payments. Currently, homeowners who are upside down or owe more than 80% of the present value of their house find it very difficult to secure refinancing. This program will allow 4 to 5 million responsible homeowners whose loans are owned or guaranteed by Freddie Mac and Fannie Mae (GSEs) to refinance over time.

President Obama has allotted $75 billion for Home Affordable Modification Program. This program will help stop millions of forecloses and aim to keep families in their homes. The Treasury Department will work with GSEs, FHA, the FDIC and other federal agencies to implement a comprehensive multipart strategy, which have the following features:

• A Home Affordable Modification Program to Reach Up to 3 to 4 Million At-Risk Homeowners
• Clear and Consistent Guidelines for Loans Modifications
• Requiring That Financial Stability Plan Recipient Use Treasury Guidelines for Loan Modifications
• Allowing Judicial Modifications of Home Mortgages During Bankruptcy When A Borrower Has No Other Options
• Requiring Strong Oversight, Reporting and Quarterly Meetings with Treasury, the FDIC, the Federal Reserve, and HUD to Monitor Performance
• Strengthening FHA Programs and Providing Support for Local Communities

The program aims to reach homeowners who are at risk, i.e., those who are suffering serious hardships, decreases in income, increases in expenses, and those who are paying combine mortgage loans higher than the current market value of their house. Delinquency not be a requirement for eligibility, hence, homeowners who are delinquent or non-delinquent in their mortgage payments are eligible to participate. However, only owner-occupied homes are qualified. Homeowners with high total debt can qualify , however, they must agree to undergo HUD-certified consumer debt counseling.

The Home Affordable Modification Program has the goal of reducing the amount of mortgage payments to sustainable level. Lenders must work to bring down the monthly payments of borrowers to no greater than 38% of the household income. To reach this target, first, the interest payments will be reduced to as low as 2%. If the debt to income ratio is still above 31%, then the lenders should extend the term up to 40 years. Third, they can forebear the principal at no interest, until the target is reached. Treasury will share the costs of reducing the payment from 38% debt to income (DTI) to 31%, dollar for dollar.

The housing crisis has resulted in many mortgages becoming upside down. The mortgage is said to be an upside down mortgage when the value of the property is less than outstanding balance. If your mortgage is upside down you should consider lien stripping.

If your mortgage is upside down, lien stripping can be an effective way to address the situation without losing the property to foreclosure. Lien stripping is the process of reducing a secured claim to the value of the underlying collateral.

Chapter 13 Bankruptcy
Chapter 13 Bankruptcy has a provision for lien stripping. Current bankruptcy law allows a debtor to “cram down” the principle on a mortgage to fair market value. However this is limited to investment properties. This rule cannot be applied to your primary residence, or “homestead”. Specifically, 11 USC 1322 states that someone filing a Chapter 13 bankruptcy plan may modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor’s principal residence, or of holders of unsecured claims, or leave unaffected the rights of holders of any class of claims. In a cram down, the bankruptcy court splits the outstanding mortgage balance into two parts. The amount of debt equal to the current appraised value of the security is treated as a secured claim, which the debtor must continue to pay. The amount of debt in excess of the current property’s value becomes an unsecured claim, which is usually not repaid in full.

Benefits
The cram down provision has a threefold effect. First, it reduces the amount of the secured claim to the value of the property at the time the bankruptcy plan is confirmed. Second, it provides the debtor with more time to pay the loan. Third, it reduces the value of interest to the prime rate.

What we can do for you
The lien stripping process is complex and involves numerous forms. The attorneys at Joel Feinstein Law can help you with lien stripping.
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