It has taken me months to understand why they are taking their present actions, and will try and explain it.
First of all understand this example, if one office was responsible for administering 100,000 loans in normal times lets say they had 500 employees with say a 2% (2,000) delinquecy rate.
(all made up hypothetical figures for illustrations purposes. no idea if accurate.)
Now, they all of a sudden lets say they have 30% delinquency or 30.000 delinquents, some cities such as Miami, with 20 plus per cent 3 months or more behind, foreclosure territory.
All of sudden they have become overwhelmed, Can not handle it, or hire people qualified to make decisions, etc.
They get a computer, a card table and make the file clerk a loan officer to help out. They give her files for 500 homes to handle and say good luck. Here are the rules.
This is who you are dealing with for the first three months or more.
The collection department seems to be primarily in India. Their job is to somehow
get you to send in money. They have no authority to promise or make good on any promises to you that if you just send in a payment we will extend it etc. Any payment worked out with anyone but the loan mitigation department is likely just a donation to the bank and buys you no time, no nothing.
They have to read you off a script with all the legal requirements in making collection calls. I found the when they got to verifying my last four digits of my social security number and thru in my little speech which goes like this.
Not giving you my social security number
because then i have to listen to the whole speech and since i have 7 homes in this escapade I already know it by heart.
Therefore I say let me save you and me both a lot ofttimes. We have 7 underwater loans and have them submitted for loan mitigation. We notified them we are making no payments, of any kind, ZERO
until we get something from loan mitigation so write down in my file to save all time and money, do not call until loan mitigation finalized.
Does not stop it. Slows it. Call on cell phone and regular phone both.
Since my
South Dakota cell phone is with me in AZ. (two hour difference) calls start a little after 6 am. Have had as many as three calls an hour.
The foreclosure notice came both to the rental address, i understand from renters, I never got it but also at my midwest office were payments are usually made. So if you are renting the home, the mail may show up at the rental home not just your regular do business with them address.
Also you will get two or three notices or hand written letters a day at the rental home address from people saying they want to buy your house and rescue you etc.
Next to make a long story short, if you live in the home,some loans connected with the government guarantee, it is set up so the lender is better off dollar wise taking the home back. ( see some of our link articles) on how some of this is set up. You do not have a chance with those.
Next some banks took out and paid an insurance firm to guarantee the loan. If you did not pay the insurance company will.
i have one of those.. (see my Huntington home listing) The insurance company will try to help you get an adjustment because they do not want to pay off your loan.
Again, a stacked deck, why would the bank want to adjust, take a loss and gamble on your going thru this again in a couple months.
Sell the home, Let the insurance company pay the shortage and the lender is done with it.
Your chance of an adjustment in principal or interest, almost nil.
If you qualify for some of the government rules (most wont and all investors locked out) they get paid big time, (read the subsidies) they get, for every little move they make.
The rules are set up so it sounds like the government is helping out a lot and are doing big things but in reality only a few get any help. They have purposely set so many rules on income, and how far behind, what your income is now etc...that don't count on it.
The lenders are looking for those who qualify for government help because they come out very well indeed every time on those.
If you don't qualify for their big government hand out you are just a nuisance to get out of the pile. This government program is not for you, it is big pay * (subsidy for the lender not you)
Your file is apt to get lost in this mess.
We heard of one loan officer that has 700 foreclosures on his desk.
We were dealing with one department and the other department foreclosed on one of our homes.
Be sure and always talk to the same person, and I would not really talk to anyone once it is in to the loan mitigation officer.
Some of them seem to have a timed or planned time between steps that may take longer then planned but never the less it is no less then the planned time. Often longer.
Now, there turns out to be, quite often a mistake or loss of proof who really owns your mortgage. Some of our mortgages had been sold four times. Make a payment somewhere different every few months.
Very often you think you mortgage holder is the bank. You think that is who you are dealing with.
In fact, I would ask for a copy in writing of the name of the actual person holding your mortgage ( or firm ) That will likely take them a month. Much of the time the bank is acting as and is being a loan servicing agent, do not actually own your mortgage.
They may be agreeable to your having a loan mitigation officer recommend some modifications in your favor but until the actual bank officer in charge of final decisions, makes the decision, or gets the okay from the mortgage owner who may be in a different country, nothing is predictable.
You will be a target of lots of marketing to get you to pay for help in loan mitigation.
There will be ads saying we can get you a 2% interest rate adjustment by your bank.
All sorts of claims.. Most of these are not even in the business of helping loan mitigation, they are in the business of digging up leads for the people who are.
When you call in to get information on their wing ding deal they will get all details and only interest is to sound good and then sell your name an information, typically sell you as prospect for short sales real estate people, help you get loan modified people (there are free government people that do this better) and collect Typically $10 for your lead from each of several who will be contacting you.
If is big business on the web. One site who offers to "help' and advise you for $1,000 fees is reported to have sold over 1,000 people paying them that fee.
We tell you elsewhere, even an attorney is a risky investment because odds are against you unless you are an easy qualify for a government program then they are interested in government sending them a big subsidy check of thousands of dollars and an extra $1,000 etc every so many months you continue your payments etc. read up on the government rules and payments.
Now the big reason explaining why the lenders wont adjust your mortgage much.
My 250k house that I owe 200k on will be foreclosed or short sold for 125k roughly here in the Phoenix area. They will spend roughly $4,000 foreclosing it, maintaining it pool service etc to keep it from turning green and home from being vandalized, lawn etc kept up or huge city fines, etc
They will have to pay the taxes and insurance, etc. the six months or longer it takes to foreclose it etc
Logically it seemed to me...why not just adjust my 200k loan to $125,000 at 5% (7% now) and you know I pay good, etc. and can make it on renting at those figures.
Get the home back in the earning stage and out of the financial disaster right away.
Wont happen, the bank has 30% delinquencies who are all going to say,
you knocked 50k off Harlan's mortgage, I want the same deal. All those requests for similar mitigation would be unimaginable to handle the landslide.
Particularly if the word got out, and me with a web site shoot myself in the foot because they cant do it for me because they know I would publicize it.. No significant modification of principal or even interest is expected by me.
Next article the "legal loop hole"...may save you.
