Focus CPA Group, Inc. (562)281-1040

As foreclosure rates continue to dominate the media and the minds of many Americans, everyone wants to know who qualifies and what their options are for a loan modification. We all want a lower balance, we all want a low interest rate, and we all want the ability to keep our home and family’s secure. Basically, it comes down to your financial analysis, your mortgage statement, and your hardship. The next step is the most difficult: getting in touch with your lender.

Homeowners are against the wall. Many are as much as twelve months behind in their payments and seeing little movement towards a resolution. The banks are inundated with requests, documents, faxes, and lastly thousands of irate borrowers. Both parties want a remedy. But where do they meet. They banks say , “We have not received your package”, or “send it in and we will get back to you in a few weeks”. Weeks go by, you are late another month, and the end of the tunnel seems to continue to move further from your reach. This is the method many lenders are taking. They do not want to re-negotiate your terms. You signed a promissory note dictating payments. Why should they give you a discount and lose thousands of dollars because you cannot afford your home any longer? Would you? Probably not, unless you are the king of altruism, the bearer of generosity. But lets face it, the banks are not, and honestly speaking, most of us fall out of this category no matter how many times we go to church or give the local homeless man a few coins. This brings me to my next point. Who do I trust? Everyone is a skeptic. We have heard the stories, we have seen the frightfully terrified borrower jumping at the first chance, the first guaranteed rate from Whoknowsloanmodificationbs.com or whatever company you find online. FYI, no company can guarantee a rate, unless they work for your lender, which is no one. Just think about it: A modification is a negotiation between the two parties, you and them- bottom line! There is no guarantee except for the services rendered. So when you are frantically looking for relief, step back, take a breath, maybe even an adult beverage, and do your research! This next move you make is pivotal. Ask yourself: “what do I want from this”, “what am I willing to pay, if any, to have this done”, and lastly talk to as many people as you can. Its your responsibility, its your home, your family.

The only real way to determine a firms ability to produce and insure they are legitimate is working with attorneys. They have a license to accept advance fees. Get their license number, look them up in the state they practice in. If they are legitimate, they will be listed. They will not forfeit their license to practice law for your tiny amount of money. Only attorneys and approved DRE organizations have this ability. So if John Williams Booth is calling you saying a fixed 4.278 and it will cost you only $2000, ask him about the process, ask him his companies history, ask about his attorneys. If they cannot give you a legitimate answer to any of these basic questions, I would save your money for someone else. Once you find a company that sounds good, check them out online. Do your homework. Contrary to Alice Cooper: school is not out for summer. Here is a scenario: 200k balance, Wells Fargo, 6.7% interest rate (1290 payment+ 350 taxes+80 ins.+ 120 HOA= $1855), late 3 months, lost job( $1300 in unemployment), spouse still employed ($2000)… You may be eligible for the HAMP- the best modification on the market. WARNING: your lender may be fishing for your information to disqualify you from this program… you only have one shot at this program. This is why. The program will make your monthly mortgage payment to be 31% of your gross income less taxes and insurance. This is your debt to income ratio (DTI). They will take you down to the floor interest rate of 2%, the maximum 40 year amortization schedule. This rate stays fixed for five years, after which it adjusts up to one percent each year after until it reaches the market cap on the day you sign the new loan terms. So, this person with these figures has a DTI of 37% (You may be between 31-38% to qualify) They did it! New potential payment at a 2% for 30 years is $1304…thats five hundred dollar savings (27% savings). To get you down to that 31% DTI, they may draw your amortization to a maximum 40 years, reduce principal, put you at 2% interest rate, or any combination of the three.This is why the banks do not want to modify your loan under the HAMP guidelines. Do you see now? Under this plan, you must have a hardship, you do not have to be late, you must live in the property, and the first mortgage balance must be under 729K. So, do you qualify? Go to the government website for making home affordable to learn more and see if you lender took the TARP money. For those of us who have a non TARP accepting lender, you can still get a traditional. There is capability for your lender to modify under the HAMP guidelines. The attorney cannot force them, but there is still availibility. the traditional modification will not be as strong, but there is still relief. Your case will be contingent on your budget, hardship, and your mortgage statement. The banks want to make sure if they modify your loan you will be able to make your payments and not default again. This is why many borrowers are denied modification requests. They do not understand how the banks look at their portfolio; so many times, the homowner must seek legal representation. What to do next: use a free service, try with your lender, or seek an attorney? You need to figure this out on your own. Is the investment worth it? In the case above, I would say absolutely. The money for the 2000-3000 modification will be recouped in six months, not to mention the savings over the life of the loan. It comes down to cost to benefit. You can try with your lender- submit your package and hope for the best. Honestly, why would you gamble a great opportunity like this because you are cheap and wanted to continue to buy cigarettes and strawberry shortcake Ben n’ Jerrys ice cream? Think of the future, figure your budget, and weigh your options. If you seek legal representation, you want an experienced real estate attorney, 100% money back guarantee, and a forensic loan audit to look over loan documents for any predatory lending violations. You may be entitled to more than you think if the audit comes back positive. Can you say 20K principal reduction? Maybe you should start practicing in the mirror. Anyhow, there is a vast amount of knowledge on the internet. Talk to everyone you know, see what they are doing, see why they went this way or the other. You still have time. However, many lenders are GIVING the TARP money back, leaving thousands of Americans high and dry, excluded from the HAMP. Ultimately, you want to make the best move. If this means having to wait on hold for one month with your lender to get a response or pay an attorney’s fee of $3000, make sure this is your best move. If you do not know how to change your brakes, are you going to gamble with your life and others? Easy question. If you would like further advice you can take a look at my profile.Take care and best of luck.

Here are a few links that will assist you on your modification goals.

www.makinghomeaffordable.govwww.propublica.orgwww.loanmodificationmadesimple.comwww.themod-squad.comwww.hud.gov