Foreclosure in 92129>Question Details

Ana Karmiloff, Home Seller in San Diego, CA

Loan Modification after default

Asked by Ana Karmiloff, San Diego, CA Wed Jan 13, 2010

I signed with Mortgage Modification Solutions about 5 months ago. Just found out the default has been recorded. Working with the MMS has been like pulling teeth, and they still have nothing to show for it. Should I go with my bank who has been offering to do the Loan Mod for free, or stick it out with MMS?

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That's a good question. If your bank is offering you a loan mod and the terms work for you than you should take it, then get a refund from your loan mod company. Look for a solution that offers a permanent fix. ie. Many loan mods are for a 5 yr - 7yr term then the rate goes back up. Also see if they are willing to offer principle reduction. There is a dirty little secret that the loan mod companies don't want you to know.

1. You can do the loan mod yourself. (it's not that hard but it does require patience, some time and un-emotional persistence)
2. There is a FREE government paid resource in San Diego that will do it for you. (link provided)
3. 100% of the loan mod companies originated from starving Mortgage Brokers or starving Lawyers who saw a way to make some money in the Real Estate game again. (Ok maybe not starving because they made enough money in 2003-2006 to keep them going, but looking for a new revenue stream)

The statistics show that 74% of Loan Mods end up back as foreclosures when there is no principle reduction.... WHY? ( If you plan on staying in your current home for the next 15-20 years the stuff I typed below doesn't apply and don't waste your time reading it.)

Because after the homeowner gets a chance to take a breath and their payments are stabilized/affordable they start analyzing their situation. If they did not receive principle reducition and the are still upside down in their house (they owe more on the total loan than the house's current value) they realize they are locked in their house until the value returns which will most likely be 10 - 15 years.

This means they can't refinance, they can't use equity for home improvements and they can't sell without coming out of pocket large sums of money. There are roughly costs of 10% of the value of your house associated with selling your home so unless you have at least 10% equity you will have to pay the difference out of your own pocket. Most San Diego homeowners that are in a negative equity situation (they owe more on their loan than the house is worth) are negative 25%-65%. This means even though your loan is for $500,000 your house may be currently valued at anywhere from $250k to $400k. The value of your house would need to be $550,000 for you to break even. This is where short sales make a lot of sense.

Ana, I am certain this is a not an enjoyable experience for you but it doesn't have to be painful. The reality is there is light at the end of the tunnel not matter what direction you take. Just make sure you take a deep breath and understand the situation fully before commitiing your self and your family to a short term fix that carries long term consequences.

Best Wishes,

Web Reference:
1 vote Thank Flag Link Thu Jan 14, 2010
And , Please call me. You are definitely in need of help. I will tell you a lot about your situation if you like. I have done hundreds of them. Also I suggest going to Google Yelp and rip off report to see what you find. Also on the department of real estate website there is a warning and a large large list of scams and hundreds of companies ordered to stop doing business. See if they are there. I attached you a tool kit from the department of Real Estate websire. If you have me review your financials and can tell you quickly an outcome that is most likely. There are never upfront fees for short sales and loan mods vary state to state. I have an E Book on my website if you want. It is over 39 pages! Please really call and I will get you on the right track. There are plenty of testimonials on me on linked in! Hit my profile and you can also get my book . That is the list for you to see the DRE WARNINGS!!!! Get familiar with this site everyone!!!
0 votes Thank Flag Link Mon Jan 31, 2011
Hi Ana,
Are you saying you paid MMS?
If so you may want to contact the Department of Real Estate.
Advance fees for loan mods are illegal and have been since oct 2009 If they were in the middle they should have refunded money to you.
FYI It is a very good idea to consult a real estate attorney and a CPA prior to doing anything.
You can always do your own loan mod and if you need help go to or has more free govt links

Harold Sharpe
So Cal Homes Realty
(951) 821-8211
0 votes Thank Flag Link Fri Feb 5, 2010
OMG why are you going to an outside source anyway these programs are mandated by the government you diffidently should not be paying someone to do your loan modification. All you should need is a real estate attorney to look over the modification and make sure the bank follows the mandated requirements.
Good Luck
0 votes Thank Flag Link Thu Jan 14, 2010
Ana, of 600,000 loan mod applications, 13,000 have been approved - meaning 98% of loan modifications fail! of the 2% that get lucky enough to get one 52% re-default because the "new deal" the banks usually offer is unsustainable and is designed to suck the struggling homeowner even more dry. So, YES ask for a refund.

There are many other options available. You can download my free report on "The Truth About Mortgage Modifications" below. If you are going to try to do a loan mod do it yourself on the GOVT website Do not pay an upfront fee to anyone for any foreclosure prevention services. If it is not NO COST, NO FEE, NO CHARGE to you...RUN! Good luck
0 votes Thank Flag Link Thu Jan 14, 2010
Steve, you made the most sense but Im glad the programs are only temporary. I myself bought with ALL CASH the right way, no loans etc. Wheres my bailout? People need to suck it up and pay for what they bought.
0 votes Thank Flag Link Thu Jan 14, 2010

Contact your bank immediately and make sure they are aware of a loan modification! Your property could be forclosed on. There's a possibility the left hand of the bank has no idea what the right hand is doing.

I would have the bank do the loan mod while continually monitoring the situation making sure you don't recieve a notice of trust sale.

If you determine the loan mod is unreasonable and would like to get the facts on short sales, visit my website at

Good luck!

Chris Keller
QuestStar Realty

0 votes Thank Flag Link Thu Jan 14, 2010
I do not know MMS, however, I have delt with a number of people that did not get what they want for a modification. I my opinion a lot of these companies are paper pushers and are not doing what is in your best interest. IF a NOD has been filed, time is running out and I would contact the bank right away. No one cares as much as you do!

If you can get someone to help you for free to assist if you run into trouble that would be great. But either way contact the bank and try to slow down the foreclosure process.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee

Keith Manson
0 votes Thank Flag Link Thu Jan 14, 2010
Dump MMS and get moving fast as Sergio said.
Web Reference:
0 votes Thank Flag Link Thu Jan 14, 2010
Hi Ana, I'm sorry to hear about your default but don't give up hope. The first thing I'll tell you is anything a loan modification company offers you (for a fee) you can do yourself for free, its just a lot of work which is of course what you pay for. You should also note that if you went into contract with the company after the beginning of October they aren't supposed to collect any upfront fees (by law).

My company offers free loan modification consultations and we can tell you pretty quickly if you'd qualify for the most available type of loan mod which is the Making Homes Affordable program. Even before the new law was passed, our policy has always been to process the modification with no upfront fees (we were ahead of the curve on that!). If we succeed then we charge you and if we can't then we don't and we can help you with your other options, its that simple.

Please feel free to email or call me if you'd like me to take a look at your situation with you or if you'd prefer you can come discuss your mortgage face to face; our company is having a free loan mod workshop on January 30th in the Eastlake community. However, if your Notice of Default has been filed, there's no time to waste and you'd want to address this issue as soon as possible.

Like I said, feel free to call, I'd love the opportunity to help you out.


Sergio Casas-Silva
Safe Harbor Money Management
CA DRE License #01863531
(P) 858-405-3289
(F) 619-512-4421
Web Reference:
0 votes Thank Flag Link Wed Jan 13, 2010
Hello Ana. This is the no B.S. answer.
When was the notice of default filed? Have you considered a short sale? You will need to make a determination as to whether you want to short sale, continue a loan mod or allow the home to foreclose, but you can not do a loan mod and short sale at the same time. If you want any chance of the modification you need a good attorney. It does not need to cost too much. A good friend of mine is working on both my brothers home and my mothers home He is good and used to work with kerry steigerwalt pacific law center.

If you want FAQ on short sales visit my website I am an Asset Manager for many of the major banks and REALTOR here in San Diego. I work with many clients in your situation. I am here for free advise anytime 619-823-2120.
0 votes Thank Flag Link Wed Jan 13, 2010
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