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Ed Rocha, Both Buyer and Seller in Rocha

I need a mortgage modification, my home is worth less then I paid and the loan amount. What do I do?

Asked by Ed Rocha, Rocha Thu Feb 19, 2009

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Ed, If you have a Counrywide loan then you might be able to qualify for a modification under the agreement which was signed with the Attorney General (AG) of California, Jerry Brown. It has specific requirements which you can check out by going to the Attorney Generals web site. Google it and look for the Bank of American/Countrywide Home Loans settlement agreement. One of the settlement agreements was to re-write your loan to 80% of current market value!! That's HUGE!
Beware of the Loan Modifier.This is a totally un-regulated industry and has attorneys, Real Estate Agents and Loan brokers all trying to now get paid for working a loan mod(modification) for you. Many are using tactics such as predatory lending as a ploy to strike fear into the hearts of the lenders. Some advise you stop making payments, "squat" in your home and let the lender PROVE they really are the "holders" of the note. Good luck with both of these folks! Just beware of paying in advance for these services as their "mods" may be insignificant but are "mods" and they wish payment. I had one guy bragging to me he got a $50,000 loan "mod" for a client. Of course the client was sideways to the tune of $250,000 but HEY, he modified the loan!!
You also need to fully understand YOUR situation. Getting a 1% reduction or going to Interest only payments or even a loan reduction may NOT keep you in your house. YOU need to analyze what it will realistically take to keep your home! The default rates are outlandish--25% and UP!! None of these alledged experts could sell ANY loan with a 25% default rate! So just be careful, get a second opion on anything you are asked to sign and then pin them down on the terms of the "Mod" and make it a contingent fee, or payable upon delivery of the loan "mod" IN WRITING by all parties! Good Luck!
1 vote Thank Flag Link Thu Feb 19, 2009
Ed I am sorry, I called you Rocha, I really do know that your name is Ed.
0 votes Thank Flag Link Thu Feb 19, 2009
Ed,
There is allot involved in loan modification. If you are not currently behind on your mortgage payments your servicer/lender won’t even bother to talk to you.
If you are behind then you have a better chance of getting their attention but even then, I do not advise on doing the loan modification yourself. Many of my past clients decided to save few thousand dollars and do it themselves but they ended up making the situation only worse. You would want to talk to a Real Estate Attorney to get the best advice from.

Loan Modification Companies are cheaper option but keep in mind, loan modification is something new and almost everyone who used to the bad loans (subprime) that got us in this mess is now doing loan modification and claim to be an expert about it. But only a Real Estate Attorney who has works with Lenders knows the Law about it.
0 votes Thank Flag Link Thu Feb 19, 2009
Rocha, I would start with calling the lender that holds your mortgage. Some are offering loan modification, I know of one that a client of mine used that offered to do what they are calling a "short refi" where they offered to rewrite a new loan on the appraised value. I was having a hard time believing it was going to happen as they didn't have a hardship case and am waiting to hear if it actually did happen. They had been thru all the preliminary stages and were waiting for an appraisal the last I heard. Your question has reminded me to contact them to see just what did happen.

When you call your lender you should talk to someone in the Loss Mitigation dept. Some will help you but most will tell you, as they did to my own daughter, to first stop paying on the mortgage and that then they can talk to you.

Hope this helps.

Lynn Bowen
Domaine Real Estate
Sebastopol CA
707-695-3814 Lynn@DomaineRE.com
http://www.LynnBowenRealEstate.com
0 votes Thank Flag Link Thu Feb 19, 2009
Being upside down on you mortgage is not enough of a reason to get a loan modification, you need to show a hardship.
0 votes Thank Flag Link Thu Feb 19, 2009
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