Stop Foreclosure Answer

You, your lawyer or the expert you hired may be working with your mortgage company to get your mortgage modified and your mortgage payment be lowered.  Or – You may have legal action pending against your mortgage company.

Yet your mortgage company continues to send you notices saying that you are delinquent on your mortgage.  Or – Representatives from your mortgage company may call you on a regular basis about your late payments.

You may wonder why these notices or calls are coming.

The reason is simple.  Your mortgage company is disorganized.  There is no communication between departments and even within the same department.

Their computer system is programmed to send the notices that you are behind on your payments on a periodic basis.  These will continue to be sent until your payments are up to date and your account is current.  When your action started, no one turned the system off.

The same is true with the phone calls.  The representatives making the calls are unaware that a modification is in process or that a law suit may be pending.  They are just doing their job.  They were never notified not to call because you were seeking a modification or that legal action was pending.

It is sad that your mortgage company is wasting so much time and money on these notices and phone calls.

Your only hope in getting them to stop is the next time a representative from you mortgage company calls you, explain to them what is happening on our case.  Ask them to update their system to reflect this.

That may bring a stop to the calls and the notices.  However if the representative doesn’t do anything after they get off the phone with you, nothing will happen.

You can also write a letter to your mortgage company about this.  If you do, send it to the manager of the department that you, your lawyer or the expert you hired are working with.

You have two choices when you get a notice or a call.  You can either look at them as a nuisance or you can chuckle that your mortgage company is wasting more money.

Much Success,

Mark Elkins

You may have never thought of this. There are probably thousands of lawyers in your area. However, there are very few who specialize in helping people who are facing foreclosure. Of those few there are a smaller number skilled at getting the best outcome for their clients.

If you are facing foreclosure and want the best lawyer in your area to represent you how do you find them?

First – you don’t call a lawyer who handles real estate closings. While they may be great at real estate closings, they may never have worked on a case involving foreclosure. Their learning curve may be just as great as yours.

You don’t call a criminal lawyer. They specialize in criminal law. They may have no desire to look at the laws dealing with foreclosure.

You don’t contact a lawyer who does estate planning. True – they do deal with finances; however, they focus on maximizing a person’s estate and probably have never looked at what happens when a mortgage company starts the foreclosure process.

You need a lawyer who spends their working hours every day of every week on cases involving foreclosure. They need to know all they can about foreclosures. They need to be able to look at your unique situation and figure out the best course of action for you to get the upper hand on your foreclosure and to protect you and your family.

You find this lawyer through research. You call the Bar association in your county and you ask them for the names of the lawyers who specialize in helping people with foreclosures.

Then you find out about each one. How successful are they? Do they do a good job for each of their clients? You can get some general information on this form the Bar Association. Then you ask lawyers that you know or other people that may have had contact with them.

When you find two or three whom you feel may do a good job for you, you contact each one. Explain that you are facing foreclosure. Say that you want to find out a little about their services. Ask for a free consultation. This may last for 20 to 30 minutes.

In each consultation tell them about your specific case. Find out how they would handle your case. What would they do for you? Also find out what they charge and how they get paid for their services?

After you have met with each one, take some time and reflect on your impressions of each one. Pick the one whom you feel will do the best job for you.

Any lawyer you hire may charge a fee upfront to start working on your case. This is a common practice.

In my EBook for people facing foreclosure, I go into this in more detail. You may want to check that out.

Much Success,

Mark Elkins

It is common for those of us who work with people facing foreclosure to forget that many people may not understand what some of the terms we use mean.  At times they may be afraid to ask because they feel that they should know.

Well, let’s clarify one of those terms today.

If you are facing foreclosure, one term that you will hear on a regular basis is Loan Modification.  What is a Loan Modification?

A Loan Modification simply is where your mortgage company and you agree to modify the terms of your mortgage.  Normally in a modification the monthly payment is reduced.  Your mortgage company will do this only if they and the investor thought that by reducing your monthly payment they would make more money than they would if they foreclosed on your home.

Let’s start at the beginning.

When you got your mortgage, your mortgage company loaned you a certain amount of money at a specified interest rate.  You agreed to repay the money they lent you by making monthly payments over a specified period of time until all the money and the interest due was paid.

Initially you had no problem making the monthly payments.  However, a crisis hit – either you lost your job or a death or a divorce occurred or a medical crisis came up or some other financial crisis developed – and you no longer can continue to make the monthly mortgage payment that you agreed to pay.  You start to miss payments.

Your mortgage company notifies you that you have violated the terms of your agreement.  They start to foreclose on your property.  The law requires them to do this.  However, they don’t want to because they and the investor will lose money in the process.  They would prefer to help you find a way to catch up with your payments and save your home.

There are several different ways they can do this.  The most common one is to modify your mortgage.  Here they will look at the financial challenges you are having and your income.  They will figure out how much of a monthly payment you can make.

If they determine that you can consistently make that lower monthly mortgage payment for the duration of your mortgage and that will result in more money for them and the investor, they will let you know that they are willing to modify your mortgage in that manner.  You have the option of agreeing to that or trying to resolve your problem in another manner.

How does your mortgage company determine how much they will lower your monthly payment?  They look at your income and your debts and figure out how much you can afford to pay.

Until last fall there was no fixed formula to do this.  Each mortgage company figured out on their own how much they would be willing to reduce a mortgage payment.

Last fall the federal government stepped in.  When Indy Mac, a bank which had originated quite a few mortgages, became insolvent, the federal government took them over.  At that time they started to reduce the mortgage payments for people facing foreclosure to 38% of their gross income.

In March of this year the Obama Administration announced their Making Home Affordable Modification Program.  In that program, the monthly mortgage payment is reduced to 31% of a person’s income.

By reducing a mortgage payment to 38% and 31% of income, the federal government feels that most people facing foreclosure will be able to make their monthly payment consistently and save their homes.

Most times these modifications are for fixed periods until people facing foreclosure get back on their feet again.  In the Making Home Affordable Modification Program, the payments are reduced for 5 years.  Then the payments start to rise to a fixed amount set at the time the modification is agreed to.

Some time, the mortgage is increased to 40 years so that the mortgage company and the investor can recover some of the money they stand to lose by reducing the monthly mortgage payment.

A modification may or may not be the best way for you to proceed.  You should look at all options open to you.  I also recommend that rather deciding on your own consult a lawyer or an expert in helping people facing foreclosure.  They will be able to give you the advice you need on how to save your home.

Much Success,

Mark Elkins

In my blog post the other day, I let you know that the Making Home Affordable Program announced in early March is starting to ramp up.  The Treasury Department is starting to provide money for successful loan modification incentives to 6 mortgage lenders.

If a mortgage company wants to participate in the Making Home Affordable Modification Program they have to sign a contract.  In this contract they agree to follow the guidelines in the program.  They agree to modify the mortgages of eligible people facing foreclosure who want to save their homes.

The website for the Making Home Affordable Modification Program is www.makinghomeaffordable.gov.  I checked the website.  Thus far 11 mortgage companies have signed these contracts and are participating in the program.  These companies and their web sites are:

Name                 Web Site

Bank of America            www.bankofamerica.com/mha/
Chase Financial            www.chase.com
CitiMortgage                www.mortgagehelp.citi.com
Countrywide Home Loans         http://my.countrywide.com/media/hasp.html
GMAC Mortgage LLC         www.gmacmortgage.com
Home Loan Services, Inc.         www.viewmyloan.com
Ocwen Financial Corporation     www.ocwen.com
Saxon Mortgage Services         www.saxononline.com
Select Portfolio Servicing         www.spservicing.com
Wells Fargo Bank, NA         www.wellsfargo.com/homeassist
Wilshire Credit Corporation     https://www.wcc.ml.com

If you are facing foreclosure and your mortgage company is one of these, you may want to check to see if you may be eligible to have your mortgage payment lowered and have your mortgage modified under the Making Home Affordable Modification Program.  Go to this link, http://makinghomeaffordable.gov/modification_eligibility.html.  There is a simple test there which will help you determine this.

If you are eligible, I suggest that you talk to a lawyer or an expert in loan modifications.  Let them advise you on the options open to you.  They will let you know whether a modification of your mortgage under this new federal program is right for you.

You should also have them represent you.  Saving your home from foreclosure can be a long and challenging process.  You need a lawyer or expert to help you.  Even if they advise you that a modification of your mortgage under this program is best for you they can handle it all for you.  They will negotiate the best deal for you.  They also know how long it will take and can keep you informed of what is happening.  You want to make sure that you get the best outcome possible.

If the lawyer or an expert you hire recommends a better course of action for you other than a loan modification, they will guide you through that.

I will watch the Making Home Affordable website regularly to see if other companies sign contracts to participate in the Making Home Affordable Program.  As they do, I will pass their name and website along to you here on my blog.

I have written a special EBook for people facing foreclosure.  You may find this a valuable resource in getting the upper hand on this foreclosure and in protecting yourself and your family.  .

Much Success,

Mark Elkins

The Making Home Affordable Modification Program is the main way the Obama Administration hopes that people facing foreclosure will be able to save their homes. The plan is that they will save their homes through loan modifications. With these loan modifications their monthly mortgage payments will be reduced to levels that they can pay without problems.

These loan modifications rely on the people facing foreclosure, their mortgage payments and investors working together to accomplish this. The investors are the people, groups and organizations to whom the mortgages were originally sold.

The Making Home Affordable Modification Program was announced in early March. Already investor groups are objecting to this program. They are saying that they are the only ones who stand to lose in the process.

People facing foreclosure benefit because their mortgage payments are being reduced to levels they can afford. The mortgage companies are benefitting because they are paid incentives for successful modifications. The investor groups say that they are the only ones who get less. They will get a far smaller return on their investment than they had expected. The modifications nullify the contracts between the person and the investor originally signed at the time the mortgage was finalized.

Some of these investor groups are joining together to fight this legislation and to lobby against the Making Home Affordable Modification Program. They have also added that interest rates on mortgages may rise because investors may want higher returns for the increased risk they have to take on their investments.

The Obama Administration has said right along that the investors are protected. Loan modifications through this program will only be made where they are allowed under the terms of the contracts. In addition there is a test to make sure each modification is in the best interest of the investor. If it is not in the investor’s best interest, the modification is not made.

I knew that issues would arise with the Making Home Affordable Modification Program. I did not realize that they would pop up this quickly.

The Obama Administration is going to have to address the concerns of the investor groups. It is natural for investors to be concerned. After all the return they expected on their investment drops greatly with each modification. Administration representatives have to show them that they are going to benefit from these modifications. They should meet with the investor groups quickly and address each concern the groups have. They should also monitor the mortgage companies doing the modifications to make sure that they follow the guidelines of the program.

If the Making Home Affordable Modification Program fails, the foreclosure crisis in the United States will intensify. Home values will continue to drop. Not only will the person facing foreclosure lose in the process but every one of us will suffer.

I have written a special EBook for people facing foreclosure. In it I have outlined the steps you need to take right now to get the upper hand on this foreclosure and to protect yourself and your family. You may want to check it out.

Much Success,

Mark Elkins