Stop Foreclosure Answer

Historically when mortgage companies have reduced monthly payments in loan modifications to help people facing foreclosure save their homes, they have done it by either reducing the interest rate or extending the remaining period of time over which the mortgage was to be repaid. Several times congress has sought to change the law and give judges in bankruptcy cases the power to reduce the outstanding principal balance on mortgage.  By doing that the mortgage company would have to lower the monthly payment.

The mortgage companies have fiercely resisted this.  The industry’s lobbyists in Washington have been so powerful that they have been able to get congress to defeat this change any time it has been proposed.  

Principal Balances Reduced on 10% of Loans Modified

So it was surprising to see in the Mortgage Metrics report released by the government in September that in the second quarter of 2009 the mortgage companies reduced the principal balances on 10% of the loans they modified.  The Wall Street Journal picked up and reported this in an article in early October.  What the Wall Street Journal failed to realize and report was

Where The Principal Balances Were Reduced.

A closer look at the report revealed that the mortgage companies lowered the principal balances on 30.5% of the mortgages modified that were in their own Portfolio.  These were mortgages where they put up the money out of their own funds.  These were not mortgages that they sold to other investors and were still servicing.  On the loans that they sold to other investors and  that the mortgage companies modified they did not reduce the principal balance on any.

From my outsider’s observer’s perspective it looks like the mortgage companies reduced the principal on these mortgages to try to make sure that they would reduce the number of foreclosures on loans in their own Portfolio.  They didn’t care about the mortgages that they had sold to other investors.

What Does This Mean For You?

If you are facing foreclosure and have applied for a loan modification, your mortgage company may lower the principal balance on your mortgage to lower your monthly payment if they have kept your loan in their own Portfolio.  How can you tell if yours is in their Portfolio?  The only way would be by calling them?  If your loan was sold to Fannie Mae or Freddie Mac or if you have an FHA or VA loan, it would not be in their Portfolio.

If you have a lawyer or expert in loan modifications helping you, they can find out who the investor on your loan is.  If in a loan modification that your mortgage company offers you, you find that they are lowering your principal balance, consider yourself fortunate.  You are one of the very few who has gotten this concession.

Remember – you should take control of the process to get a loan modification.  If you hire a lawyer or an expert in loan modification to represent you, they are working for you.  You should strive to know as much about the process or more.  My EBook has much information which you might find useful.  You can find out more about it by clicking Stop Foreclosure.

Much Success,

Mark Elkins

Foreclosures are having a disastrous impact on our large cities.  Many of us have heard how they have decimated Detroit.  Yet it is hard to picture how bad the problem is by just reading about it and not actually seeing firsthand what is happening.

When the problem strikes closer to home, then we can really see how devastating foreclosures are.  We really begin to understand that foreclosures impact not only those who have had to vacate their homes but also those who continue to live in the area, adjacent neighborhoods and the city itself.

I live in a suburb of Chicago.  I have seen how in different areas of Chicago where there are quite a few foreclosures

Everyone Loses

Let me tell you what has happened in Chicago.

• 1/3 of the single family homes foreclosed on in the last 3 years were unsold at the end of 2008.
• The people who continued to live in the areas where these homes are have had to deal with boarded up and unsafe homes.
• Those homes that do sell sell for 30% less than what was owed on their mortgages.  The investors who put up the money for these mortgages took a big loss.
• People who continue to live in areas with a large number of foreclosed homes have found that they cannot afford to move.  The values of their own homes have dropped so much because of the foreclosures in their area that they cannot get enough for them.
• Neighbors try to band together, pick up garbage and keep the areas around these homes presentable.  Frequently it’s a losing battle.
• Many of the foreclosed homes that do sell are bought by investors.  Rather than repairing and renting them the investors keep them boarded up.  They plan to hang onto them only until the real estate market comes back and sell them at that point.
• People looking to buy a home avoid looking at homes for sale in these neighborhoods because they fear what may happen to them.

It Just Does Not Make Sense.

We now have blighted areas which will remain that way for years to come.  Everyone has lost.  The homeowner who was foreclosed, the investor on the mortgage, the people still living in the neighborhood, the adjacent neighborhoods and the city itself.

I wonder how many of the mortgage companies really tried to help the original owners save their homes from foreclosure.  Wouldn’t helping them do this have been better than what has happened? 

It’s unfortunate but the mortgage companies will never be held accountable for the problems they have helped create.

If you are facing foreclosure, my heart aches for you.  I know the struggle you will have trying to save your home.  I want you to know that saving your home is worth it.  Your family will appreciate it.  Your neighbors will appreciate it.  Your city or town will appreciate it.

Don’t try to do all the work yourself.  You will get both frustrated and discouraged.  Get help as quickly as you can.  Hire a lawyer or an expert in loan modification.  Also learn as much as you can about the steps you can take to save your home.  You might want to check out my EBook.  You can find more about it by clicking Stop Foreclosure.

Much Success,

Mark Elkins

It never ceases to amaze me.

Here we are in the second year of this foreclosure crisis. We have heard these horror stories of how people who are facing foreclosure have been taken advantage of by their mortgage companies. They have filed applications for loan modifications. Their mortgage companies take forever to review them. The companies lose paperwork over and over again. The only way some get their mortgage companies to act is by letting the public know what has happened. They have had to let the public know how they have been victimized by their mortgage companies before these companies act. Then they agree to modify their loans at the last minute right before the auction of the property is to take place.

Yet most people persist in trying to work with their mortgage company themselves. They deal with them directly. They submit their applications on their own. Then they follow up. For some reason they think that they will be treated differently. Their mortgage company will take care of them.

There Is No Reason for Them to Believe This

It is just false hope.

Some may believe that they are not worthy of being helped. They feel that they have screwed up and there is no reason they should be allowed to keep their homes.

That is Pure Hogwash

Everyone facing foreclosure is entitled to help to save their homes. Since they are not experts in the foreclosure process and do not know the best way to get a loan modification, they need help from people who know the process. They need help from people who know what they are doing. That is either a lawyer or an expert in loan modifications.

I have seen and heard of far too many cases where people wait too long to get this help.

If you are facing foreclosure, please, let me say that again, please don’t represent yourself. Your family deserves better. Find a lawyer or an expert in loan modification to help you. Check with your local county Bar Association for the names of lawyers who specialize in foreclosures. To find an expert in loan modifications click on this link, http://www.hud.gov/offices/hsg/sfh/hcc/fc/. That will take you to the HUD website and you can find an agency and a counselor in your area.

If you want more information on the process and what you can do to avoid foreclosure, check out my EBook at Stop Foreclosure.

Much Success,

Mark Elkins

Prior to elections every year we hear politicians putting their own spin on the truth.  Well, let me tell you – mortgage companies are doing it too. 

If you read the posts on this blog regularly you know that I have been very critical of Bank of America’s performance in the Making Home Affordable Loan Modification Program.  Through the end of September they had approved trial loan modifications for 10.8% of those eligible for the modifications.  (The actual numbers were 94,918 trial modifications out of an estimated 875,917 eligible for them.)  Their performance is the worst of all of the large mortgage companies participating in the program.

So you can imagine my reaction when I saw the spin Bank of America put on their performance in a press release on October 29.

The subtitle of the press release was

Company Continues Momentum in Comprehensive

Effort to Help Struggling Homeowners

The main points Bank of America mentioned in this press release were:

• They had surpassed their target of offering trial modifications on 125,000 loans by November 1.
• They have initiated nearly 20% of all of the trial modifications in the Making Home Affordable Program.
• Their employees have contacted nearly 600,000 people facing foreclosure and have offered trial modifications to 200,000 of these.
• Their employees are working hard to keep as many people facing foreclosure as possible in their homes.  

Anyone who read this press release alone would commend Bank of America for the job they are doing.  Their statistics look great.

Let’s Look at How They Spun the Numbers

I am taking these from the Servicer Performance of the Making Home Affordable Modification Program through September of 2009.  You can read the report by clicking http://www.treas.gov/press/releases/docs/MHA%20Public%20100809%20Final.pdf.  Remember – These are figures on the performance of all the mortgage companies participating in the program. 

• Out of the estimated 3,100,305 loans which were eligible for loan modifications 875,917 were through Bank of America.  They had 28.3% of the total.  45 companies are participating in this program.  Bank of America had far more of these loans than any other mortgage company.  Much of that is due to the loans that they picked up when they acquired Countrywide.
• They extended offers for trial modifications on 156,120 of these loans.  That is 17.8%.  In their press release, they said it was 33% (200,000 of 600,000).  17.8% is quite a bit less than 33%.
• Trial loan modifications had started on 94,918.  That is 10.8% of the estimated 875,917 loans that were eligible.

There have been more complaints about how poorly Bank of America has been handling applications for loan modifications than any other mortgage company.  In fact there was an article in the South Florida Sun-Sentinel on October 29 that hundreds of people facing foreclosure in Florida have filed complaints with the Attorney General of Florida. These complaints were over their failed or stalled attempts to get loan modifications through Bank of America.  The total number of complaints thus far has been 452.

Does it really sound to you like Bank of America is working hard to help people facing foreclosure save their homes? 

If you are facing foreclosure and the Bank of America is your mortgage company, beware of the spin that they have put on what they are doing in the Making Home Affordable Modification program.  Although they claim that their employees are working hard to help as many people facing foreclosure as possible to save their homes, their track record so far does not support their claims.

With Bank of America you will need a lawyer or an expert in loan modifications to help you.  If you try to represent yourself there is too great a risk that you will be taken advantage of. 

Also – learn as much as you can about the foreclosure process and what steps can be taken to save a home from foreclosure.  The process and the steps that can be taken are not complex.  This knowledge will help you tremendously in knowing what is happening each step along the way.  You will also be able to work more closely with the lawyer or expert you hire to prepare your case.  A good source of information is my EBook.  You can get more information on it by clicking Stop Foreclosure.

Much Success,

Mark Elkins

Jude Elliott and Joanne Hexom are at the end of their rope.  Their mortgage company, JPMorgan Chase, is not helping.

They have owned their home in California for eight years.  During that time they made every monthly mortgage payment on time.

Jude had been a speech and language pathologist in a local school district until a severe medical condition forced her to stop working two years ago.  Since then she has received monthly disability benefits.  However, these have been about 50% of what she was earning as a speech and language pathologist.

Joan is a high school teacher.  She continues to teach. 

The drop in Jude’s income has had a severe impact on her and Joan’s finances.  They first used their savings to make their mortgage payments, property taxes and insurance.  Once the savings were gone they did something no one should do.  They used credit card advances to make ends meet.

Late last year they realized that they were reaching the end of their rope.  In January they applied with their mortgage company, JPMorgan Chase, to have their mortgage reworked.   Since then they have submitted four more applications.  Each time the people at Chase have either asked for more information or have lost documents they have submitted. 

Most recently they asked for proof that Joan was still employed as a teacher.  This had been submitted to them previously.

Then their request was denied.  Supposedly their combined income was too high.  They have disputed the way their income was calculated and are continuing to fight for a loan modification and a lower monthly payment.

The stress they have been under has had a negative impact on Jude’s condition.  It also has started to make Joan sick.

They were able to continue to make their monthly mortgage payments through September.  They weren’t able to make their October payment and fear that Chase may foreclose on them.

Their experience with Chase highlights two things all facing foreclosure should be aware of:

• Mortgage companies are routinely losing documents.  Make sure to keep copies of everything you send them so that you don’t have to waste time going out and getting duplicates of what they lost.
• Mortgage companies can make mistakes calculating income.  If they say that your income is too high and deny your application for a loan modification, don’t accept what they tell you.  Double check them on it or get someone to double check it for you.

Jude and Joan have been trying to get Chase to modify their mortgage since the beginning of 2009.  They have sent much paperwork to Chase.  Can you see why I recommend each person facing foreclosure get help from a lawyer or an expert in loan modification?  Delays like this occur regularly.  Many people trying to deal with their mortgage company themselves would have a tendency to give up, not pursue a modification and allow the foreclosure to go through.   Look at how it can affect them and their families?

If you are facing foreclosure, you need to know as much or more about the process and what you can do than those people at your mortgage company.  It won’t take much study for you to become this expert.  One good source of information is my EBook.  You can check it out by clicking Stop Foreclosure.

Much Success,

Mark Elkins