by The American Homeowner is being bombarded on all sides with advice and information from a myriad of sources regarding hiring Legal Counsel to represent them in negotiating a Loan Modification with their current lender.
Recently, the Obama Administration has taken initiative through recent legislation and programs such as Hope Now to help homeowners in toxic mortgages modify their loans to achieve lower payments and financial stability. The great intentions of the President and his staff are laudable, however are no cure-all.
Lenders haven’t taken the initiative in modifying loans; often, they will take and document a borrower’s financial information so the borrower can be disqualified for a loan modification. To qualify for a Loan Modification, your application must be pigeonholed into a very narrow set of parameters. Your DTI (Debt-to-Income) Ratio must fit within guidelines. In a recent article on mortgage backed securities in The Scotsmans Guide, it was established that the average American’s mortgage is no longer held by the original loan servicer, but rather has been bundled and sold as multiple securities to multiple investors. Loan Servicer (lender) guidelines change continuously based on changing investor guidelines. So if you have the exact financial situation as your neighbor, and a week ago, he successfully got a loan modification, you may actually not qualify even if you have the same exact financial situation!
The cold, hard fact of the matter is this: Your lender will not give you the best possible terms on a loan modification. They are interested only in protecting their bottom line. Most Lenders have accepted Government Assistance, and, case in point: the AIG fiasco. According to CBS News, AIG accepted nearly $152 billion in bailout money by the Federal government since nearly collapsing in September, and paid out over $168 Million to corporate executives in bonuses. Lenders live in the Wall Street world, and are completely removed from the borrowers suffering on Main Street.
Would you represent yourself in a divorce? Or bankruptcy? If you were on trial for murder, would you allow yourself to be represented by a court appointed attorney? On average, the single largest investment an American will make in their lifetime is the purchase of their home. Trust your financial stability not in the Lenders that got us into this mess in the first place, but a reputable and experienced Attorney that can truly represent your best interests.
According to JC Sarabia, a Foreclosure Prevention Specialist with Modification Zoom, on average loan modification cases, as many as 30 hours are spent between attorney negotiation, processing, and underwriting. If you do not have hundreds of hours of experience working with Loss Mitigation departments, completing financial packages and negotiating loan modifications then it is not recommended that you learn on your own foreclosure. Now is the time to partner with an expert that will give your case the personal attention of our Processors, Underwriters, and Attorneys.
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Thank you, you are correct about having an attorney to protect your best interests. Just as a Doctor should never have his own family members as his patients. The perspective usually becomes muddied by emotions or being to close to the issues, losing the observer objective viewpoint. This is my second attempt at a loan modification, the first I was told to pay 1200+ dollars a month, then at the end of six months a balloon of another 11,000+ dollars, of couse I was not told about the balloon it just appeared on the paperwork without explaination. I refused to sign the paperwork. Today 2 months (8.20.2009) later in a conference call with a SaveMyHome.com represenative, we agreed to 465.93 for four months then would roll to modification, still no details were give, but when I got back on my feet the loan would be re-evaluated. It was sort of a one way conversation by the lender, then later when I called provoding the reference number of payment sent, lender’s rep, cautioned me about wasting thousands for outside representation….. of course a red flag was thrown up to me. Why wouldn’t they want me to have professional representation????? I also just went through a court case acting pro Per with an 85% chance of complete success, they hired a very good out of town attorney. Guess what? I got my clock cleaned and even ended up owing almost 10,000 dollars to them. By dismissing, without prejuduce they canceled the debt to them. That attorney was a very good hire legal gun, never even allowing the main fact to be heard, by using technicalites of law and burying me in paperwork. An attorney was very cheap to what I lost in the long run. So thanks again for reminding me on important, expensive issues you are a damn fool to try and compete with professionals or experts in thier fields. Just what would happen ‘after I got on my feet’ with out mod moneys still around? I will pay the piper, happily to cover my ass ets……ASA 8/20/09
ASA,
As with anything in life, maintaining objectivity is key. It sounds like your SaveMyHome representative got you a forbearance agreement or has you qualified under Making Home Affordable for a Trial Loan Modification. Most likely, as long as you exhibit to your lender the ability to make a payment of $469.93 over the duration of the next four months, this will be at or close to your modified mortgage payment. I am not familiar with SaveMyHome so I cannot advocate for or against them, however, this is a your testimonial is a strong case for the merits of legal representation.
Best of luck to you, and keep us updated on how things turn out!