Homeowners Info Pack

Posted on September 4, 2010 by Duane

At National Foreclosure Prevention Services we are dedicated to keeping our clients from becoming another statistic through education and guidance. We know that bad things happen to good people and we have made it our mission to see you through whatever option you choose for your situation. Some services we handle in-house and other services we have outsourced to ethical Foreclosure Prevention Professionals and Specialists who are highly trained at solving your problem and offering you a variety of solutions to STOP your foreclosure NOW.

Lender or Servicer… What’s the Difference

Posted on July 8, 2010 by Duane

Lender

The lender or the Investor actually owns the loan and will make the final decision as to your approval or denial of your Loan Modification or Short Sale.

Most homeowners don’t even realize the difference and because a typical loan is sold several times it’s no wonder. Most homeowner’s receive their statement every month and write a check out to the name of the company at the top of the page.

Lenders are often more responsive than servicers since they have the final word or say as to approval or denial of the deal.

We will generally close a loss mitigation or short sale case faster with the lender than we will with the servicer; however there are advantages and techniques that we use to get a quick response from the servicer that most companies are not familiar with and that gives us the advantage over most companies.

Servicer

At the time the loan is originated chances are that it will be sold off to a third party. Without the proper infrastructure, employees and budget most lenders will make their money originating the loan and pay out a small fee to a third party company to service the loan with collection calls, billing and customer service.

It is not uncommon for a third party servicer to service loans from more than one lender. What you may not know is that servicer is required by law to provide full contact information for all lenders upon request and since few homeowners even know to ask it’s not surprising they have never been in contact with their lender.

Also true is the fact that most servicers will initiate the loan modification or short sale by sending out the required documents to be complete by the homeowner. We have these documents on file which gives us the advantage because we send these documents out to the homeowner at the time of our consultation and acceptance of our terms.

Over the years we have found that most homeowners will not even try to negotiate a workout plan with the lender.

My initial thought was that homeowners were in denial and that they were hoping something would change allowing them to avoid facing financial ruin and get out of this nightmare they were in.

Then one day after doing a three-way call with my client and the lender I realized it could also be the fear of intimidation and it’s not the lender who is the problem, it’s the collections department. Once you enter you account number into the system and you are behind in your payment, you are routed to the collections department. These people are ruthless and unless you know what to say and how to say it they will threaten you with foreclosure proceedings.

There is a secret to dealing with the collections department and we have the talent and the skill which has allowed us to master the art of negotiations.

For a Free No Obligation Consultation CLICK HERE

Banks are getting paid to modify your mortgage

Posted on May 5, 2010 by Duane

This is how that works -

Under the $75 billion Treasury program, companies that agree to lower payments for troubled borrowers collect $1,000 initially from the government for each loan, followed by $1,000 annually for up to three years. This is not a lot of money, but it is free to the lenders and multiply this by the number of trial modifications in process and it can be very lucrative.

The government support, which is provided from the $700 billion financial bailout program, is aimed at providing cash incentives for mortgage providers to accept smaller mortgage payments rather than foreclosing on homes.

The program has come under heavy criticism for failing to do enough to attack a tidal wave of foreclosures. Analysts said the foreclosure crisis is likely to persist well into next year as high unemployment pushes more people out of their homes.

According to the government nearly 920,000 loan modification offers have been sent to more than 3.2 million eligible homeowners. That works out to 29 percent, up from 15 percent at the end of July, but who do they consider eligible – people who are in ARM mortgages, people who have lost over-time hours or people who have fallen behind two payments or more due to other financial factors in life and currently facing possible foreclosure.

I ask this question because we know two things -

Unemployment was not considered when the government drafted the MHA Program. With no work there is no income and unemployment benefits are not enough to pay the mortgage.
Loan Modifications are only granted to primary residence homeowners so anyone that has an investment property will not qualify for the MHA Program.

I would also wonder how many Trial Modifications would actually be converted to a permanent modification and I ask that question because the bank gets paid when the trial is initiated and it should get paid when the trial is converted. That is one loophole the banks took advantage of and no one said anything…until now.

Collections or Loss Mitigation Department

Posted on March 13, 2010 by Duane

This is an excellent question and a huge part of the problem. The Loss Mitigation Department does not speak to or correspond with the Collections Department and they seem to be working from two different systems because the conversations I have with the loss mitigation department are not coped into the notes from the collections department.

And the collections department has no idea you are working on a loan modification unless you tell them and I would guess they don’t want to know because their job is to collect the outstanding balance or late payment. By the way, if you haven’t figured it out, they get paid a commission on what they are able to collect from the homeowner.

However, the problem is not new and goes beyond the paperwork snafus and staffing shortages at lenders and mortgage servicers that have created massive bottlenecks for the millions at risk of losing their homes. When the Government introduced the Hope Now Alliance in 2007 it was also riddled with problems of inconsistency and constant guideline changes.

It is the Treasury Department that writes these programs and they should learn from their past mistakes about what doesn’t work and avoid repeating them. Instead, the problems, issues and inconsistencies are passed on from administration to administration and so is the blame when the programs don’t work.

Homeowners face numerous hurdles trying to get their mortgage modified and that is why they call National Foreclosure Prevention Services, because we consult with our clients to determine the need and then we strategize a plan of attack that would best meet the needs of our clients. And we will always give our clients several options to choose from – the more options they have the better educated decision they can make.

For a more detailed step by step pre-foreclosure process and a 30 minute presentation on the past and present foreclosure problem facing homeowners visit us at Avoid Foreclosures.

Understanding the Foreclosure Process

Posted on February 10, 2010 by Duane

Millions of Americans who are struggling to save their homes from foreclosure are trapped in a minefield of disappointment and misinformation and the banks, lenders, and servicing companies are all to blame.

Instead of trying to help the homeowner they actually make it more difficult and I know this to be true from firsthand experience. I sometimes pretend to be the homeowner calling the bank for general information on what to do next (and yes this is with my clients consent) and their form of communication is to scare you into submission.

We have seen the fourth revision of the current program and this is the third program the government has put out to help homeowners avoid foreclosure. Homeowners, housing counselors, consumer advocates and attorneys working with borrowers report that the latest effort is falling far short of its original goal.

In some cases, lenders are moving to foreclose even after homeowners get approved for loan modifications. I know this be fact and the reason is simple, but also avoidable. While the loan is being reviewed the collection process continues. The loss mitigation department will tell you that while in review the auction date will be postponed, but not delayed so if you don’t stay on top of your case you will become one of those unfortunate statistics. Click on this link to read our previous post and a great 60 page article titled “Why do lenders foreclose when then can modify”.

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