Testimonials
My Story May Sound Familiar
I had unwisely purchased a very expensive house. Now I was behind on my $11,500 monthly payments with no chance of catching up. My financing of the house had been a disaster from the start. I had been promised a fully amortized, thirty year adjustable loan at 7 ¾%, and trusted my mortgage broker to deliver as promised. However, following the close of escrow I learned that instead, I had an interest-only five year first trust deed loan fixed at 8% interest, plus an interest-only five year second at 11 ½% interest .If that wasn't bad enough, my broker took from escrow the impound money that had been put there to pre-pay the taxes and insurance for a year, forcing me to shoulder that burden in addition to my jumbo house payment. Before he disappeared, and unbeknown to me, the broker also closed the loan two weeks before I got possession, thus saddling me with an extra two weeks of interest to pay in my very first month of occupancy ( $5700 ). I had taken my eye off the ball and it cost me dearly. So when I pulled into my driveway to see someone nailing a foreclosure notice to my front door, I thought that I was about to have the "Big One"!
Months before the foreclosure notice was nailed to my door, I knew that I was in trouble and hired a "loan modification broker" to negotiate a new deal with my mortgage company .In those days it was called a "workout loan". Anyway, months went by and nothing happened (scam?). Whenever I asked the broker for an update, she gave me a reason for the delay. The negotiator assigned to my file had been transferred. The bank had been bought out by a larger bank which had caused confusion and delay (lie?). My financial statement didn't show me to be needy enough, or fit their ratios. Finally, when I called to relay that a foreclosure notice had been served and that I was running out of time, she told me to relax--- she had it handled (lie?). Like a deer frozen in an oncoming car's headlights, I froze! Normally, I do not panic under pressure--- instead--- I take action! And this time was no different except that I waited longer than I normally would have because: (a) I wanted to believe the broker, and (b) I did not know what to do, who to call, or what to say. My policy had always been "when in doubt, tell the truth", so I set about the task of finding someone to tell it to. I was now two days away from my house being sold to the highest bidder and I wasn't going to go down with just a whimper.
The first thing that I learned was that my mortgage company did not want me to reach anyone who could do anything. They threw up such an obstacle course of voice mail dead-ends that, as intended, most people would just give up. But I pressed on and when I finally did connect with a loss mitigation negotiator, I learned my second lesson which is---They do not want you contacting them directly and they do not follow through on anything promptly. Once you breakthrough to a negotiator, you must demand their direct contact information ( an e-mail address is best), and you must pester them every few days to keep your file from sitting dormant on someone's desk, or worse ! I learned many more lessons during this grueling process like (a) How much is too much income to qualify and how much is too little. (b) What poison darts to avoid if you do not want to be disqualified before you start. (c) What is the most that you can ask for and expect to get versus what is the minimum (d) What is an acceptable hardship to cite as your reason for needing a modification (e) Does the subject property have to be owner-occupied for you to be approved (f) Are there more than one program that one can apply for (g) Does this work for Jumbo loans (h) Can you expect to get a principal reduction on your loan (i) if so, how much (j) will you have to pay anything up front, and on and on.
To make a long story short, here's what happened. The day before my house was to go to sale I stopped the foreclosure and entered into a repayment agreement that required me to make a small good -faith deposit and substantially reduced monthly payments ( about half ), for four months. At the end of four months I negotiated to have my principal balance reduced by $260,000 , thus wiping out my second mortgage. I had my interest rate reduced from 8% on the first to 4.9%, and since the second was gone , no more 11% interest on it. My payment dropped in half permanently, and my remaining loan was converted from a five year interest only loan to a fully amortized thirty year loan.WOW! What a home run. I had done in two days what my loan modification expert had not been able to do over six months! I had also learned a whale of a lot of insider secrets, short-cuts ,key words, confidential contact information for getting directly to the source and formulas that the mortgage companies use to figure out what they will and will not offer you. I felt like more of an expert than the expert that I had paid $15,000 to for nothing (scam).
