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81 Months Past DUE !!! Select Portfolio Servicing (“SPS”) Loan Modification Obtained For Homeowner in Valley Springs, CA

11/20/2014 : michaelgaddis : 10:19 am : California Loan Modification Attorney, SPS Loan Modification

SPS Loan Modification Success Story

Recently I helped a homeowner living in Valley Springs, CA obtain a HAMP trial loan modification from Select Portfolio Servicing (“SPS”).  This file was one of the most difficult and frustrating cases that I have ever had.  I have been assisting homeowners obtain loan modification since the inception of the housing crisis.  I only mention this because I want you to understand that I am extremely familiar with not only loan modifications but also the evolution of loan modifications.  When this homeowner contacted me she had been attempting to modify her loan for over 6 years and was coming off of a fresh denial from SPS.  The homeowner also had a Trustee Sale scheduled to occur in 20 days.  I asked the homeowner to send all of her paperwork to me and then, as I always do, thoroughly reviewed her situation to determine whether or not I thought she should be able to qualify.  My first impression was that she should not be having problems.  Her case appeared to be a text book example for HAMP Tier 1 approval.  Yet, when I looked at the SPS denial it appeared that SPS was not even reviewing the homeowner for HAMP Tier 1.  I reanalyzed the Homeowners income documentation, verified the value of the home and ran my calculations.  I did this 3 times.  Each time I ran my calculations I became more convinced that SPS was in error.  I agreed to take the homeowners case and, although I could not guarantee a result, I told the homeowner if there was ever a case I thought should pass a HAMP Tier 1 review it was this one.  The homeowner agreed to retain me and I prepared and submitted a new loan modification application to SPS for review.  My first obstacle was that we the loan modification submission was too close to the sale date.  I had to appeal to upper management in order to get the trustee sale postponed and the homeowner’s loan modification package into review.  Once in review my work began.  Sure enough the first loan modification application I submitted was denied for similar reasons to that which the homeowner received.  I appealed and challenged SPS on why the homeowner’s file was not being reviewed for HAMP Tier 1.  I might heavy resistance so I appealed the matter up the management chain.  Months past as did the constant threat of foreclosure.  Finally, I was told by SPS that the reason that the homeowner was not being reviewed for HAMP Tier 1 was because the homeowner had a received a previous Trial Payment Plan (“TPP”) and that the homeowner had defaulted after making one payment.  I asked the homeowner if this was true and the homeowner told me that while she had received a TPP, she never made a payment because the approved TPP payment was too high.  Hearing this I went back to SPS and told them this information.  Again I met resistance.  I demanded to see an accounting of her payment history so that I could see where she made a trial payment and then defaulted.  Of course they could not show me where the homeowner had defaulted on a TPP.  Finally, they agreed that the homeowner had not missed a TPP payment, but argued that she was still not eligible for a new HAMP Tier 1 review because the HAMP Guidelines stated that if the homeowner received a previous TPP offer and did not take it the homeowner was still not eligible for a new HAMP Tier 1 review.  I could not believe what I was hearing.  I told them that I was familiar with the HAMP Tier 1 Guidelines and that was not what it said.  I told them that the HAMP Guidelines stated that a homeowner loses eligibility when a homeowner receives a TPP and then defaults after making the first payment.  Since the homeowner did not default after making the first payment the homeowner was still eligible to be reviewed for HAMP Tier 1.  The response I received from SPS made me laugh out loud.  SPS responded by telling me that the while what I was saying was true for the current HAMP Guidelines, the HAMP Guidelines in effect at the time were consistent with their position and the homeowner was still not eligible because she had received a TPP but never made a payment.  I laughed because the newest HAMP Guidelines Handbook clearly states that each new version of the HAMP Guidelines supersedes the previous version.  In this case, the new HAMP Guidelines trumped the old HAMP Guidelines thus allowing the homeowner to be reviewed for HAMP Tier 1 again.  I actually cut and pasted excerpts from the Treasury Guidelines to support my position.  SPS clearly was wrong for not reviewing the homeowner again for HAMP Tier 1 and finally, they reluctantly agreed to rerun her for HAMP Tier 1.  Subsequent to their agreeing to rerun the homeowner for HAMP Tier 1 I received another denial from SPS.  When I reviewed the denial I noticed that SPS was still not reviewing the homeowner for HAMP Tier 1.  I challenged SPS again.  SPS told me that they were having trouble removing a block in their computer and that they would need to figure out how to lift the block in order to rerun the homeowner’s file for HAMP Tier 1.  About a month later, I was finally informed that SPS was able to properly run a HAMP Tier 1 review and that the homeowner had passed and been issued a TPP.

This file was definitely one of the more challenging files because lenders always believe that they are right and that homeowners are wrong.  SPS believed that they had properly followed HAMP Guidelines and that they were 100% correct in their review of the homeowner’s file.  As you can see, they were wrong.   The TPP plan calls for a payment of $2,218.75 which represents a potential savings of nearly $700 a month from the homeowner’s currently scheduled payment. The trial payment begins December 1, 2014.

Michael Gaddis is very proud of every one of the modifications that he obtains for homeowners.  This loan modification means that yet another family will be able to keep their home.  As always Michael Gaddis and his staff will continue to monitor the homeowner’s file during the trial period in order to ensure that a final SPS loan modification is obtained.  To view a copy of this trial SPS Loan Modification as well as other successful loan modifications procured by Michael Gaddis please click the following links: and

Are You in Danger of Losing Your House? Beware of Scams

11/19/2014 : michaelgaddis : 10:42 am : California Loan Modification Attorney

Are you in danger of losing your house

I have been assisting distressed homeowners either 1) modify their loans; 2) short sell their home; 3) obtain short refinances; or 4) obtain deed-in-lieu since 2008.  One would think that by now, most of the companies preying on desperate homeowners would have either disappeared by now or would have been shut down via the legal process.  Yet, every single day I receive a phone call from someone telling me that this company or that company took their money or promised them pie in the sky.  While I appreciate the fact that homeowners are desperate to keep their homes, I also feel that these same homeowners should not allow themselves to be victimized or lured into an uncomfortable situation by promises of leprechauns and unicorns.  I think over the past 6+ years I have heard stories about every scam or false inducement scheme out there.  I really feel sorry for homeowners who are not only losing their home but also spending their life savings trying to save it.

If you have friends, family, coworkers or acquaintances that  are losing their home and want to give them some advice, I would suggest telling them the following:

1.  The bank is not there to “help” them.  Banks represent investors.  Investors desire to make money.  The only reason that investors consider loss mitigation tactics such as loan modifications, short sales, deed-in-lieus, etc. is because the investor is in danger of losing money.  Banks do not give loan modifications because they feel sorry for home owners, they give loan modifications because giving loan modifications is in the best financial interests of their investors.  The term “Loss Mitigation”  by definition means making the best of a bad situation.  Banks “evaluate” homeowners to see if they can offer changes to the existing terms of the note that are favorable to, who else, the investor.

2.  If you or a homeowner want solid advice on how to resolve a delinquent loan situation, seek out an attorney that has experience in dealing with the banks.  Preferably, find an attorney that is also a mortgage broker and real estate broker.  The 3 skill sets of an attorney, mortgage broker and real estate broker are perfect for helping distressed homeowners.  If you contact an attorneys office or a “legal center” insist on talking to an attorney.  Do not be sold until you have the opportunity to speak to the attorney.  You have no idea how many times I have been told that a homeowner thinks they were working with a law office but were never allowed to speak or see an attorney. This should send up giant red flags.

3.  Watch out for investors.  Investor will frequently approach homeowners in sheep’s clothing promising to help save homeowners.  However, typically the real motivation is to try and find a way to get you to work with them so that they can acquire your property below market value.  These investors will frequently tell you that they will try and help you obtain a loan modification, for free! They know that you do not have a chance but they feel if they earn your trust they will be able to turn you to do what they want you to do once your loan modification application is denied.  Or that they will buy the house and let you stay there and eventually buy it back.  Their real motivation is their own pecuniary gain.

4.   Do not pay up front for loan modification services.  Never pay a dime for loan modification services, no matter what they call it, until they have achieved their goal.  In California, SB-94 prohibits the taking of up front fees for loan modification services.  If someone tries to charge you up front run away, fast.  Not even attorneys can take up front fees.

5.  Be Realistic.  Many homeowners have unrealistic expectations about what can be done to resolve their delinquent loan situation.  These homeowners here “stories” about what other homeowners are receiving and want to obtain the same thing for themselves.  Homeowners need to keep 2 things in mind: 1) Not all of these “stories” are true; and 2) Every homeowners situation is completely different.  The second point is probably the most important to keep in mind.  Every single situation is unique.  Each homeowner may have: 1) a different loan servicer; 2) a different investor (while the loan servicer might be the same, the investor who owns the underlying note may be different; 3) different  income and income sources; 3) different loan-to-value (“LTV”); 4) different amounts of delinquency; 5) different loan terms (interest-only, principal and interest, negative amortization, etc.); and 6) and so and so on…

The point I am trying to make is that modifying a loan is difficult.  Homeowners are fighting investors’ financial incentives of granting loan modifications.  I strongly suggest obtaining competent professional assistance.  As real estate prices continue to rise and the risk of loss to investors decreases the incentive for granting loan modifications decreases.  Do not put yourself into a position where you have exhausted too much time.  If you need help seek it out sooner rather than later.

If you or someone you know is in need of a loan modification please contact me at 760-692-5950 or by email at  I offer free consultations and the promise that I will tell you the truth, not just what you want to hear.

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