Loan Modification Suggestions for 2016: Are You In Danger of Losing Your Home?

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Loss Mitigation Photo-Are you in danger of losing your house

Loan Modifications in 2016

I wanted to start out 2016 by sharing my recent experiences with assisting homeowners in their efforts in obtaining a loan modification and/or preventing a foreclosure.  There is no doubt about it, loan modifications are becoming more and more difficult to obtain.  Ever increasing property values and appreciation factors in lenders’ Net Present Value (“NPV“) calculations are causing more and more homeowners to be denied loan modifications.  Every day I receive three to five calls (or emails) from homeowners desperately looking for clarity on their ”REAL” options.  Most of these homeowners are at the end of their emotional ”rope.”  The stress and uncertainty of dealing with their housing situation has affected them emotionally, physically, in their relationships, in their workplace, etc.  Most of the homeowners that contact me have already tried to modify directly with their lender, or with the help of a nonprofit, or with the help of litigation, or with the assistance of a “Loan Modification Assistance” company or with the assistance of another attorney.  I am usually a homeowner’s last hope.  Homeowners typically find me after hours and hours of Internet research.  These homeowners find my blogs, copies of the mods that I have obtained for my clients that I post on my website, YouTube videos, etc.  One of the first questions that I ask homeowners that call me is whether they want me to tell them the truth or a lie.  Homeowners are usually surprised by this question.  The reason I ask this question is because I am not going to tell them about leprechauns and unicorns.  I am going to tell them the truth.  Loan modifications are very difficult, even for me, so I do not want to provide someone with false hope, especially when I know that the probability of success is very low.  With that being said, loan modifications are still attainable, but the probability of success can only be determined after a thorough review of each individual situation.  In other words, I need to review them case by case.

I understand the enormous amount of stress and pressure that homeowners are under when dealing with the imminent threat of losing their home.  I would make the following suggestions to homeowners facing foreclosure in 2016:

  • Do not wait until the last minute!  For whatever reason some homeowners wait until the LAST possible minute before seeking assistance.  Stopping Trustee Sales is becoming more and more difficult.  I have literally had homeowners call me to tell me that they have sales at 9AM the next day.  If you are a homeowner do yourself a favor and do not wait until the last second.  I promise you it will not end well.
  • Take detailed notes when communicating with your lender!  At a minimum write down the date, time and name of the person from the lender you are speaking to.  Ask questions like “Is my loan modification application with an underwriter?” “Are you missing any documents?” “Is there a scheduled sale on my property?”  Make sure that you take detailed notes and write down everything that you are told.  Do not assume anything!
  • Follow up at least 3x per week!  I do not care what the lender tells you, you need to call, at a minimum, Monday-Wednesday-Friday.  You need to ask the same questions every call.  Do not assume that you have already been told the information and do not need to ask again.
  • Do not become overly friendly with your dedicated point of contact!  Your dedicated point of contact is not your friend.  No matter how nice or friendly they may seem, they are not your friend.  Do not assume that they have your best interest at heart.
  • Do not trust what your dedicated point of contact is telling you!  If your dedicated point of contact attempts to tell you how to structure your income or your package BE CAREFUL!!!  Dedicated points of contact do not have any specific information related to how to achieve a loan modification.  It is amazing how many people call me and tell me “I don’t understand why I failed, my dedicated point of contact told me exactly what to do!”
  • If you are using a 3rd party to assist you, keep updated on what is going on!  If you have a 3rd party working on your loan modification file make sure that you are receiving AT LEAST weekly updates.  Do not just pass your file to them and forget about it.
  • Pay attention to your mail!  Make sure that you are reading all of the mail that you receive from your lender.  Some homeowners do not want to read it.  Do not ignore your mail!

I could go on and on giving suggestions but I think you get the point.  You need to be vigilant and prudent when seeking a loan modification.

Loan modifications are not the only loss mitigation tactic that you could utilize to resolve your housing situation.  You could file a Chapter 13, seek a repayment plan, obtain assistance from Keep Your Home California, seek a deed in lieu, pursue a short sale, etc.  The most important thing is to weigh the pros and cons of each and determine the best and MOST REALISTIC option.  I know that emotions can sometimes cloud reality so you should really do your best to look at your situation objectively.