• Main Page
• Our Story
• Our Purpose
• Our Services
• FAQ’s

1.866.797.7011

Are You Using a Legal Loan Modification Company?

Here’s a big news flash for consumers.  Did you know that as of January 1, 2011 all companies performing Loan Modifications must have a Mortgage Loan Originator (MLO) endorsement in order to legally operate?  Prior to this, only a Real Estate Broker’s license was required to operate a loan modification business.  This MLO license endorsement is part of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”). This federal law gave states one year to pass legislation requiring the licensure of mortgage loan originators according to national standards and the participation of state agencies in the Nationwide Mortgage Licensing System and Registry (NMLS&R).

The SAFE Act is designed to enhance consumer protection and reduce fraud through the setting of minimum standards for the licensing and registration of state-licensed mortgage loan originators. Senate Bill 36 (SB 36), which was signed into law in October 2009, was enacted in order to bring California into compliance with the SAFE Act. SB 36 requires all Department of Real Estate (DRE) real estate licensees who conduct residential loan origination and loan modifications, as outlined in the SAFE Act, to meet specific requirements to qualify for a MLO real estate license endorsement.

The SAFE Act requires loan modification companies to pass a written qualified test which covers federal and state law, to complete pre-licensure education courses, and to take annual continuing education courses. The SAFE Act also requires these entities to submit fingerprints to the NMLS&R for submission to the FBI for a criminal background check, and authorization for the NMLS&R to obtain an independent credit report.

At Loan Mitigation Advocates, we are proud to let you know that our entire company has met all the requirements and has received the MLO endorsement.  It has been our pleasure helping numerous homeowners receive loan modifications and we look forward to helping many others preserve their home ownership.

Trial Modification = Success, Think Again

Three months have passed since the tax credit expired, and the housing market does not appear to be showing signs of a speedy recovery. Inventory numbers are increasing and it appears that despite record low interest rates, demand is not robust.  The Tri-Valley area, the area in which we specialize here at Loan Mitigation Advocates, has seen a steady rise of inventory over the last 6 to 8 months. If homeowners are unable to sell their homes and their personal situations do not improve, they may be forced to consider other alternatives such as loan modification or short sales.

For borrowers, the road to obtaining a loan modification can be an exhausting one.  On average, loan modifications take an excruciatingly long time from start to finish with some modifications taking over a year to complete. 

The kicker is that once a trial period modification is secured it does not guarantee that you will be given a permanent modification.  We are not talking about those cases where the borrower does not follow through with the “rules” instituted by the lender.  This can include the borrower missing or being late on payments during the three month period.  Also, if the borrower’s situation changes drastically (ie significant increase/decrease in income or debt) can be cause for denial of a permanent modification.

Unfortunately, the situation that we are talking about doesn’t even involve negligence on the part of the borrower.  Even if the borrower does everything correctly and follows through on their three month trial plan, we have seen many cases where the lender is so “backlogged” that they are unable to produce a final modification at the end of the trial period.  If this happens, many lenders suggest continuing to make the trial period payments.  Unfortunately, for these clients there is no timetable that is given for completion by the lenders. This is just unacceptable.

Are Loan Modification Success Stories Increasing or Decreasing?

At Loan Modification Advocates, we have seen a steady increase in our ability to push loan modifications through to success.  The Treasury Department recently came out with statistics that showed more than 299,000 homeowners received permanent loan modifications as of last month. That equates to around 25% of the 1.2 million homeowners who started the program since March 2009.  Without further information, one can perceive this news as either positive or negative.

From our experience, this number is just too low, and the time it takes to complete a loan modification is still shocking.  Clearly, there is not enough being done by the lenders to expedite the process of loan modifications. However, at Loan Modification Advocates, we are doing everything in our power to put you, the homeowner, in the best particular situation to obtain a loan modification.

When you become a client of Loan Modification Advocates, we perform a detailed analysis on your particular situation.  Our goal is to determine your likelihood of obtaining a loan modification based on our experience with past clients and our knowledge of the guidelines established by the lenders for determining whether a homeowner “qualifies” for a loan modification. Before turning in your file, we work with you to execute a strategy that maximizes the completeness of your file.  Once we believe your file is in the best shape possible, the file is turned in. One would assume that submitting a well-analyzed and guideline-specific file would result in a fast and efficient turnaround by the lender.  Unfortunately, in some situations that is not the case.

Here are some of the scenarios Read more

Foreclosure or Short Sale Complete? Think Again.

At Loan Mitigation Advocates we take pride in trying to help our clients preserve their home ownership.  Loan modification is the preferred method to resolving a homeowner’s hardship.  However, there are times when someone’s situation cannot be resolved through loan modification and the only possible solution may be to short sale or foreclose on the property.

Short sales and foreclosures are happening due to the combination of falling home prices and a borrower’s unforeseen circumstances (ie unemployment, reduction of hours, medical condition, etc,). Borrowers who can’t obtain a loan modification and are having difficulty maintaining their payments have to sell their homes for what they owe. As a result, they are being forced to short sell or foreclose.  Unfortunately, these homeowners who head down the path of short sale or foreclosure are unfamiliar with the pitfalls that may follow.  Besides credit implications, possible deficiency judgments could occur long after the homeowner has concluded their transaction.

In a recent article, Les Christie describes two scenarios where homeowners were forced into involuntary homeowner monetary contributions after the completion of their transaction – one related to short sales and the other related to foreclosure. We recommend that you read this entire article by clicking on the link above to further understand these potential consequences. 

Also, to get further educated on your particular situation you can contact Greg Jewell at 925.463.6164.  Greg specializes in short sale coordination and has direct experience with numerous short sale transactions.  Contacting a real estate attorney, bankruptcy attorney or a tax consultant is also important to clearly understand the types of loans you have – recourse vs. non-recourse and the possible implications involved.

Mortgage Industry to Receive Pressure from the Obama Administration

The government is not happy with the results from its foreclosure-prevention efforts.  Mortgage companies are not doing enough to help homeowners avoid losing their homes.  The Obama administration has vowed to spend the next several weeks to increase the pressure on the mortgage industry.

In a recent Associated Press article on this matter, Treasury Department officials said they will step up pressure on all the companies participating in the government’s $75 billion effort to stem the foreclosure crisis. At Loan Mitigation Advocates, we feel that it is about time. Despite having completed numerous successful loan modifications, we have been frustrated at the inability of lenders to turn around loan modifications in an effective and efficient manner.  Unfortunately, we don’t see this changing unless the lenders are more heavily scrutinized for their lack of effort and thus held accountable with direct consequences.

To turn the lenders around, it appears the government will start by sending a three person team to monitor the eight largest companies’ work and then that team will send twice-daily reports on their progress. Also, the Treasury Department will publish a list of the mortgage companies that are lagging.

“In our judgment, servicers to date have not done a good enough job” of making the modifications permanent, said Michael Barr, an assistant Treasury secretary. Companies, he said, “that don’t meet their obligations under the program are going to suffer consequences.”

Focus your attention on CREDIT

Credit has been making headlines recently and is quite a serious subject.  With many homes turning to short sales and foreclosures, some homeowners don’t realize the huge impact that a short sale or foreclosure can have on their credit and subsequently their future buying power.

In a recent article by Strategic Equity, Dave Muti, author of “Mortgages:  What You Need to Know,” was asked how a credit score is calculated and tips for increasing it. The Fair Isaac Corporation created the most common credit score used today – the FICO score.  It ranges between 350 and 850.  The higher the score, the better the interest rate you can secure.  720 is the credit score threshold that you don’t want to drop below in order to secure the best rates.  If you drop below 500, you may not even be able to secure a mortgage.

The following are five critical credit criteria reported in the article:

1. Payment History – This pertains to your track record for paying your bills. It makes up 35% of your score. Essentially, this means paying your bills on time. A mortgage “late” is much more serious than a credit card “late”
2. Credit Ratio – How much you owe is 30% of your score. Just because you owe less does not translate to having a better score.  This score is determined between the various types of credit you have opened (see #3 below). There needs to be a balance between how much you owe and how much you have available to you.  Having too many credit cards can be a negative and having only one could be as well. The goal is to have a lot of credit available to you, and to then use that credit, while at the same time not maintaining a high balance.
3. Credit Type – The type of accounts you have makes up Read more

Why Getting a Loan Modification May Not be a Speedy Process

A great new article was just written from CNNMoney explaining some of the reasons why troubled homeowners are not getting mortgage modifications. Many of you will find the items discussed below to be absurd and ridiculous. These are some of the pitfalls we face everyday, here at Loan Mitigation Advocates, when trying to help our clients get a loan modification granted by the lender.

The top Five Reasons for why the loan modification process is slow are a byproduct of the lenders’ inability to get ahead of the shear volume of loan modification requests.  Essentially, they are always playing catch up and here are 5 reasons adding to this deficiency (see the more defined list at CNNMoney):

#1 – The Fax Machine
Everything from lost pages to warped pages to no acknowledgement that the fax has been received to incorrect fax numbers.

#2 – Multiple Forms
Seemingly endless amounts of documentation are required for a loan modification.  To compound the issue, each lender has its own set of requirements and each borrower’s situation is different which demands a different set of requirements.

#3 – Outdated Information
The time it takes to process a loan modification could be weeks to months.  Information gets outdated and lenders want to make sure that your situation does not change during the time they are considering granting you a loan modification.  In many instances, they will ask for updated information two or three times (i.e., pay stubs, bank statements, etc.)

#4 – Poorly Trained Personnel
I can tell you first hand that there are some people working for the lenders that are rude and unable to assist.  Most of the time, these individuals do not acknowledge receipt of the initial loan modification packet and if you are calling to obtain a status, they have no history of where the loan modification is in the process. You would assume that all individuals working in the loan modification department would be able to obtain a current status on a borrower’s file.  Not the Read more

Obtaining a Second Loan Modification – is this Possible?

This is a common question that we field here at Loan Mitigation Advocates from prospective clients. These calls typically come from borrowers who went through the loan modification process with another modification company or used the lender directly and had insignificant results.  In most cases, these borrowers were unhappy with the result of the granted modification.  The modifications created little to no impact on their monthly payment and in some cases raised the monthly payment. We do receive a smaller percentage of calls that come from individuals who received just an adequate modification.  However, since the time of the granted modification these individuals have fallen under more dire circumstances and need a further reduction to take place.

The bottom line answer to the question of whether another loan modification is possible is that it depends.  All loan modification agreements are not created equal.  They are different and the need to thoroughly understand your contract is critical. Primarily, you are looking for any verbage that restricts your ability to obtain another loan modification.  If there appears to be nothing in writing within the contract, the next step is to contact the lender directly to see if they have any internal policy that prohibits a second loan modification within a certain period of time.  If a restriction exists, the period of time that needs to elapse before another modification can be granted is typically around 1 year.

At Loan Mitigation Advocates, we do not accept advanced fees and we would be happy to look into this situation for you. We are focused on working with the lender to obtain a long-term solution that benefits you, the borrower.  The mediocre quick fix or a temporary band-aid for your financial situation is not what we are after.  As an operating goal at Loan Mitigation Advocates, we seek to secure a loan modification for our clients that is impactful enough to alleviate the need for a second modification down the road.

Mortgage Modifications Get Trial Period

There is an interesting new twist to the whole loan modification procedure.  Mortgage modifications may require a three-month trial period in order to test the borrower’s ability to make payments under the modified loan structure.  If the borrower meets the requirements during this trial period then the loan modification will be finalized. During the trial period a loan could be reported as delinquent and in most cases the foreclosure process will be suspended.

For the most part, this trial period is specific only to the federal government’s Home Affordable Modification program.  However, expect modification programs that fall outside of the federal government’s program to implement the trial period as well.

In a recent article by Marcie Geffner of Bankrate.com, she describes 10 things that a borrower needs to know about the trial period. To read more about those ten items, please click on this link, Modifying Mortgage Trial Period

Obama Plan for Modifying Mortgages Has Slow Start

According to a recent NY Times article, about 55,000 homeowners have been extended loan modification offers after two months of the Obama loan modification program going into effect.  This is not an encouraging number. Under the Obama plan, the goal is to lower monthly payments to 31 percent of the borrower’s gross income. This will occur first by reducing interest rates to as low as 2 percent.  If the interest rate reduction is not sufficient to hit the 31 percent level, extending the loan term or deferring principal will be another option.

At Loan Mitigation Advocates, we have direct interaction with numerous lenders and we can concur that the U.S. plan for modifying mortgages has started very slowly.  One reason we see as the cause of the slow start is that many lenders are still in the process of revamping their computer systems and altering their process in order to accommodate the new rules and regulations.  Prior to the new regulations, lenders already had a significant backlog of files needing to be processed.  The new rules have just compounded the issue.

Another cause to the processing delays is that some lenders do not have their different departments effectively broken out. We have interacted with lenders who in some cases have their foreclosure, short sale and loan modification departments flowing to the same location.

However, the NY Times article discusses that experts feel a larger issue is the continuing deterioration of the economy. The longer it takes to get the program in gear, they say, the fewer people may qualify for modifications. The expected rise in unemployment and the ending moratorium on foreclosures may directly keep a number of homeowners out of the program.

On a positive note, the article does mention that the administration remains confident that the program will Read more

Next Page »