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Loan Modification Testimonial

“Loan Mitigation Advocates diligently worked to keep my family in our home, preserve my credit and obtain a modified mortgage payment we could afford. More importantly, meeting and working with Greg, one of the co-founders, has restored my faith in people and made me believe that there are good people in this world that can be trusted. Loan Mitigation Advocates is an example for other businesses in their industry to emulate; they truly believe and honor the code of putting their client’s best interest first.”

- Samantha

Loan Modifications get a Boost from the Stimulus Plan

A new plan has been hatched making loan modifications easier for struggling homeowners to obtain and lenders/servicers to provide.

Here are some of the details of the plan:

• Loans originated on or before January 1, 2009 are eligible
• First-lien loans on owner occupied properties where the unpaid principal balance is equal or less than $729,750 qualify
• Full documentation must be provided by all borrowers (including but not limited to income, pay stubs, most recent tax return and affidavit of financial hardship)
• An IRS 4506-T (Request for Transcript of Tax Return) form must be signed
• Property owner occupancy status will be verified via a credit report and other documentation
• Incentives will be offered to lenders and servicers to modify at risk borrowers who are current on payments
• Loans can only be modified once under the program
• The program will run through December 31, 2012          
• Servicers will follow a specified sequence of steps in order to reduce the monthly payment to no more than 31% of gross monthly income
• Modification sequence first requires reducing the interest rate then if necessary extending the term or amortization of the loan up to 40 years.

If you are interested in discussing any of these items or to obtain a better understanding of how the plan may help you, feel free to contact Loan Mitigation Advocates directly.

Beware of Predatory Loan Modifiers

In a recent NY Times article, Swindlers Find Growing Market in Foreclosures, the author sheds light on the growing problem of predatory loan modification businesses.  A major problem with the practices of these “swindlers” is that time is of the essence in the loan modification process.  Many of the people reaching out to loan modification companies do not have time in their favor. They are in desperate need of some source of monthly financial relief and their mortgages tend to be the most significant drain. Loan modifications aren’t an overnight process. Making the initial contact, obtaining guidance, understanding the process, gathering materials needed for submission and the negotiation process with the lender all take significant time.  The predatory companies make it appear that they are acting on your behalf, however, it may be weeks to sometimes months before the consumer knows they have been taken advantage of.  This passing of time creates an even worse set of circumstances for the borrower.  The victims of these scams are put further into a financial hole with the passing of time and the potential for losing their home grows.

Another issue that is created by these swindlers is the negative image their behavior permeates across the industry.  This is like any other industry where a number of bad apples are spoiling it for the whole bunch.  As a legitimate loan modification company, we completely understand the damage that is being done.  For many people, a bad taste in the mouth already exists due to their original experience with obtaining a loan on their home. These individuals feel like they were taken advantage of by their lender or mortgage broker and did not clearly understand the payment or loan structure they were getting. In some cases, they shouldn’t have qualified for their loan in the first place. This lack of knowledge and affordability has led to the growing financial predicament being faced.  Couple this with Read more

Walking a Tightrope? Some Modified Mortgages Move toward Delinquency

No one said it was a perfect solution. It is not a surprise to hear that just over 50% of the modifications made in the first half of 2008 were already at least two months delinquent again, according to a report by the U.S. Comptroller of the Currency (OCC). However, the justification for why these delinquencies are reemerging may not be apparent to the casual observer.

At Loan Mitigation Advocates, we believe the following reasons have contributed to the high percentage of second time delinquencies.  First off, many of the modifications performed were on mortgages with adjustable rates. The borrowers attached to these adjustable rate mortgages were already having difficulty making their existing payment. Compounding the issue is that these adjustable rates were scheduled to reset at a higher rate, thus increasing the total monthly payment due. Unfortunately, the modification solution for many of these mortgages was to freeze the rate at the original interest rate.  Essentially, the modification had little or no impact and only delayed the problem.

A second component leading to the repeat of delinquencies involves forbearance and repayment plans.  Basically, these two options allow a homeowner to delay payment of their mortgage and catch-up on their payment schedule for a certain time period. Under certain circumstances, these two options may be viable for many people.  However, the central problem with forbearance and repayment plans is that the mortgage payment that is not made during the agreed upon time period is typically Read more

Who is Next in the Quest to Avoid Foreclosures?

JPMorgan Chase & Co is the latest bank to expand its loan modification program. The program will look to assist as many as 400,000 customers in an effort to avoid foreclosures that could reach $70 billion in defaulted loans.

Charlie Scharf, JPMorgan’s chief executive of retail financial services, discussed that the modifications at JPMorgan will range from reducing rates to extending terms to completely replacing products. Modification options will be given to customers based on their current product and needs.

One of the biggest stumbling blocks JPMorgan has found in trying to modify loans is actually getting in touch with customers, Scharf added. It has been our experience at Loan Mitigation Advocates that large banks, like JP Morgan, are currently unequipped to handle the shear volume of inquiries from people in dire financial predicaments. This is exactly where Loan Mitigation Advocates can be of service. We have numerous contacts deep within the banking industry and a proven process to expedite the loan modification process.

Borrowers Face Uphill Battle on Loan Modifications

Are you one of the numerous borrowers who have attempted to contact your lender about a loan modification, only to feel like you’re facing a dead end after investing your time, energy and good will?  Well, you are not alone.

The story of Bernie Kellman is a primary example of the numerous borrowers who have unsuccessfully obtained loan modifications after several attempts. Recently, a Contra Costa Times article discussed Mr. Kellman’s situation and the brick wall that borrowers can encounter when pursuing a loan workout.

The chart below breaks out loan modifications by type.  This information comes from the California Department of Corporations:

Please keep in mind; at Loan Mitigation Advocates we are here to support the consumer.  We encourage you to attempt a loan modification on your own; however if you feel the need to pursue our services, we are happy to help navigate and guide your modification process.

Will the Financial Rescue Plan Directly Help Distressed Homeowners?

The country is in crisis and a financial rescue plan has been proposed.  It is currently in the process of being scrutinized and negotiated on Capitol Hill. The primary objective of this plan is to serve as a significant springboard to pull us out of the current financial hardship the country is facing. The positive effects, once the plan has been implemented, should trickle down into the housing crisis and consequently help homeowners who are facing or certain to face a housing crisis of their own.  But, will the plan have this desired result and directly address the needs of those homeowners? Most Americans are unclear as to how this plan will help their bottom line. 

At Loan Mitigation Advocates^sm, we believe that the central issue with the current financial crisis is Read more

California Mortgage Lenders Show Greater Willingness to Mitigate Loans

For the month of July, California mortgage lenders completed 12,657 loan modifications according to the state Department of Corporations.

This was a significant increase over the last few months. The July statistics are up about 17 percent from June and more than double the number since the beginning of the year. The statistics are based on 10 lenders that are reporting to the state regarding their transactions.

It has clearly taken some time for lenders to get on board with the option of performing loan modifications.  This latest data supports that a shift is occurring in the industry and it is only a matter of time before the majority of lenders are actively participating in loan mitigation. 

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