US HomeSavers Loss Mitigation Blog

Why hire a loss mitigation firm?

With foreclosures rising to an all time high, homeowners are faced with a dark tunnel and some fear they have no one to lead them to the light. At the same time, some homeowners are seeking that guide and are only finding a less than ethical company to take their money and leave them further destitute, and stranded. With foreclosures at an all time high, loss mitigation companies have been pouring out of the woodwork, and popping up in every crack. The choices are not limited, but appropriate resources are.

There are several companies out there offering this service that have never actually done loss mitigation. Several have learned the trade through an online book, or class and are now trying to profit from others losses. Make sure you do your homework, and talk with the company directly to learn of their experience.

Purpose of a Loss Mitigation Firm- To assist homeowners who have fallen behind in their mortgage payments avoid foreclosure. It is generally necessary to hire a professional foreclosure prevention firm, or a loss mitigation firm to speak on your behalf. A good firm will possess the knowledge required to stop foreclosure in most situations. With that knowledge experience in the field should come also.

In my experience homeowners who have tried to negotiate on their own with their mortgage company have usually come up worse than what they started with. Mortgage companies are used to talking to homeowners that know very little about the loan they are in. Homeowners are generally taken advantage of for that very reason. In addition to negatively impacting the negotiation, homeowners also struggle making contact with a useful party at their mortgage company. This is yet another reason to hire a professional. A resourceful loss mitigation firm will have contacts with most major mortgage companies, and experience much less resistance than a homeowner.

This is something that homeowners can do on their own. Just as filing a Bankruptcy, building a house, or getting a divorce. However, it is common practice to hire a professional in those fields to make sure the job is done correctly. Saving your home from foreclosure should be just as important as building it.

The loan modification process can be frustrating and confusing for many distressed homeowners. If you are considering contacting your lender about a loan workout to avoid foreclosure, you need to get as much information upfront as possible so you will be prepared and able to present your case in the best possible light. Programs and guidelines are changing and it is getting much easier for homeowners to get the help they need.  To help you understand how the process works and what you can expect, here are the Top 10 Questions and Answers:

1. What exactly is a loan modification? A loan modification is a permanent change in one or more terms of a borrower’s home loan, allows the loan to be reinstated, and results in a payment the homeowner can afford
2. Can the lender include late charges in the Loan Modification? The federal plan mandates that the bank waive any administrative charges, late fees and penalties when offering a loan workout.
3. How will the new government programs help me get a loan modification?  The Federal government has allocated $75 billion dollars to subsidize lenders and servicers who offer a loan workout to their clients.  Now, the banks will have a monetary incentive to offer help to qualified borrowers.  In addition, homeowners who pay their new modified payments on time will be eligible up to $5000 credit to their loan balance.
4. How do I know if I will qualify for a loan modification? The number 1 criteria your lender is looking at is your ability to make the new modified payment now and in the future. You need to supply the lender with proof of your income, along with a complete and accurate financial statement detailing your income and expenses to show them that if granted the modification, you will be able to afford the new, lower payment.  You must also be able to demonstrate that you are facing a financial hardship-lower income or higher expenses for example.
5. Do I have to be currently delinquent on my payments to get a loan modification? President Obama has included a special incentive under the Home Affordable Modification Plan that will pay lenders an extra bonus for reaching out to homeowners not yet delinquent but at risk in the future.  The goal is to help borrowers before they fall into default.
6. What is an acceptable Hardship situation? Each homeowner has a unique set of circumstances that caused them to fall behind on their home loan, but generally the lenders consider divorce/separation, loss of income, death of spouse, co borrower or family member, illness, job relocation, military service to be acceptable reasons to consider a loan modification. A compelling hardship letter included in your application is a very important part of a successful application.
7. Will a loan modification help me stop foreclosure? Yes, that is the goal-by working with your lender to find a loan workout solution, your loan is brought current and the foreclosure process is halted.
8. Can my missed payments be added back into my new loan modification? Yes, the arrears can be added to the new loan balance and spread out over the term to allow the loan to be brought current.
9. Can I do a loan modification myself or should I pay someone to represent me? That is entirely up to you and your comfort level with dealing with your lender.  The Treasury Department is strongly discouraging the payment of any fee to a third party to represent you in a loan workout. Regardless of what you decide, the first thing you should do is learn all you can about the process, your legal rights, and what it takes to get your application approved.  An informed homeowner is harder to take advantage of and will have a much greater chance of success.
10. So how do I get started to modify my loan? Before contacting your bank’s loss mitigation department or a loan mod company, do your homework-learn as much as you can about the loan modification process so you can make informed decisions.

President Obama’s Home Affordable Modification Plan offers real hope for millions of homeowners who need a solution to stay in their home.  Not everyone will qualify however, and interested borrowers will have to complete loan modification application forms, provide proof of their income and meet certain eligibility requirements.  Most lenders are participating in this new government subsidized plan, and homeowners are encouraged to learn how they can qualify and apply for a loan workout and avoid foreclosure. 

Hello all,You are receiving this e-mail because you didn’t make my sh*tl*st and I want to share some information with you should you still have an interest in the third party loss mitigation business.

The government’s meddling in sub prime mortgage issues makes legitimate, third party loss mitigation services more vital than ever in terms of our role as consumer advocates. Distressed homeowners have to watch out for loan modification/loss mitigation scammers, the worst of whom may be their own lenders or servicers. It’s sad but true. Roughly half of the loan modifications I look at are those from homeowners who attempted to negotiate their own loan mods that are full of errors and omissions OR they are not really loan mods at all. It’s a scandal that no one is really aware of UNLESS you are an industry inside. 

As you have all experienced, taking good loss mitigation applications and getting paid in a timely manner can be challenging, to say the least. Our new system makes loss mitigation a lot easier and more profitable as we have automated the pre-qualification process and we now have experienced, major bank trained loss mitigation specialists on board that essentially allows us to work out of the lenders’ and servicers’ own playbook. 

Although the last year or so has been challenging to say the least, US HomeSavers keeps plugging along. We’ve made some changes in staffing and technology over the last couple of months that vastly simplifies the application/approval process which, as you all know, I hold to be of paramount importance in our efforts to bring reality and results into the loss mitigation business. We have instituted an US HomeSavers Loss Mitigation Reseller Program whereby you can offer homeowners fixed price loan modification services at super competitive rates that can be fully guaranteed, partially guaranteed or not guaranteed as part of the loan modification pre-qualification process. There are no upfront costs for you to become a Reseller. 

You will be supplied with a Bank Qualification datasheet which is primarily an Excel Spreadsheet modeled after the industry standard software used by the big banks to determine homeowner eligibility for home retention programs. All you have to do is get your customer to complete the pre-qual app or you do it for them. (preferred). E-mail it to me for a QC Check and our processing department will either approve the pre-qual or deny it in 24 hours. If we decline the application, you realtors should be sharp enough to get the pre-foreclosure sale listing which will most likely be a short sale. Short sales will be processed under the new CDPE standard for which you will receive instructions and the forms needed.

If the application is approved, your job is to collect the required documentation and the service fee “deposit” from your customer. Once the formal application is submitted and accepted by the processing department. Let me close for now with two important items of note. 1) I got 14 out of 16 loan mods approved last Friday representing just under $21,000 in gross revenue and 2) if you have any interest taking advantage of this free opportunity, you need to join my Loss Mitigation Reality Group at http://finance.groups.yahoo.com/group/Loss-Mitigation-Reality then complete the attached Reseller Application documents attached to this e-mail. Dutch, you are exempt but call me so I can get you entered into the system.  

Thanks,

Curt