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Facing Foreclosure on Your Real Estate Mortgage, Short Sale & Loan Modification are Alternatives. Hire an Expert Short Sale Negotiator, Experienced Real Estate Agent. Go To http://RealEstateMarketingThisWeek.com
Part 8 (Excerpt)
Avoid a foreclosure on your credit report, short sale your home and save your credit
Ok, so that is good to know, I know there are people who want to try and do that and I really dont know. I am really a full time mortgage professional, I didnt get into the loan modification business on purpose, we write mortgage loans, real estate loans for residential and commercial, so therefore I dont know your laws on the same token you dont do loan modifications and you dont write loans, youre professional realtor.
Exactly, and one more thing, bottom line is you cant be defrauding the bank. Because then youre stepping into mortgage fraud, as you know. You do have to have a hardship, you honestly do have to show, if youre going to be benefiting from staying in the home, you have to show a hardship that you cant afford the current payment. If youre making a couple hundred thousand a year and have a ½ million in the bank and owe $200,000 the bank isnt on your side in that case.
There are a lot of situations though when a homeowner wants to stay in their home, if that is the case, then we market it to investors, because there is a lot of the people who are buying these homes so we work with the investor and we work out the lease amount and the homeowners can stay in their homes in those situations. Whatever it looks like at the end of the day, the homeowner needs to picture where they are going to be in the short term midterm and long term and where this house fits into those plans, if a loan mod isnt right a short sale is a significantly better option than a foreclosure.
They need to call now, they need to take action because you do need to find a place to live and were here to help you, you dont want to get two weeks to the point of foreclosure and have no where to move your family. And the Dreamvestors Team that is your main focus right now, but people still call you for first time home buyers.
We work with buyers as well as people who are short selling. We have been in real estate several years and we didnt want just short sales, were fortunate to have a very strong clientele base and were always taking new clients. We have just adjusted our focus as the market called for it and as our clients called for it.
The other thing too when we talk about these short sales, getting out of that home before it goes to foreclosure is always the best case scenario, the bank is happier with it, the house is more saleable in most cases, people are still living there, its still there home, they still feel like the pride of ownership.
Yes, and in addition, pride of neighborhood is another point. Your neighbors are going to like you better because there is not a foreclosure in their neighborhood, it helps keep the prices up when the bank takes them back the banks price them even lower typically, well sure and then its vacant and we have the potential problem of neighborhood kids turning the house into a paintball arena.
I saw that in a fantastic two story home with an amazing backyard, this house was to die for, a million dollar home and the neighborhood kids turned this house into a paintball arena. Now I am not going to lie, that might have been fun when I was a kid, but this house was trashed, wires hanging out, I mean it was just an absolute mess. The lenders dont want that, you dont want that. They need to take action they need to call you.
Yes educate yourself and call someone today. Folks its important to point out today that I would like to see you call Kalyn and Jeri for this because I know, I have seen their track record. I know their close ratio and I know that they generally care about you and your needs first, but if you have someone who does this and youre contemplating it, if you have a sale date coming up, you need to take action. Move on with your life, put this part of your life behind you.
One of the things to and we dont want to get to deep into this, Jeri or Kalyn, but after the short sale is done its all said and done, you have an affiliation with people who can help them out in getting their credit repaired and ready to go. We do, we really pride ourselves on being a one stop shop, so we help educate them, if its going to be a loan modification or a short sale once they get through the process then we begin working with them on credit repair. We have a program that we work ourselves, and if its a really sticky issue with your credit we have people that we work very closely with that we will refer you to, we also have a team that includes a bankruptcy attorney, a real estate attorney and a real estate CPA... 
Facing Foreclosure on Your Real Estate Mortgage, Short Sale & Loan Modification are Alternatives. Hire an Expert Short Sale Negotiator, Experienced Real Estate Agent. Go To http://RealEstateMarketingThisWeek.com
Part 7 (Excerpt)
Prices are back to 2003 levels: A Short Sale is significantly cheaper for a bank than a foreclosure
Were in the studio today with Kalyn Roberts and Jeri League of the Dreamvesting Group, these two young ladies are experts in the short sale area, they are NOT going to tell you what you want to hear, they are going to tell you what you need to hear. There is a big difference between what you want and what you need in the case of getting out of a situation. We talked during the break about the different types of people; who qualifies, who doesnt qualify, who this is good for, and who its not good for. I want you to talk about people who are upside down and how youre here to help.
What we want to get across today if you just need to call someone if youre upside down in your mortgage, if you have a listing next door and its a bank owned or short sale, there is a good chance youre probably upside down in you mortgage if you bought anytime in the last, in the last 5 years were almost back to 2003 pricing now.
Just to jump in real quick, Jeri and Kalyn its not just the people who purchased, its the people who used their homes as ATMs which is a crude way for me to say it but lets be honest. You watch the television, and I am not going to name any names, but a company that rhymes with lietech though, they have a commercial where they are showing pictures of using your home to buy a big boat and everybody got sucked into that and now here were.
Yes, if you used your second mortgage to build that big beautiful pool in your backyard, maybe you need to call us. Yes, its unfortunate, we always tell everyone like you just said, everybody got sucked into it, it doesnt mean youre stupid, it doesnt mean you necessarily made a really bad decision. Most people got caught up in the real estate market and good marketing ploys like that, and the bottom line is as we said earlier you dont have to be late on your mortgage payment, you dont have to be facing a foreclosure, if youre simply upside down because you refinanced your home or purchased too recently and the house next door is selling for $100,000 less than yours and you just need to get out of a bad financial situation, youre a candidate for a short sale or even a loan modification.
One of the things about loan modifications that I hear all the time is, and I research other loan modification companies, and what I hear is they are telling people things that just arent real. For instance if your owe $400,000 and your house is worth $300,000 and you want your lender to forgive $100,000 on a loan modification, chances are that isnt going to happen, whereas with a short sale, when youre exiting the property because it just isnt going to work, they would in most cases consider doing that.
Absolutely if that is the market value of your home they are going to consider the bottom line, the banks dont want these properties back, it costs them so much money to go through a foreclosure process and as our prices are falling, monthly, weekly, daily, the likelihood of the value of the property being extremely lower by the time they get the property back is 100%.
In addition to the $60,000 in foreclosure cost, paying real estate commissions and a few other fees is significantly better, because the loss is going to be significantly less with a short sale. Heres a question and I hope that I am not putting either of you on the spot, but suppose the guy owes $400,000 on his house, lets just say its worth $300,000 and you get the listing and this guy is out at a cocktail party and his cousin shows up and says, Ill buy the house from you. Ill buy the house from you, we will make the bank pay the difference and Ill just let you stay in the house. Is that a realistic situation, is someone going to find out about it? Is it good to do that or not?
In real estate, real estate purchases and transactions have to be non-arms length. Now arms length is described as your parents and your children, other than that we pretty much stay out of it because theoretically, yes that could happen, however the banks want to see that the homeowner is not benefiting, so the homeowner would have to become a tenant and be paying rent to new owner at that point. So there are many legitimate situations where you could meet someone who would buy the home and allow you to stay in the home... 
Facing Foreclosure on Your Real Estate Mortgage, Short Sale & Loan Modification are Alternatives. Hire an Expert Short Sale Negotiator, Experienced Real Estate Agent. Go To http://RealEstateMarketingThisWeek.com
Part 6 (Excerpt)
Hire an expert negotiator to work for you whether for a short sale or a loan modification
Alright so getting back to the person that is looking to do a short sale how do they start?
Well obviously, call us. The most important thing as we have been saying throughout the program, call somebody as soon as possible take it upon yourself to get the education. Education is your most important asset in hard economic times. So take it upon yourself if you have a lender or you have a realtor that you prefer to work with ask them about it, but make sure that you get their qualifications in dealing with this situation. Not every realtor chooses to deal with short sales.
In fact our team actually negotiates on behalf of other real estate teams for their clients, we allow them to keep the listings but we do all the negotiations, because most realtors dont want to do it, its a not an easy process and its not something where you want to be a guinea pig for your mother in law to be doing. If you have someone who is not experienced, talk to them about working with us. We would be more than happy to do that as well. Were not opposed to that as well.
Thats great because since the Velocity of Money show has been on the air, Velocity Financial works with several different realtors, we have had the opportunity to have a couple of great short sale experts on in the past and of course Jeri, you and I have spoken about Cheryl Willis, for example is a great realtor and a great example of an expert.
I like the team concept and the fact that you do the negotiations as well, between the two of you, you have 20 years of real estate experience and not being afraid to pick up the phone and negotiate on behalf of the homeowner is huge. I am really glad you have taken the time to learn that and take that extra step because lets face that is a job. That Is not really easy.
We have personal experience with these types of situations, friends and family members that are going through this and we understand them. I have been doing short sales for several years, before most people wanted to do them, and I didnt want it to become my whole entire business because its so difficult, but after having gone through the experience with so many people it has really become my mission to help people in this situation, because its so hard and a couple things that I pride our team on is; #1 were not trying to get you out of your house, were not just looking for another listing at all.
When we do an analysis of somebodys situation almost every single time we talk to them about doing a loan modification, as you know because if we can keep them in their house that is the best for everybody involved. Short sale is the second option and you want to make sure that you have someone that is experienced to negotiate on your behalf and that they really have your best interest at heart.
And now is the time, when all of us in the real estate, mortgage industry is to look out for the home owner, like we said earlier today and heck we have said on the show many times, and Jeri and I have talked about this several times. The more people we put into loan modification space, short sale space to get through this nightmare, the better off everyone is going to be. One thing that is interesting to point out real quick is if you do a short sale instead of a foreclosure you qualify to by a house inside of two years in most cases... 
Facing Foreclosure on Your Real Estate Mortgage, Short Sale & Loan Modification are Alternatives. Hire an Expert Short Sale Negotiator, Experienced Real Estate Agent. Go To http://RealEstateMarketingThisWeek.com
Part 5 (Excerpt)
In a Short Sale make sure you hire an expert negotiator who is a full time real estate agent
If youre in trouble and you think you want or need to do a loan modification, we work with a national network of attorneys that are here to help your situation, and this show were talking about short sales because a loan modification is not for everyone. A short sale is a great alternative to a loan modification, the reality is if you can do a refinance that is more than likely the best case scenario, if you cant a loan modification is a great tool, the reality the retainer for the law firm is less than a refinance, but if those arent the options for you, you need to call Jeri and Kalyn here and they are the short sale experts.
Kalyn in the last segment we talked about where people should start the process and the reality of it is youre saying they should start now, right? They should start it now we dont care at this point whether you have a foreclosure date already or if you dont or if you know you need more information about this you need to call us today. Were happy to come over and give you a free consultation, no obligation we will just sit down with you and review your full situation and we will be frank with you and we will be honest and we will help you make the right choice for your financial future. Relieving you of pain or debt or whatever you have going on were the experts and we want you to call us.
Nobody wants to hear false truths or false promises its so easy for people who right now are facing foreclosure, for any number of reasons, its easy for them to bite onto anything that sounds like what they want to hear. The reality of it is they need to hear the truth as harsh as it is and youre going to tell them the truth, and that is your job, youre not going to tell them anything that they dont want to hear. Nobody wins in that case.
If we dont know that we can close it we will not even take it, we will be honest with you. That is so important, again talking to, because every single day I do talk to people who call in from the show and we talk about this, the reality of it is it is not going to do anybody any good if it doesnt work out, or we dont know if its going to work out, or we dont have a really good idea that its going to work out on their behalf, and in the case of a short sale as well as a loan modification this has to be a win-win.
The homeowner that is in this situation they need out and a short sale may be the right option. The lender sure as heck does not want the house back even if they are required to take a loss its a significantly better option for the lender then a foreclosure. Going back to a few minutes ago when you said youre making these calls to India and everything else, I had the opportunity last week to teach a contract writing course at Paradise Valley College, Lynn Phelps the Phd there at Paradise Valley Community College allowed me to teach this finance class and there were several people who were getting their real estate license. Most of the people in the class were thinking that real estate was an 8-5 job.
No, Not even close. I thought it was going to be glamorous. I love it, I do love it but its more of a life choice. Its a lifestyle, I remember when Kalyn was first coming on my team and that is one of the things that is most important to me is that the agents on my team understand real estate is not a career as much as its a life. It really is, you work when other people dont work and you work when they work.
That makes perfect sense and its not the 9-5 job that it might have been in the middle of 2006, and maybe your job isnt very fun in the beginning of September in the middle of the day on Sunday, probably a little hot and sticky out there but now Kalyn you have been in real estate now for about 9 years.
Youre the team leader for the Dream Vesting group and a certified negotiator is that correct. Yes. And you Jeri as well have been in real estate for 9 years. Yes, almost nine years. I am an associate broker so I am excited about that, I took the class almost two years ago and finally decided to take the test and take the plunge.
Well good and that is a great accomplishment and you also have extensive experience in property management is that correct? Not property management, property sales management. I actually ran three different condo projects back in 2006 when it was fun to be a real estate agent. I helped actually with the acquisition of the properties, the development and then the sales, and then ran the sales teams and I ran three real estate offices as well. Very nice so the condo conversions are what youre talking about back in 2006 in the day right? Yes... 
Facing Foreclosure on Your Real Estate Mortgage, Short Sale & Loan Modification are Alternatives. Hire an Expert Short Sale Negotiator, Experienced Real Estate Agent. Go To http://RealEstateMarketingThisWeek.com
Part 4 (Excerpt)
If facing foreclosure call a short sale expert and get working on your short sale today
The lenders, its the loss mitigation departments that youre dealing directly, with the two of you doing the negotiations on behalf of the homeowner. Good, and then do you contact the lender immediately when someone calls you, and were going to talk about when they should call you in just a few minutes, but when the homeowner calls you do you immediately contact the lender and find out when the foreclosure date is and try to get that pushed back?
We do that as soon as possible, we can check the foreclosure date on tax records, if there is one that has been set, but there is some paperwork that is involved before we can contact the lender, because the lender will not just speak to anyone on behalf of the homeowner. You can get a lawyer and they will not talk to your lawyer unless they have authorization in writing from you the homeowner to speak about their financial situation and their mortgage on their behalf. So we do have some paperwork that we have clients do and the first thing is the authorization letter, as soon as we have that we can begin speaking to them on your behalf.
So Kalyn the next question is, when should someone start the process? Now. Honestly if youre listening to us right now and this is striking any sort of nerve you should be calling us. If you have concerns about being able to afford your home, or you cant sell it, if youre in a situation like going through a divorce, going through relocation like Jeri mentioned, all of these situations are possible short sales and you definitely should be on the phone now because too many times we see where people are in denial of whatever the situation may be and finally they are two weeks before foreclosure date and they are calling us.
We dont have enough time with just two weeks. There is too much involved for us to get the foreclosure extended, get an offer, get all the things that are included when you only give us to weeks, and then where are you, a lot of the time they dont even have a place lined up, and if you have a foreclosure on your record its a lot harder to get a rental.
Yes the foreclosure has significant impact on your credit report where as a short sale could be potentially much better. Maybe the foreclosure process will be started during the short sale process but not having it completed is better than having an actual foreclosure on your record.
Absolutely, the foreclosure proceedings started will not even show on a credit check if a landlord or a management company is pulling your credit to approve you for a rental, but its the worst thing in the world if you have gone through a foreclosure and youre just now calling us. I have some clients who need to be in a house this weekend and they have a foreclosure. They contacted me after the foreclosure had gone through and you would think that people would understand with the number of foreclosures going on that would not be as harsh on your credit but its. Were having a really difficult time finding landlords that will accept people who have foreclosures on their credit.
Me as a landlord, my wife and I have several rentals and I were to look at a credit report and see that a foreclosure proceeding had been started but the homeowner and potential renter says, we started it but we were able to sell the house short so we didnt have to go ahead with the foreclosure. That absolutely would be someone that I would consider over someone that had a foreclosure because it shows that they care, they certainly tried their very best, so I would think that is a great situation to be in. So two weeks left before your sale date is too late, its not going to work out.
Well I have recently done one in ten days. So it can be done, I had a one ten days before the foreclosure date and I had the bank put out the foreclosure date about a month and a half and we will close a short sale on that. 90% of the time though we wont be able to help you with that little of time.
Well the hardest part about the process is the beginning process, getting the lender to even acknowledge that they have received the authorization letter or the information packet that we have sent, the financials and the offer. You have to understand that lenders have thousands of foreclosures going on and they may have 20 bulk fax machines in their offices and as the paperwork comes through if its not that persons paperwork it may get tossed. That process alone can take 30 days before they even tell us they got what they need. 
Facing Foreclosure on Your Real Estate Mortgage, Short Sale & Loan Modification are Alternatives. Hire an Expert Short Sale Negotiator, Experienced Real Estate Agent. Go To http://RealEstateMarketingThisWeek.com
Part 3 (Excerpt)
Short Sale Objections, Advantages and Hardship Letters; Keeping the Home Owner in the Home helps fight vandalism
One of the things I mentioned at the beginning of the last segment is this special allotment of funds that we received from one of our mortgage banks that we currently have available, a 30 year fixed, no pre payment penalty this is the real deal just what youre looking for a 4.875% interest rate with an APR of 4.95% and that is available we do have people at the office right now if you have questions in regard to that they can answer them for you. You would call 480-Velocity
Michael, I have some clients who are buyers that would love that rate. Is that available to buyers as well? Actually, yes its that rate is for a no cash out refinance, no higher than 80% LTV, they have to have perfect credit to hit this number but even in some cases, well with this particular loan there are some closing costs, but one of the things we have available too is a no cost option and that interest rate is for people who are doing the purchase or refinancing and that rate is only 5.5%. The interest rate is 5.5% and the APR is 5.5% so that is for purchase money as well.
Were back talking here with Jeri League and Kalyn Roberts, were talking about the objections to doing short sales, there is another one you wanted to point out Jeri?
Yes, one more objection that people often have when we talk to them about their particular situation is that people feel that they have to be behind on their mortgage payment in order for a bank to consider a short sale and that is not true, the bank analyses everyones entire situation, we have people write a hardship letter, they want to see your financials and there is an entire situation not just being behind on your mortgage payment.
Your hardship may be that youre being relocated by your employer and you simply cant sell your home for what you owe on it due to todays market conditions. The banks will definitely look at that.
People think that the key is that you have to be late but that is not the case. That is really good to know, so we talked about the objections or the pitfalls rather what about the advantages to doing a short sale?
The biggest advantages to doing a short sale are: that its less impactful on your credit typically than a foreclosure and one of the most exciting benefits is that we can often extend the foreclosure and keep you in your house longer. In Arizona banks have a right to start a foreclosure as soon as youre over 30 days late on one mortgage payment. In todays current economic situation most banks are not starting that process for three to six months, but again that is most banks. They can start after one month.
Yes, but once they start the foreclosure process its a 90 day process in Arizona. So you will get a notice that says basically you have 90 days to come current with the note or to move and they are taking your house and selling it in 90 days. Now once we start the short sale process many times we can extend that foreclosure date.
I have personally done one that we had the home owner in for almost a year from when they stopped making their mortgage payments. Its not uncommon to be two or three months past the original foreclosure date that they gave you which of course gives people a lot longer time to decide what they are going to do, especially if its a family, they are not in such a rush to move, they can keep their kids in the same school district, there are so many reasons that that is a good advantage.
So Kalyn the truth is that homes that are occupied generally are better off and easier to sell than vacant homes right? So long as people are in the house and taking care of the house, if the house looks lived in but not trashed. What youre saying is lenders would just as soon leave them in the house then to have it vacant and potentially vandalized.
Definitely, the lenders prefer to have somebody living in there because they are taking care of the home, like you just said when the homes are vacant there is a high risk of them being vandalized, unfortunately and the worse the economic situation in the country gets the higher the vandalism rate on homes goes. In fact we were talking with a realtor in our office who typically takes listings in some of the lower income areas in town and they are going to stop putting signs on vacant listing because they are getting vandalized so much. 
Facing Foreclosure on Your Real Estate Mortgage, Short Sale & Loan Modification are Alternatives. Hire an Expert Short Sale Negotiator, Experienced Real Estate Agent. Go To http://RealEstateMarketingThisWeek.com
Part 2 (Excerpt)
Short Sale and Loan Modification; Make sure your Work with and Expert
Were just going to go ahead if we could and just jump right into the short sale information. Jeri, again thank you so much for taking the time to be with us. What is the name of your firm?
Our group is Dream Vesting Group and our brokerage is Keller Williams Arizona Realty.
So that is great, licensed agents with Keller Williams and I know the two of you and I know of your history and we will talk a little bit more about that, but you have been working together for awhile. You and I had a chance to speak about the short sales and your success rate, very, very impressive proven results always helps. So the natural first question for those that are listening today. What is a short sale exactly?
A short sale is a property sale where the bank or lender agrees to accept less than what is owed to them. So the bank is agreeing to take a loss on the sale of your property, and I like what you said earlier about not trusting a loan modification or a short sale to just anybody, you definitely dont want to be the guinea pig and you dont want to approach the bank yourself and ask them to please take a loss because you need to sell your home.
And that is one of the things that is funny nowadays. I know people have seen them pop up all over the town, the ugly yellow bill boards all over the place. Advertising on the radio about loan modifications and they have 100% success rate, all kinds of these different things. The same thing with short sales, you actually have a process and you have a lot of experience doing it, you know the ins and the outs and this isnt a part time job this is a fulltime job.
Absolutely is a fulltime more than fulltime job, the last three Sundays I have been on the phones with lenders when they are open, one of them has a call center in India. I have been on the phone from 10 oclock at night until Midnight and again at 6am with the same lender trying to stop foreclosure.
Well that is good that you have the time, Take the time to do that. I am sorry that you have to work that many hours but you know Kalyn, is it not true that the sooner we get through all of these short sales and loan modifications the better off were all going to be anyway right?
Absolutely, a lot of people ask, what does it take? Who should be considering a short sale? If youre late on your mortgage currently, if your mortgage has adjusted, if you can no longer afford your monthly payment, if you foresee yourself not being able to afford your monthly payments, any of these instances plus several more, you should definitely be sitting down with someone and talking about your options which would be most likely a short sale or loan modification.
Yes the last thing anyone wants, and I mean anyone, is a foreclosure, that is the last resort. Nobody wants a foreclosure; you dont want it on your record, you dont want to have to deal with that. Its a very public event, a foreclosure is, the banks dont want you to foreclose and that is probably why they are so willing to work with you would you say? Absolutely the banks dont want the home back no matter what they tell you.
Exactly and on the loan modification side people try on their own to do this and its true that people can actually do a loan modification on their own but there are so many pitfalls and its just not something you want to try on your own. Surely you dont want to try a short sale on your own. So Jeri let me ask you this, what are some of the main objections?
The main objection that we hear from most of our clients is the cost to them, they already cant afford the payment on their mortgage or they wouldnt be in that particular situation 9 times out of 10 and so they are concerned about cost. Most people have already resigned themselves to the fact that they are losing their home and they dont want to spend any more money on it.
The good news is in a short sale you dont have to spend anymore money, all of the costs are absorbed by the bank. They agree to lose more money basically, so there is no realtor fees and the majority of the time we can negotiate an as is contract so if there are repairs that need to be made they dont come to you and ask you to do it, its just factored into the cost. So its very effective for homeowners.
And again it keeps them from going into foreclosure. They get to stay in the house and they get to save whatever is left of their dignity, some people take it very pride fully as well. So Kalyn, the second most common objection is? 
Facing Foreclosure on Your Real Estate Mortgage, Short Sale & Loan Modification are Alternatives. Hire an Expert Short Sale Negotiator, Experienced Real Estate Agent. Go To http://RealEstateMarketingThisWeek.com
Part 1 (Excerpt)
Shorts Sales & Loan Modifications; Great Alternatives to Foreclosure
Kalyn Roberts and Jeri league, welcome to the program. Jeri and Kalyn are short sale experts and have graciously decided to come to the program to discuss some of the short sale important things that people do need to know, and were going to get to all of this short sale information, but a couple of things important to mortgage interest rates. Today is a fantastic day in the mortgage rate world. Leslie and Staci at Velocity Financial were kind enough to put together a scenario for us so listen to this folks.
This is not the teaser, this is not the loss leader, this is the real deal as of today, a $417,000 loan amount, the interest rate is 4.875%, thats 4.875% that is below 5% obviously, the APR is 4.948% and that is for a no cash out loan, and that is a special rate and we have a certain allotment of loans that were allowed to do at that special rate. If youre interested in talking to a member of my staff or myself or anyone else about that program you would call. There are people there standing by to take your phone call.
Were a local licensed firm and one of the only 15% of the mortgage companies in the state of Arizona that is licensed to do FHA loans as well. Any mortgage related needs that you have were here to help but for the next hour were going to be talking about Short Sales.
Now over the last several months we have been talking about loan modifications on the show a lot, Velocity Financial was one of the first companies to work with a national network of attorneys, a 16 year old firm that were working with. They have done thousands of these loan modifications, and the loan modification industry in Arizona is for the most part unregulated, but you want to make sure youre working with a licensed firm, and you want to make sure youre utilizing an attorney.
You dont want to be giving money to anybody that says they can get you a loan modification, the only money you give is to an attorney, dont be giving money to people who come by and say they can help you out. Youre going to have to be very careful on how you handle that, but interestingly enough the loan modification is for the mortgage side, essentially the loan modification is to the loan officer what a short sale would be to a realtor.
Now the short sale part of real estate is not something you want to trust to somebody starting out doing short sales, unless they are being supervised by a pro, you dont want to mess around with it. This is not a time to be trying it out, this is not a time for people to be using you as their guinea pig, not a good idea at all.
That is why we brought Jeri and Kalyn in and were going to talk about some of the specifics. You definitely want to make sure that if you need to do a loan modification, if youre facing foreclosure or you want to do a short sale, whatever scenario is the better decision for you and your family, you have got to work with a professional, Jeri and Kalyn have extensive experience, they have an unbelievably great success rate.
It doesnt have to take six months to get this done they can execute this thing for you and they are the pros so were going to go through some questions over the next hour, there is just one more thing I want to talk about and that is if a loan modification is something you think you need call the office and we have put together a video for you that you can watch, its very short, it explains the process and we will then get together with you and answer any questions that you have... 
Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com
Part 8 (Excerpt)
The pitfall of forcing your bank to rescind your loan for lending violations
I have a question on that, it is my understanding and I could be wrong, but they dont need a copy of the note, they need the original note.
You are correct. Your attorney of course will get a copy, because they are not going to send them the original.
Items that your attorney is going to ask for, and I forget the number, I think its 47 different items that the attorney could ask for. Heres one. I've been in the industry for 20 years and I just heard this term a couple months ago, it's known as an alonge. What the heck is an alonge? Well apparently it's one of the documents that has to be in the file.
While essentially the whole purpose of this is to catch the bank, the lender having messed up your loan somewhere along the way. Because if it is true that they violated some kind of Federal Law in the past when they gave you the loan or are in violation of the loan now, you can then take them to court. And you can sue them. You can have your loan rescinded. Which basically means it comes off your credit report. This loan never happened. As good as that sounds that may not be the best thing for the home owner.
I want to back up just a little tiny bit, you mentioned the alonge, there's more to the alonge then it sounds like. The bank needs to have the original alonge, more importantly, the person who signed the alonge has to have been authorized by the licensed entity to sign that alonge. And I know for a fact that several people in this town, in this industry, were signing alonges because they needed it signed before the loans could fund. And they were not qualified to sign.
So let's go back to this discovery process, when we find the lender has to rescind. And I will admit after being in the real estate and mortgage industry for over 20 years, I would have to say that almost 100% of the loans that are originated, if you look at them hard enough you could find something wrong with them. Something wrong, where there could be a reason for you to rescind this loan.
So let's say you go to that point and push it and get the bank to rescind your loan. Here's the problem. The loan is gone, it is no longer on your credit report, but let's say you have a $200,000 loan you took out two years ago, in that time, you would've paid about $35,000 in interest. You get a credit for the 35,000, and let's say you had attorney fees to fight the bank, let's say $10,000, I don't think it would be that high but we are just throwing out numbers here. And $5000 in closing costs when you bought the house, so that total is $50,000. You get a credit for $50,000 off of the $200,000 loan, which means you still owe $150,000 on the house. You have to pay the difference.
You have to pay back to the bank $150,000. So its nice that we filed suit and won but frankly in this market where are you going to get the $150,000 from? I think it would be very difficult to find a bank or lender right now that will lend you $150,000 for your house. Chances are you may be several months behind on your payment and although the lender cant show your payment history because the loan was rescinded more than likely the new bank is going to say they need a mortgage payment history. And you say you have been in the house for two years, but the loan got rescinded and they say you need payment history, you cant produce it.
In this marketplace today you are not going to get that loan done. And so the attorneys know that and that's why once they get the lenders attention they say to the lender, we dont want to rescinded the loan, we dont want to incur a ton of attorney fees but we will if we need to, if you dont want to play ball with us. What we want to do is to work together to get the best possible loan modification for our clients. So we can keep them in their home, keep their family intact.
The reality of a it is, here what we are doing we are working with a national network of attorneys that care about you and you first.
You can go to http://mortgageanswerman.com where there's going to be information about everything including, one thing I'll add really quickly. I have something there that is known as a Decision Matrix. The Decision Matrix will walk you through step by step by step, every single step of the process regarding what you should do with your property, should you do a short sale, should you do loan modification, should you just let the bank foreclose? Is bankruptcy an okay idea for you, or not? What are the tax consequences?... 
Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com
Part 7 (Excerpt)
Attorney negotiated loan modification process Going thru the Legal Door
We have Dan Havey with us talking about loan modifications. This segment we want to talk about the specifics of the actual mechanics of, how does it actually work for the homeowner? Let me just start it off and if you would then explain the back end of how it works. Our job is to determine where you're at now, be very specific about where you're at with your mortgage now, what the rate is, what it's done, those specifics. How much you make? We have to help the lender with one thing which is to establish a hardship which is crucial to this. You can't be making half $1 million a year paying $5000 a month in a mortgage, they are not just going to lower your interest rate because you want it. There actually has to be some sort of change, financial change, hardship.
We determined that and then there is a significant amount of paperwork involved, Velocity Financial takes care of that for you. We fill out the paperwork along with your help, review all of the documentation, we then recommend be right loan modification, whether it be an interest rate reduction, or extending the term of your loan, waiving some of the balance that you owe which is very very rare. To make sure that once we're done with this whole process you can sustain and live in that house and be happy forever.
So the process itself really is not that much different than what people went through when they got their loan in the first place. That is correct and it's kind of funny, this has to be exactly the reverse. There is paperwork that we need to collect on your mortgages, we check the value of the property to see where you're at and in most cases youre underwater with the value. We dont do an appraisal though, there is no credit analysis, we do review your finances, and these sorts of things but essentially it's just like doing a loan. What we're trying to determine is exactly what is sustainable for you.
So what we do at the modification hotline at Velocity Financial is to put together the entire package, just like we do for a loan package because we basically send this to a underwriter, theyre not known as an underwriter they're known as a loan modification coordinator but at modification hotline we are the first set of eyes. We work with you directly, getting all the paperwork in, getting it put together because we know exactly what has to be in that file, how it has to be stacked, how it has to be presented, before it goes to the loan modification coordinator who works for the attorney.
Then once it is at the attorneys office with their modification coordinator, they take a look at it, they make sure that everything is in there, they make sure that it is a doable modification. This all happens before it is ever presented to an attorney.
There are a whole lot of steps and there is a lot of paperwork. The process like you said is very similar to a loan with the exception that there are no costs of the title company and all that other stuff. Those dont exist, we dont charge an upfront fee, and we do collect a retainer for the attorney. At some point during our process we make our recommendations and we turn it in. Then the attorney does their due diligence and thats where I really want you to explain what happens, what are these attorneys looking for?
Well this is where it completely goes off track, versus what a homeowner would do if they were doing their own modification, because they would do everything we just talked about, they would fill out the paperwork, get together tax returns, pay stubs, whatever the lender wanted and they would present all of it to the lender. Now they probably wouldn't know exactly how to stack some of the paperwork, and how to calculate some of the things that we know how to calculate, but they would put all that they work together.
Where the difference comes in is once it gets to the attorney because the attorney ultimately wants to get you a loan modification but they can't just call up the bank and say hey I want loan modification, because he is going to get the same result you did. So what he has to do is he has to go through the file, and he has to look for things like, I am going to use a bunch of acronyms here, he's looking for things like TILA, RESPA, HOEPA, HUD violations, all these different guidelines that the lender was required to meet while giving you the loan. 
Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com
Part 6 (Excerpt)
Fannie Mae is proposing to give you a 50 year loan with an adjustable rate
The next one is that your loan to value on your house has to be at least 90% of the property value. So in other words everyone under 90% gets foreclosed on? Right, if you only owe 80% of what your home is worth, they can foreclose on you, take your house and they dont lose as much money.
Back when I was working with Fannie Mae selling repos almost 20 years ago now, they always gave us the figure that they lost 20% of the homes value every time they had to foreclose. So they have plenty of room to sell your house if you only owe 80% on it. So if you owe, lets just throw out some numbers here, lets say your house is worth $100,000 and you owe $80,000 on it, well they are going to lose a little bit but they are going to make it back when they sell your house for $100,000.
Yes, they would just as soon kick you out and keep their money. Yes, exactly I am not necessarily going to say that Fannie Mae is going to kick you out of your house, however the reason why they have this guideline is very simple, they are not going to lose money on you if they have to foreclose on you when you are under 90%. They certainly are not going to lose very much money.
If you have subordinate loans it may be left outstanding and will not be considered in the LTV, so lets just give an example here, your house is worth $300,000 and you have a $300,000 1st mortgage and you happen to have a $50,000 second mortgage. They will re-modify your 1st mortgage but leave the 2nd mortgage in place. So people get to stay underwater, or upside down.
Well certainly you would be in that case and it just does not sit right. The best thing I certainly would like to see them do if nothing else in a situation like that is combine it all into one loan at a much lower interest rate. Because you know that 2nd mortgage is probably going to have a high interest rate. So it would just be so much better.
We need verification of income that makes sense. Here is one I dont get, 38% as far as your debt to income ratio. That seems kind of high to me. What do you think Michael?
Well I think that people who have gotten themselves into trouble and they need to do something like a loan modification then 38% is probably on the high side. People need relief, but they need relief that is going to last a long time. Even though this is essentially a trial-period loan modification this particular guideline of 38% really does not set well with me, I personally think it needs to be lower. People need a break; people need to be able to stay in their house.
Well what I was looking at is your average family; I always think probably pays about 30% of their gross income towards taxes, payroll, and things like that, so right off the bat Uncle Sammy takes 30%. Well now that Fannie Mae and Freddie Mac are owned by the government Uncle Sammy is going to get another 38% out of your paycheck which is a total of 68%, that doesnt leave a whole lot of money does it? Especially if you have a car payment, or you have kids to feed, maybe who go to daycare while you go off to work, assuming you still have a job. The unemployment rate is pretty high.
Well in order to qualify for this you do have to have income so you do have to have a job. So moving on to the next one because we are getting a little short on time, what they are going to do is take all of your back interest, escrow advances, costs, fees, everything they are going to add it to the loan amount and have you pay it back over as much as 50 years, if they need to stretch it out that long. Theyre going to give you a 50 year mortgage? I looked at that and thought, why dont you make it interest only because you are never going to pay the thing off anyway.
Lowest acceptable rate that they'll have is 3%. The real kicker, if they get you a rate of 3% it will be an adjustable rate because it's below today's market rate. Your rate will actually increase starting five years from now at 1% per year until it gets up to the market rate. So not only are they getting a 50 year loan that you will never pay off, theyre giving you an adjustable-rate loan on top of it. If they give you 3% today it will begin to adjust up in the five years until it reaches today's market rate. I think today's market rate is about 6%, so you may get 3% for a couple years but eventually they go back up to 6%... 
Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com
Part 5 (Excerpt)
New Fannie Mae Streamline Loan Modifications may do more harm than good
We do realize that there are situations that people are in that they want to be out of and we want to move past. We have back in the studio, the author of Real Estates Future also the author of The Foreclosure Sharks white paper, a fantastic manual that he has put together that you can get for free. Dan Havey thank you very much for coming back. You can get a copy of the white paper The Foreclosure Sharks at http://mortgageanswerman.com.
So Dan I know that you have brought the just recently released new Fannie Mae, Freddie Mac guidelines, with their streamlined modification process. This is the kind of thing where the consumer can go and do-it themselves, right?
Yes, except that we would certainly advise against that. These are the guidelines that Fannie Mae came out with; they are effective as of a couple weeks ago now. But with Christmas and the holidays I dont think a whole lot of people have figured out what this is all about yet. So as we said in the last segment the guidelines that they have come out with here, and what I have is a print out but I dont know that this is the whole thing because I have heard some commentary on this that actually says that it is much worse then I am about to relay to everyone on the air.
I am just going to pick out a couple points about this and then I will let Michael laugh about them because some of these things are just crazy in the fact that it doesnt really help the home owner and I also dont think it is going to move us past the conditions we have to get people some really good loan modifications, the kind of loan modifications that we are talking about where you actually employ an attorney to help you with your loan modification.
The reality of it is we need to get through this mess we dont need to stave it off, push it out further and in my opinion that is what this does. That is exactly what is going on here, there was an article I was reading by Fitch, which is one of the major bond rating firms and that is exactly what they said. They said that the alt-A arms are all coming back to roost now, I think the default rate was over 14% on all alt-A arms, being at least 90 days past due. And the comment in the article was something like, well we havent really seen a lot of losses from it yet and then it said in a caveat at the end, and we think its because they are not really foreclosing on any of these guys yet, so that is why they havent seen any losses. Well if you keep pushing it off into the future eventually you are going to have to see some of these losses.
We have the same thing here with Fannie Mae, which I think it is just another band-aid; it is not going to really solve the problem. First what they have here, and this one is pretty benign, that once they give you the new mortgage payment you have a three month trial period. If you make the payments during that trial period they let you keep the modification. So that one is not so bad.
The next one says that the qualified borrower cant be in litigation, bankruptcy, or have an existing work out plan, and you have to be at least 3 months behind or in foreclosure in order to be eligible for this streamline.
Ok I get to comment right? SO basically what Fannie Mae and Freddie Mac just told everyone, according to this that I am reading right here, Fannie Mae and Freddie Mac just told you to be 90 days late on your mortgage. That is exactly right, they said that the only way they were going to be able to help you was to be 90 days late on your mortgage.
So I have been, over the past several months, heck Dan you helped us put together the package, you are the cofounder of the modification hotline and I am on the radio every week when we do a little blip about load mods from time to time, saying dont trust anybody who tells you to be late on your mortgage. First of all no loan professional, no mortgage professional, no loan modification specialist will tell you to be late on your mortgage, however, Fannie Mae and Freddie Mac just said you need to be at least 90 days late on your mortgage if you want them to help you. 
Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com
Part 4 (Excerpt)
The pitfalls for trusting your bank one more time; Beware The Foreclosure Sharks
This whole loan modification thing reminds me a lot of the old Peanuts comics where every fall Lucy would get out with the football and she would set it down on the ground, and she would coerce Charlie Brown into coming along and kicking the football. Well of course as we all know Charlie never got to kick the ball, Lucy always pulled it out from underneath him and I kind of look at the mortgage industry, the servicing end of it in particular that way.
You have to think about it, in many cases the loan that you were put into was not a good loan in the first place. The person who gave you that loan knew it was not a good loan, the Wall Street banks that came up with these crazy ideas should have known better. Now admittedly they didnt otherwise they would not be out of business today, but they should have known that these were not good products.
Yet when you are faced with an issue regarding your house so many people go back to the bank, like Charlie Brown going back to Lucy and believing that THIS time Lucy is not going to pull the ball away. Well what is going to keep the bank from not pulling the ball away from you this time? Absolutely nothing.
I love that analogy; everyone remembers the Charlie Brown show and the comic books like you said. Another thing I want to point out too, going back just a little bit, you mentioned the lenders who put these home owners into these loans knew that they were not good loans. My thoughts after some of the mods that Ive seen, that you and I have seen doing the forensic audits, the home owner could have qualified for an FHA loan in those times, but it was so much easier for banks to put them into these sub prime loans because the documentation was easier, and it was just easier.
It is not just that they are easier; I know that your firm, Velocity Financial is FHA approved but what percentage of lenders today when, we probably have maybe 30% as many lenders as we had two years ago, what percentage today is FHA approved?
In the state of Arizona, of all the lending institution, less than 15% of all mortgage firm, banks, credit unions, less than 15% are licensed by the federal Housing Administration. Velocity Financial is proud to be one of those firms.
What I saw back in the peak of the market is of course everybody thought that real estate was going to go up for ever. Every body wanted to jump on board and buy 3,4,5,6 properties and I always tell the story that I knew we were in trouble, I knew we were hitting the top of the market long before I developed any of the models for Real Estates Future when I walked into our bank one day and I saw that they had a loan that was 100% financing for someone to buy an investment property and they didnt have to prove their income and they only needed a 620 FICO score.
Which considering everything now, I mean, to get a Fannie Mae loan today what kind of a FICO score do you need? If youre an investor? If youre an investor you need 720 and probably 20% down, at least 20% down and certainly it is not stated income anymore. No that doesnt exist, and significant cash reserves, the whole nine yards.
So these banks knew the kind of garbage that they were giving to people and yet we are supposed to trust them to get us good loan modifications. I think that in one of the later segments we are going to talk about the newest guidelines that just came out from Fannie Mae and Freddie Mac regarding their new fancy-schmancy loan mod program and to be honest with you I dont think it really does much for people at all. We will talk about that in the next segment and to the people who are in the mortgage or real estate industry or who have been in the real estate or mortgage industry it is going to sound a little bit like a comic bit because this might as well be bath tissue, I dont even know why they came out with it.
We are going to talk about that along with a few other things, so real quick I know we havent had too much of a chance to talk about The Foreclosure Sharks, Dan but we will touch on that a little bit later. How do people get a copy of this white paper, The Foreclosure Sharks these are things that people need to be looking out for?
Yes, for The Foreclosure Sharks you can go to my website, http://mortgageanswerman.com. There will be a link there you just click on it and pick yourself up a copy and it will help if you are in a foreclosure situation if people come knocking on your door it will help you to at least know what to look out for. So mortgageanswerman.com for The Foreclosure Sharks... 
Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com
Part 3 (Excerpt)
Re-Default rates on Forbearance Agreements done with banks reaches 58%
In studio with us today on this fine New years eve is Dan Havey, the co founder of the modification hotline as well as the author of The Foreclosure Sharks a great white paper he put together. He is also the author of Real Estates Future and this segment we are talking about loan modifications and some specific information.
You also have a great story to tell about this to. Well unfortunately I have too many stories about people who have had to go through foreclosures, bankruptcies, loan modifications. The one story I want to talk about real quick is a friend of mine who unbeknownst to me went out and did a loan modification on her own and not to get into a whole bunch of technical details on it she ended up getting a pretty decent interest rate because they actually cut her mortgage payment in half and she was pretty happy about that.
She owed a little bit more than the house was worth, she wasnt terribly upside down, but by the time they got done with her she certainly was going to be because the modification, and actually I should not call it a modification, I should call it a forbearance agreement, what they did to her was to say, OK we will cut your interest rate in half, we will cut your monthly payment in half, but we will take all of that deferred interest and tack it onto the back end of the loan. So that by the time her interest rate went back to where it had been, it was going to adjust up over the next five years, so that within that five year time period she was actually going to owe $60,000 in back interest on top of the principal balance that she had before she went to go talk to her bank.
What kind of a deal is that? I didnt think it was a very good one and she ended up eventually not taking it and just recently let the house go back to the bank, because she just looked at it and said, Wait a second here, I am already $20,000 upside down, by the time Im done with you guys I will be $80,000 upside down and so great I get a cheaper payment for a while. She moved into a rental property that was even cheaper then what she would have had to pay to stay in the house and from what she tells me the house is nicer.
Some of the unfortunate scenarios that come up that we get to see. Unfortunately we talk to lots of people that have similar situations, trying to do these on their own and it is possible to do a loan modification on your own. We know that, the program is designed for you to do that. The problem is it generally does not work out.
The re-default rate on loan modifications done on your own is significantly higher than loan modifications facilitated by an attorney that is representing you, for a number of reasons. Number one you have to pay an attorney to represent you. The other is that I think you are going to get a better modification based its not just a negotiation between you and the loss mitigation department for the bank. We are talking about using a professional attorney who is a trained negotiator to negotiate on your behalf with another attorney. By the way, theyre not talking to the same loss mitigation people in India that you may be talking too.
Here are some numbers that just came out from John Dugan who is the Office of the Comptroller of the Currency and they did a study of the loan modifications that have been done to date. In many cases these were forbearance agreements, not loan modifications. If an individual talks to his bank, generally speaking he will not get the same as result as what an attorney would do, so most of these are really forbearance agreements. And in that case, 36% had defaulted or were 30 days past due after 6 months and 58% were in default after 8 months. Again that is 58% in default after eight months and I saw some numbers the other day and unfortunately I didnt bring them in with me today, that according to some study of the very few modifications that have been done using an attorney, I say very few, but it is still thousands or tens of thousands, but few compared to what is getting done directly with the bank, the number is only like 5% of the ones done with an attorney have re-defaulted and again I dont have the numbers with me so I cant site the source... 
Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com
Part 2 (Excerpt)
Loan modification pitfalls when dealing directly with the bank
So I have seen all kinds of things on the internet about how you can pay $495 and you can learn how to be a loan modification expert overnight. Well I can tell you after having worked with attorneys for 20 years that you are not going to know the laws, like the attorneys do, you are not going to have the negotiating skills, like the attorneys do, just by reading a book and filling out a couple of pieces of paper. That does not make you a loan modification expert.
And then the important thing to point out here is even though we joke around here, Dan, Arizona is known as the wild, wild, west, there is no restriction in this state, at this time, for the loan modification industry. For people that are jumping in, for people who are trying to do it on their own, in their spare bedroom, or their old office in their homes, and nothing could be the scarier thing for a home owner.
You need legal representation; you dont want to pay anyone who is not a licensed entity or a member of the bar. That is what we do, we work with a national network of attorneys that work in all 50 states. They are experts and have done thousands of these over the last 16 years and that is why we aligned ourselves with them and why you and I came up with the loan modification hotline.
Well part of the reason why I would not do this any other way is, well several reasons. One is that you dont learn how to do this by reading a book and the other thing is when I was working with people in foreclosure I would have somebody call me the night before their foreclosure sale and say, Hey I have been working with my lender trying to get a forbearance agreement which is not the same as a loan modification, even though a lot of people confuse them, but that is what a bank will give you if you call them directly is a forbearance agreement. We are talking about something different.
But they would say, I have been working with my bank for the last 3-4 months and trying to do this forbearance agreement and finally they didnt want to work with me anymore, they disapproved it and they are done. So I have to ask them the story, what happened? They would say, I started the process four months ago and I sent them all the paperwork. And then what happened? Well they lost it all. Great, so what did you have to do? I sent it all back in again. Then what happened? Well they lost it all again. I cant tell you how many times I had clients tell me the exact same story that every time they sent in the paperwork, it got lost.
And then it comes down to the last two or three days prior to the foreclosure sale and the bank would say, we tried really hard to get that forbearance done but I am sorry we are not going to be able to give it to you. And it just barely gives the home owner enough time to do what I would advise them to do.
I am not an attorney in any way, but when someone is calling you at 9 pm the night before their foreclosure sale, I would say this is what you want to do, go get in line tomorrow morning at the bankruptcy court, file a bankruptcy yourself, and then here is a phone number of an attorney to call immediately afterward, retain him to represent you in the bankruptcy and also have him call the foreclosure trustee to make sure that they dont go through with the foreclosure sale because that is even harder if you have to unwind that thing.
This is what happens to so many people, I understand people wanting to do these loan modifications themselves, and I appreciate that we are a do-it-yourself kind of a society. But the truth is you are dealing with a monstrous corporation, you could be talking to somebody in Bangladesh, or in Ireland, or in some other country, who knows where they might be. They dont know you and they certainly dont care about you.
Well the other thing too is they work for the loss mitigation department of the bank and the loss mitigation department that you are calling. The important thing to point out about that is the loss mitigation department is there to mitigate the loss for the bank; the representatives job is to protect the bank at all costs. You need someone to stand on your side and protect you at all costs, and that is one of the things that we do... 
Home Loan Modifications Negotiated by Licensed Attorneys. Real Estate & Mortgage Laws and Guidelines are Complex. Beware of the Banks Loss Mitigation Department. Go To http://RealEstateMarketingThisWeek.com
Part 1 (Excerpt)
Why you should use a licensed attorney to negotiate your loan modification
Dan Havey thanks for taking the time to be with us tonight. Thank you Michael for having me and you are absolutely right 2008 for many people was a very tough year. Tough year for pretty much everybody that I know, how many banks have we lost in 2008? Hopefully the bleeding is gone; hopefully there arent too many more banks to fail. Quite a few banks have picked up some of the slack, but the reality of it is so many people have been faced with such hardships, we have solutions that we are maybe going to talk about today that they can look forward to, to make 2009 a great year.
Definitely that is what we are doing here with your organization at Velocity Financial and with the Modification Hotline and with many of the other things I am working on right now to help people out. When I first got into this business it was back in the late 80s, I moved here from Wisconsin after getting a degree in finance and I started selling repos for Fannie Mae, Countrywide, and the RTC. The Resolution Trust Corporation was responsible for getting rid of all the real estate owned by the over 1,800 S&Ls that failed. So I cut my teeth selling those reposed properties and got to know a lot about the laws and worked with a lot of attorneys and then in the mid 90s I moved into the mortgage business, and I immediately started there working with bankruptcy attorneys for the most part.
I was helping people get out of their bankruptcies, chapter 13 bankruptcies, to avoid bankruptcies, to stop foreclosures and I did that up until the fall of 2007 and at that point the market really changed for me as we know most of the subprime financing went away. Some people might look at me and say, my god you gave people subprime loans, well if you are in a chapter 13 bankruptcy and your payment to the trustee is $1,500 a month and I can get you out of bankruptcy and reduce your total monthly outlay by $1,200, your mortgage payment would go up a little bit, I think this is a really good use of a subprime loan. And I certainly never had any complaints from anyone when I got them out of bankruptcy or I stopped their foreclosure and saved their home.
So late last year I moved out of the mortgage business for a while but I never really left it because it is pretty much what I have done my entire adult life. Over 20-25 years I have been involved with real estate, mortgages and finance and I worked for a while for about 6 months last year on a model for an idea that we came up with of being able to accurately predict the top and bottom of all real estate markets and we perfected it for Arizona and most of California. It worked really well to the point that we could actually predict the bottom of the market 6 months in advance and then after the bottoms hit all across the country we kind of stopped working on it.
It is one of the things I am going to start working on again over the next few months. The title of the book is Real Estates Future and you can go to my website at http://realestatesfuture.com and get a copy of that if you want to, it is not available yet but just put in your information and I am going to give away a whole bunch of free copies of it.
The reason why I went through this entire story is because a few months ago Michael and Velocity Financial came to me and said he was going to do loan modifications and I had been approached by other people and I had seen a bunch of garbage on the internet and the thing that he said to me that sold me was, You know Dan, you have to understand, were using attorneys to negotiate these loan modifications.
And that is, I didnt mean to interrupt but that is the key; that is one of the reasons it took us so long to get in. Even though Velocity Financial was at the very beginning of this mad craze, heck you cant drive down the street without seeing a sign that says loan mod, kind of like back in 2006 in the heyday of the mortgage business where you couldnt drive down the street and see a sign that said, if your mortgage payment is more than 1% you are paying too much. Well now everybody is jumping into the loan modification game and it is dangerous.
And that is exactly it, it is every unemployed loan officer has gotten into the loan modification game and I guess I am guilty of the exact same thing. It is just after having 20 years experience of working with attorneys, I know what they are capable of doing, I know how they can go in and negotiate and the biggest thing is they are there to protect the home owner, to protect the consumer, to protect their client because they have a fiduciary responsibility to that client... 
First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com
Part 8 (Excerpt)
30 year fixed FHA mortgage is the best financing available for first time home buyers today.
So now the only question that I would have, Michael is you only lowered the guys interest rate by 1/8th of a percent, weren't there a whole lot of closing costs associated with that? Good question, in this particular case no. There were no closing costs.
Well then it definitely makes sense to lower your interest rate if it's not going to cost you anything and you can lower your monthly payment by 100 bucks a month you would be crazy not to do it.
His breakeven was one day, in that particular case.
It goes back to this Velocity of Money concept. If you're not sure if it makes sense or not, it's kind of a no-brainer, give the team at velocity financial a call. You will do the analysis for them to determine if it makes sense or not based, on their unique circumstance, and from there youll advise them on the appropriate type of loan.
You know it's funny that people over the years they get so hyper-focused on the interest rate of the loan. Interestingly enough I had a recent client whos focus was not on the interest rate, it was on the closing costs. The problem is there is a correlation between the cost of the money and rate, you have to pay it isn't free for anyone. No cost loans are not really no cost, youre paying a higher rate to get it, so where does it make the most sense for you and your family, how long are you going to use this mortgage? There are so many factors, there's an incredible amount of discovery that needs to be done.
If you walk into your local financial institution it doesn't necessarily have to be a bank and you ask what is the rate today? It's vanilla, it's not 31 flavors, its vanilla, this is what we have. Well we have a couple of other options, but that's not how it works at the bank.
One thing I wanted to point out Michael was it was back in 2003, we saw interest rates that were close to what they are now and a lot of people got into the same kind of loan that I got into at that, I got into a three year adjustable loan. And I'm really kicking myself because I wish I'd gotten into a 30 year fixed, and I would say with anyone, especially with as low as interest rates are, they definitely have to get into this market. jump in and get themselves into a 30 year fixed and just be happy with it forever.
That's a really good point, and it's safe. If you have a 3 year ARM or two year adjustable, or a 5 year adjustable and youre 1, 2, 3, 4 years into it, the 30 year is the safe way to go, more than likely the interest rate is going to be lower than what you have. In the case of the adjustable ARMs, adjustable-rate mortgages just dont make sense today. If you have a 30 year fixed, its the safe bet.
Dan if you and I are wrong and real estate values continue to tumble, you know what, you have a nice safe loan and you dont have to worry about it for a long time. On the other hand if you want to live there for 20 years, you dont have to mess with it. I think its the right thing to do for most people
Well I think that anyone who is out shopping for a home over this weekend, and what they're looking for is to not only ask the seller to pay as much of the closing costs as possible but first to get pre-qualified by calling you at velocity financial. They want to make sure that they get themselves a 30 year fixed, FHA is probably the best product out there right now because its such a low down payment, and if youre a first time home buyer and youre in the $60,000 a year range, you can go out there and buy up to that $250,000 house and have a place for your family to be in after the first of the year, and never have to you live in an apartment and have Christmas in an apartment again, you can have Christmas in your own home next year.
Absolutely, that is a really, really good point. We dont want to forget about the $7500 tax credit that goes along with having a home, if you havent owned real estate in the last three years.
The other thing that I want to mention before the show gets wrapped up today, there is interest rate risk here just like there is in the bond market. Interest rate risk is you the buyer looking at what you can use to increase the velocity of money, increase the efficiency in your existing mortgage, or move to a new mortgage because money is cheaper today than it's ever been... 
First Time Home Buyers use FHA Mortgage and Seller Paid Closing Costs to Buy Real Estate Now. Best Market Conditions for Foreclosures and Short Sales in Decades. Go To http://RealEstateMarketingThisWeek.com
Part 7 (Excerpt)
The old rules no longer apply and Suze Ormond should know that.
We have Dan Havey the author of Real Estates Future in the studio today.
Michael, I was just curious, back when I got into the industry many, many years ago there used to be a rule of thumb that if you were going to refinance you had to lower your interest rate by at least two percent and I know as time went along and products changed that really became unnecessary, but I am just curious in todays mortgage market its a lot different than we were dealing with even two years ago. Is that still true that there is a 2% rule? Whats going on now?
I happened to catch Suze Orman on television and she was talking about mortgages, the caller who called in to the program, the question became I believe similar to what Dan just asked, her comment was that basically if you're in 6% interest rate or above now is the time to re-fi. That is what she said, a blanket recommendation. I know a lot of people put a lot of credence into what she says, maybe you could speak to that, the lowest interest rates you've seen in your career, you have been doing this for a while.
I have, and they are. You know there was a lot of speak the last couple weeks about the Fed, the Fed funds rate by the way is the lowest it's ever been in history. As of this week the discount rate is to the point that banks are lending money to each other at nothing, the Fed funds rate for intrabank lending is at zero, the problem is the banks don't have any money.
To be serious about the refinancing, because its a serious topic, I think people are starting to see their mail boxes filled with lots of advertising crap about refinance. I believe that doing the refinance is no different from doing a loan modification or buying a house, you need to sit down with the human being that's local, that you can know is a legitimate source. You're going to give all this personal information about you, your family, your kids, your Social Security number, you want to make sure you have somebody there that you know whos legit.
In regard to the old rule of thumb 2%, nothing could be further from the truth, and I will expand, but to the point of Ms Ormond that if youre at 6% or higher, that is a blanket statement and blanket statements never work. We just did a refinance for a guy who was at 5 1/2%, and it makes sense. Every situation is different, as far as how much do I have to lower my interest rate to make it work? It depends on the type of mortgage that you get.
The only type of loan to get today in December of 2008 is a 30 year fixed. I know that one of the things that was really interesting to me, and that you and I have referred clients to one another for several years, so we share a number of clients, were familiar with those families and those households, and this is Wednesday, on Monday and Tuesday of this week I've had seven phone calls from clients who you've already done loans for, refinances for, asking if this is the time to refinance a loan that is only a couple years old.
And I know in several of those cases the answer is yes you're actually helping families right now with that process. I am and we do. To answer the question, you need to determine what the payback term is, in other words when your refinance is done it's a new loan, there's the title insurance, appraisals, lots of different things may need to be done, not in every case, but in most cases there are costs associated with that. The cost has to be offset by the amount of savings. Its a breakeven analysis
Absolutely it is, the shorter the breakeven the better the loan. I am working on a case right now which is going to be done in the next couple of days where the guy lowered his interest rate by an1/8 of a percent and it made sense for him. It's not for everybody, 2 percent or lower, 2% is significant, now you're talking about really significant savings in terms of cash flow... 
