The housing crisis and ensuing recession have created an unprecedented demand for assistance as homeowners across the economic spectrum struggle to maintain their mortgage payments.  Federal and State agencies have mobilized a massive effort to provide additional funding and resources in an attempt to backstop approved counseling agencies as they strain to accommodate requests for assistance.

These non-profit agencies provide free counseling for at risk homeowners.  You can find a list of HUD approved housing counselors here .    These counseling services typically include an opportunity to meet with a staff member who provides assistance in determining eligibility for loan workout programs, and helps the homeowner complete the lender specific forms needed to request assistance.  They may even make an initial contact with the homeowner’s servicer.  These free services are a valuable resource.  However, the inconvenient truth that these agencies won’t tell you is that they simply do not have the resources to see these loan workout requests through.  After your counseling session, you are generally on your own to navigate through the process. 

As I have previously opined the big banks would prefer this crisis just “went away” and are not taking steps to truly accommodate at risk homeowners.  In fact, it is our experience that the loss mitigation departments at most major serving companies have a propensity to lose faxes, change guidelines and generally (and possibly intentionally) delay, deny and derail a request for assistance!  If you have already attempted to get assistance, this assertion should come as no surprise.  The actual process of getting an optimized loan workout in place requires a sustained effort on behalf of the homeowner or their designated advocate.  While they are loathe to admit it, banks would prefer to work with uninformed, emotional homeowners directly, not because they are eager to help, but rather, because homeowners are naive and intimidated by the process and are easily manipulated.   

Professional representation can play an important role in getting the appropriate loan workout solution in place.  Unlike HUD approved counseling agencies, these for profit service providers do charge a fee.  Reputable firms should be able to provide specific examples of loan workout requests they have helped to facilitate and should have extensive experience in mortgage lending, consumer debt counseling or real estate law.  The best of these firms will exhibit superior knowledge and will offer full time representation of your interests.  The costs of these services varies and it is important for a homeowner seeking professional advocacy services to “do their homework” before choosing who to work with. 

Here in Michigan, firms must comply with the Credit Services Protection Act.  You can read the full text of the Act here .  A reputable firm will not charge for their services before the actual service is performed.  Furthermore, a reputable advocate will not discourage you from participating in the process, but rather work collaboratively with you to find the appropriate workout for your circumstances.  A true advocate should be a champion for your interests as a homeowner. 

Michigan Mortgage Modification LLC is Michigan’s premier advocate for homeowners.  You can access FREE resource including an extensive database of Frequently Asked Questions, video tutorials and excerpts of the acclaimed digital workbook “The DIY Loan Modification Kit” at www.michiganmortgagemodification.com.

Loan modifications can do a lot to help our housing market recover but it’s really not enough.  You see, loan modifications, at least the ones that actually improve someone’s situation, are typically best for those that are delinquent and can’t afford their existing mortgage payment.  Unfortunately, there aren’t a lot of good programs out there for people who are current and can afford their mortgage payment.

So, from the eyes of someone that can afford their mortgage payment, it appears that only those that financed more mortgage than they can afford are the ones that are getting the best outcome.  Sure, hearing that your neighbor was about to go into foreclosure and then he got a 2% interest rate, with no payment due for 2 months, makes you think this system is messed up.  On the surface this is true, but you really have to peel back the layers of the onion to understand why it’s important for everyone that these homeowners get help. 

I agree that each homeowner is responsible for the mortgage that they signed up for.  But, when you have so many mortgage products on the market, that allow almost anyone to purchase a home, along with the fact that the American Dream of homeownership is forced down the general publics throat, it’s hard not to want to own a home.  With that being said, let me digress on why these loan modifications help all homeowners.

Let’s say that we have two neighbors with similar homes and we’ll call them A and B.  Let’s say that neighbor A purchased a home on a fixed rate of 5% and their payment was $1,000 per month.  Now, let’s say that neighbor B purchased their home on a two year adjustable rate at 5.5% and their payment was $1,150 per month.  Neighbor B did the adjustable because it provided a more affordable payment and had every intention of refinancing before the rate adjusted.  Now, when Neighbor B went to refi, they were denied because  they owed more on their home than it was worth.  Neighbor A also owes more on their home than it’s worth but they have a fixed rate.

So now Neighbor B’s rate adjusted to 8.5% and their new payment is $1,550 per month.  They are paying $550 more per month than Neighbor A for the same home.  After a few months of struggling, Neighbor B just can’t make the payment anymore and is facing a foreclosure sale.  The bank sells the home at auction for $30,000 less than what both Neighbor A and Neighbor B owed on their mortgages.

Now, this sale of Neighbor B’s home at auction has further driven down the value of everybody’s home in the area because it will be used as a comparable property by an appraiser.  Neighbor B now has to move out and rent a home from Neighbor C for $1,150 per month because that’s what they can afford.  If the bank would have worked with Neighbor B to reduce the mortgage payment back to $1,150, this whole devaluation of property wouldn’t have happened.

It makes no sense to send a homeowner packing only to move down the street and pay rent for what they were originally paying on their mortgage.  This is why loan modifications help all homeowners.

I’ve been doing loan modifications for quite some time now.  During this time I’ve had several clients tell me that their mortgage company is going to help them complete the loan modification.  Every time I hear this, I cringe because I know what they are about to go through and I know what the end result is going to be.  90% of the time, they’re going to call me back for advice or help.

This is sad because the mortgage companies, and the general media, are telling these homeowners that they don’t need outside help.  They tell you to just call your mortgage company and they will help you qualify.  They don’t tell you that you need to be prepared for their help.  This is terrible because most of the questions that they are going to ask the homeowner over the phone to pre-qualify them for a loan modification, are not questions that should be answered on a whim.

Loan modifications are not a one size fits all solution.  In fact, in order to qualify for a loan modification, the homeowner must meet the guidelines.  The guidelines are very specific and have a lot of variables that can disqualify the loan modification.  These variables include your income, your living expenses, your debt ratio, your homes value, and several others. 

Your mortgage company has a specific set of questions that they will ask and then they enter the answers into a computer program.  The computer program will then decide if you qualify.  So, answering these questions properly is very important.  Again, your mortgage company representative is just entering data, and if you don’t qualify, they have no reason why.  They often will guess and give you incorrect information.  This process is ridiculous!

It makes no difference what your personal situation is, if you are going to attempt a loan modification on your own, it’s up to you to get prepared.  That means you may have to do some dreaded research on the programs that are available.  The information is out there but it’s not easy to find nor understand.  You can “Google” search for guidelines but if you don’t understand them they are basically worthless. 

I would suggest that any homeowner who is thinking about attempting this on their own grabs a copy of the FREE video series and the Do It Yourself Quick-Start Guide offered on the right side of this blog.  I think there is a lot of value with this FREE information and it could help you save thousands of dollars per year.

Click here to read the article in its entirety.

When I read an article like this It kind of makes my stomach turn.  Not because the information is incorrect, but because there is missing information.  I’ve never encouraged any of my clients to go delinquent on their mortgage to get help.  With that being said, sometimes it’s just not possible for them to stay current and I encourage them to send in what they can.

The main problem I have with this article is that some homeowners may read it and do no further research before they go delinquent.  Unfortunately, there is no guarantee for a loan modification and the homeowner could put themselves into a terrible position if they don’t get the help they are seeking.

When this happens they get desperate and start searching for an answer.  This is where they usually find a Loan Modification company that markets themselves as a company that can solve the homeowners problems. 

Most homeowners will go to Google and search for what they are looking for.  A high percentage of those homeowners will end up clicking on a paid for advertisement that promises to solve the problems they are facing.  Now, there are a lot of good companies out there helping homeowners but there are also a lot of predators that are taking homeowners money and doing very little for them.

This makes it hard to be a struggling homeowner because it’s hard to know where to go for good information on the subject.  It’s very important to do some research on any company that you may choose to do business with.  This means checking with the Better Business Bureau, google searching the name of the company to see what you may come up with, and also searching blogs an forums to find out if any other homeowners have had issues with that company.

It’s also very important to know if you qualify at all.  At Michigan Mortgage Modification we make sure that you qualify before we even suggest you attempt a modification.  We do this because the loan mod process is very long and grueling and it makes no sense to waste time on it if there isn’t a high chance at success.

If you decide that you are going to get professional help with your loan modification, make sure to call at least three different companies.  More than likely, you will end up speaking to a salesperson that only makes money if you send in a check.  So, be wary of someone promising you some pie in the sky results and keep the following in mind;

• Only 1% of all loan modifications get principal reduction and it is mostly on 2nd mortgages.  So if anyone tells you that you have a great chance at principal reduction and they don’t have a money back guarantee, run away.  Also, consider that a money back guarantee put together by lawyers isn’t always as safe as it sounds.  Another thing to keep in mind is that if you choose an out of state company, it’s kind of hard to hold them accountable.
• 2% interest rates are available but it comes down to mathematical equations based off of your gross income, your property taxes, your homeowners insurance, and any association fees that you may pay.  So, if any one says you qualify for 2% without gathering this information run away.
• Compare the results from the three different companies and choose the one that has given you the most detailed information and makes you feel good about your decision.
• Sign up for the free videos offered on my website www.MichiganMortgageModification.com and you will get a FREE,  no obligation, 30 minute telephone consultation in which you will learn if you qualify for any type of assistance.

Another important issue to point out is that your mortgage does not need to be a Fannie Mae or Freddie Mac loan to qualify for the governments program.  The government offers financial incentive to investors that offer the program so more and more of them are adopting the guidelines. 

Unfortunately, the only way to find this out is to contact your loan servicer, and, most of the time, the person you talk to there isn’t a reliable source of information.  They will also tell you that they are there to help and to beware of hiring a third party to help you with this because you can do it on your own.

While it is true, you can do this on your own, whose interest do you think the servicer has in mind?  If you think it’s yours, I’m sorry to pee in your Wheaties.  60% of our clients are homeowners that were either turned down by their servicer or they gave up because they were getting nowhere.

I hope this helps you make an informed decision on how to take advantage of the Government Program.

Recently, Michigan Mortgage Modification LLC, began running a series of radio spots on country station 106.7 The Fox in the Metro Detroit market. 

According to co-founder Trevor Sines, the idea behind the radio campaign was to raise awareness and “start a conversation” about the housing crisis in Michigan. 

“If you live in Michigan, it is no secret that your home has depreciated significantly over the past two years.  What has been most frustrating for homeowners has been the percieved lack of any cohesive plan to address this problem.  We believe mortgage modification is an effective tool and will become an increasingly important option as the full extent of the housing crisis is unveiled.”

Here is a sample of one of the spots currently being aired

Michigan Mortgage Modification Radio Ad

Trevor Sines

www.michiganmortgagemodification.com