WHAT I NOW KNOW ABOUT THE FORECLOSURE CRISIS AND LOAN MODIFICATIONS
Originally posted in April of 2009… why do so few people know this even today, in 2011?
Facts I’ve discovered after months of investigation into private loan modification companies, our government’s response to the foreclosure crisis, and banks.
No one is or would ever defend fraudulent loan modification companies. They are pond scum, and should unquestionably go to jail. Sending them to Guantanamo would be fine by me.
That being said, the legitimate loan modification companies are doing a MUCH better job helping homeowners keep their homes by negotiating with lenders in order to modify their payments so they become affordable for the homeowner. You heard that right… A MUCH BETTER JOB.
Their only “crime,” according to Treasury Secretary Tim Geithner and countless others, is that they charge for their services. Mr. Geithner, you are an ass. What you’re doing to help distressed homeowners, as of today, we could put in a thimble.
The government’s responsibility here is to regulate the loan modification industry to protect consumers. You know, punish the bad guys and leave the good guys to do their jobs, help homeowners who are in trouble, and earn a fair profit as a result. If that idea sounds familiar, it’s because that’s how EVERY single other business or industry is handled here in the U.S. of A.
The government, obviously, can’t seem to figure out how to regulate the loan modification industry, so they are abdicating their responsibility by making the blanket statement about loan modification companies: “If you have to pay, walk away.”
Paying isn’t the problem, people… it’s paying and not getting that’s a problem. Paying and getting… not so much.
Just this very morning, Geithner and Attorney General Holder held a press conference in Washington on how the government will NOW start cracking down on fraudulent loan modification companies. It was political grandstanding at its finest.
During the press conference, Geithner said:
“These predatory scams callously rob Americans of their savings and potentially their homes. We will shut down fraudulent companies more quickly than before. We will target companies that otherwise would have gone unnoticed under the radar.”
Well, thanks Tim. Should we applaud you for doing your job… finally?
Holder then added his two cents…
“If you discriminate against borrowers or prey on vulnerable homeowners with fraudulent mortgage schemes, we will find you, and we will punish you.”
(In case you’re wondering what discrimination has to do with anything we’re talking about here, Holder’s the black guy, and new federal laws dictate that African Americans in government must use the word discrimination in at least 72% of their statements.)
In the AP Business news story, written by Alan Zibel and Christopher Rugaber, that went out on the wire immediately following this morning’s press conference, it also says in reference to loan modification companies:
“While some are legitimate, authorities say many are con artists.”
Wow, “some,” and “many”? Gee whiz… you guys and your technical talk. Could you be more vague?
Their article also states:
“It’s difficult to gauge if even the legitimate consultants are more effective than nonprofit credit counselors who also work with lenders at no charge.”
Is it “difficult”? Why would that be, I wonder? If that’s “difficult” for our government to gauge, they must be having a dickens of a time fixing the country’s banking institutions. Credit default swaps and complex derivatives must be absolutely giving them fits.
Why don’t they just tell the truth? The reason it’s “difficult to gauge” the relative effectiveness of legitimate loan modification companies as related to the nonprofit credit counselors who offer to work at no charge, is… the non-profit ones haven’t done much if anything as yet. The only other reason it could be difficult to gauge is that absolutely no one in government has tried.
Well, I’ve spent the last several months investigating the private sector’s loan modification companies and I’ve come to very different conclusions than Mr. Geithner, Mr. Holder and those in the media. Of course, I’m not just sitting in an office postulating as to what might be happening out there. I’m driving around in my car with a film crew, interviewing actual homeowners and loan modification company executives, recording their stories and filming while they attempt to call the government help-lines and the banks themselves.
Before I get into the specific results of my investigation, I would think that common sense would dictate that legitimate private loan modification companies would do a much better job of helping troubled homeowners for at least two reasons:
A. They are, for the most part, the only people actually helping consumers get their loans modified. That’s right, there is no government program in place as of today.
B. They are mortgage experts being paid to represent a homeowner’s interests. That’s right, in general people paid to do a job do it better than government workers or volunteers. Go figure.
Here are FIVE FACTS about private loan modification companies and why we need them to survive this government onslaught and media hyped witch-hunt.
1. They are paid to represent the best interests of the homeowner - And no one else is.
To give you a tangible example of why this is important, IndyMac Federal has just announced a new streamlined loan modification program available to homeowners, and they are now refusing to work with private loan modification companies as a result. Here’s what it says, word-for-word, in the first few paragraphs of IndyMac’s Website that describes their new streamlined program available to consumers:
“The goal of this streamlined loan modification program is to achieve improved value for IndyMac Federal. IndyMac Federal will only make modification offers to borrowers where doing so will achieve an improved value for IndyMac Federal.”
Now, I’m not complaining about the language. In fact, that’s probably what it should say. They’re being, in my mind, uncharacteristically forthcoming about what’s going on. They, IndyMac Federal, will be happy to negotiate with consumers directly in a streamlined manner, and consumers are to be on notice that they, IndyMac, will be negotiating in the bank’s best interests… with absolutely no regard for the homeowner’s best interests.
Fair enough, but understanding that’s the situation, I’d prefer to have a knowledgeable expert watching out for my best interests, thank you very much. And I don’t mind one bit having to pay that expert for their time and expertise. Of course, that’s just me. Other people might choose to take a shot with a government help-line. It’s entirely up to them.
Unless, of course, the government succeeds in putting all of the private loan modification companies out of business as a result of their misinformation campaign disguised as protecting the consumer from fraud. If they succeed, I suppose I’ll have to call the government help-line, or face the paid experts at IndyMac Federal on my own. And won’t I be happy about that… just wait until Timmy gets my holiday card next year.
2. As of today, there is no government program available - This shouldn’t be something I have to write much about, and it’s certainly not something about which you have to take my word, or anybody else’s for that matter. How do I know that there’s no government program in place as of today? Because I called the government help-line myself and I also went in to speak with the nice folks at Well Fargo Bank. It takes some time, a couple of hours sitting on hold to be specific, but I encourage others to do the same.
On February 19, 2009, ABC News, in an interview with FDIC Chair Sheila Bair, reported that:
“The initial effects of President Obama’s massive housing rescue plan will be felt as early as next month, one of the administration’s top economic advisors predicted today.”
What’s today? March 19th? No, it’s April 6, 2009. And there is no program in place. Period. Wells Fargo reports that they haven’t even received the contracts from the Treasury Department as of today. I’m sure once they get those contracts, they’ll just sign them without reading them and send them right back to Timmy at Treasury. Because that’s always how things work when there are contracts, banks, and the Treasury Department involved, right?
After the contracting between the nation’s banks and Treasury is completed, then according to FDIC Chair Sheila Bair, speaking on Good Morning America, “it will take some time to screen candidates, verify their incomes, and provide financial counseling to some applicants.”
I’m quite certain that it will, as Ms. Bair said, take some time. I sure hope my bank will wait before foreclosing on my home. I’m sure they will. After all, they were so nice when I took out my mortgage.
3. The President’s housing rescue plan doesn’t help everyone who needs help - By Sheila Bair’s own admission, and President Obama’s too I might add, the Affordability and Stability Program will not help millions of homeowners at risk of losing their homes to foreclosure. According to Ms. Bair, again as quoted from her February 19, 2009 interview with ABC News:
“Bair also said that the (program’s) huge expenditure won’t halt an avalanche of foreclosures, conceding that there are millions of homeowners that are now so far ‘underwater’ – their homes now worth less than their mortgages – that they will inevitably lose their homes.”
Inevitably? Did Ms. Bair just say inevitably? Now there’s optimism for you. I guess she’s counting on the government putting the legitimate loan modification companies out of business PDQ… pretty darn quick, as my mother used to say.
Okay… you heard her folks. According to FDIC Chair Sheila Bair, if you’re in trouble with your underwater mortgage, it’s inevitable that you’re going to lose your home to foreclosure. Better start packing. No reason to try a legitimate loan modification company who might be able to help. It’s inevitable, according to Ms. Bair, and she must know. She’s chairperson of the FDIC, after all. If she doesn’t know, who would? I mean, the FDIC saw this whole thing coming a mile away, and that’s why they stepped in to stop our entire economy from going down the drain, right? Whew… we sure dodged a bullet there… thanks Sheila!
Sheila Bair also told ABC News that Obama’s plan will “at least help 3 million to 4 million of those borrowers in distress”. Bruce Marks, CEO of the Neighborhood Assistance Corporation of America, however, dismisses Bair’s claims. Marks told ABCnews.com:
“She is absolutely wrong. It will have minimal impact. They have pulled from the sky the 4-5 million mortgages that will be affected. It’s just hype.”
4. The President’s Affordability & Stability Program only modifies loans for five years - That’s right. President Obama’s plan, assuming you qualify for a modification, only modifies your adjustable rate loan into another adjustable rate loan, one that adjusts to the prevailing rates five years from now. If rates are high five years from now, well… I guess we’ll just see what happens then.
The fact is that legitimate private loan modification firms are achieving significantly better results for homeowners. Routinely, these private sector firms get modifications that change adjustable rate loans into 30-year fixed rate mortgages. It’s not uncommon to see reductions in the principal amount owed by the homeowner.
In one specific case I witnessed recently, the loan modification firm got the bank to agree to reduce a $4,000 a month payment on adjusting loan, to $800 a month for three years, and after that, the payment tops out at $1900 a month. I would have to believe that the President’s plan, or a consumer calling their bank directly is highly unlikely to achieve that result.
5. What President Obama said about private loan modification companies IS WRONG - President Obama has said “if you have to pay, walk away” from loan modification companies. He was wrong to say that, and what he said is harming troubled homeowners in an attempt to protect others from scams. He needs to know what he’s done. His words will cause some homeowners to lose their homes unnecessarily. And I do not believe that was his intent.
I have personally visited with several loan modification companies over the last month. I have interviewed their CEOs, visited with their customers, attended audits being conducted by government regulatory agencies, and spoken with bankers, none of whom would agree to be mentioned by name. All of the companies I’ve interviewed and visited are unquestionably helping troubled homeowners and none could be considered in any way “scams”. In fact, in my view, they are all critical components in any solution to the foreclosure crisis.
One such company, Green Credit Law Center, was one of the early entrants into the loan modification business, modified more than 300 mortgages for troubled homeowners in March 2009, and they expect to modify 600 mortgages on behalf of consumers in April. And that’s a fact. Of course, they did charge a fee for their work, but since all of their customers that I spoke with personally didn’t mind paying that fee in the least, I might add, I’m thinking it should be okay.
The government needs to regulate the loan modification industry in order to protect consumers from fraudulent operators, not wipe out the good with the bad. It occurs to me that there have been quite a few fraudulent investment scams out there over the years… but I don’t remember my president ever telling me not to pay Charles Schwab or Merrill Lynch their fees.
With the camera running, I asked a loan modification expert at a law firm to contact a bank to check on a loan modification. He called one, and I won’t say which one, today anyway. The woman at the bank told him that he would have to get the borrower on the phone before she could talk about the loan modification in progress. He did. When all three were finally on the call, the first thing the woman from the bank said was: “You know… you don’t have to pay him. You can just call us directly.”
I have to say that I have rarely been so shocked at anything in my life. And this woman was not a senior level bank executive, she was someone answering questions about loan modifications in progress. That means that what she said was the result of an institutionalized training program, she didn’t come up with that line herself. She was told to say it.
“You don’t have to pay him”? How dare you say such a thing? You’re just saying that because you’d rather have a less experienced person with which to negotiate. You are not the person that should be giving advice to that borrower.
The banks should be on notice… I’m calling you… every day… more than once… and I’m filming it, and recording it. I’m coming after you with everything I’ve got.
In conclusion…
President Obama was obviously told that consumers don’t need to use a private loan modification company. He said that homeowners could either call a government program or if they didn’t qualify for that program, they could contact their bank directly. Both statements, while true, are also wholly beside the point.
Who would tell the President something like that? The banks, that’s who… who else?
After spending months investigating the loan modification industry, I’ve come to understand that the banks do not want private loan modification companies helping consumers obtain loan modifications. Why? Because they’d much prefer to deal with homeowners who are not experts in mortgage terms, are distressed as a result of being at risk of losing their homes, and as a result are much easier to take advantage of, simple as that.
Is that an indictment of the entire banking industry? Yes, let me be very clear… IT IS.
Banks are debt collectors. That’s what they do. When a homeowner in distress calls a bank directly to ask about modifying the terms of their mortgage, they are asking the bank to write off some of the money the consumer rightfully owes that bank. Does anyone imagine that the banks will be terribly helpful in that situation? If you do, then you’ve never been late on your car payment or mortgage payment… because in those situations the bank is not your friend. Never have been, and never will be. They want their money, and as much of it as soon as possible is their clear goal.
It has become obvious that both state and federal agencies have no idea what they’re doing when it comes to solving the foreclosure crisis. I’m not blaming them for not knowing, this crisis has emerged, deepened, and changed quickly. But to put legitimate loan modification companies out of business, something they are very close to accomplishing, will only make things worse for millions of Americans.
Consider this… President Obama says having to pay makes a loan modification company a scam. Illinois Attorney General Lisa Madigan to told reporters at today’s press conference in Washington to “Stay away from anyone who says they will save your home in return for money up front.”
And at the same time, California’s Department of Real Estate (“DRE”) has published an “Advance Fee Agreement,” and tells consumers to make sure that the company they hire to help them with their loan modification use that agreement, which was approved by the DRE. Unless the company is a law firm, in which case it’s okay to pay a fee in advance and the advance fee agreement doesn’t apply.
Well, that all seems pretty clear, doesn’t it? The President says don’t pay. The State of California says pay, but only if a certain form is used… unless it’s a lawyer… or a Tuesday… and your license plate ends in an odd number… Oh my God.
Homeowners need to watch out for these things, as far as I’m concerned:
Scams - Check out the loan modification company before you pay them a nickel. Ask for references, check the Internet for complaints, ask for references, visit their offices. And if you don’t feel good about the firm, don’t hire them. Look around, there are others out there… today, anyway.
The President, along with state and federal agencies - Our government has failed us at every turn in this crisis. They clearly don’t know what they’re talking about when it comes to saving people from losing their homes, as evidenced by the fact that millions of Americans have already lost their homes to foreclosure and all forecasts point to millions more losing their homes over the next two years. Save yourself. Your government doesn’t even understand the problem. Your government hasn’t even gone to the trouble of talking with anyone who’s actually modified a mortgage.
The administration has recently been funding numerous non-profits to assist troubled homeowners. ACORN, for example, just received $5.2 million from the Neighborhood Stabilization funds to provide some sort of foreclosure counseling. The President’s plan also offers to pay banks $4500 over five years for the loans they agree to modify, assuming borrowers make their payments, of course. I hope it works.
However, I think it’s worth mentioning that when President Obama says that a loan modification shouldn’t cost you anything, he means “you,” not “us”. When a homeowner pays a legitimate loan modification company three grand to get their mortgage modified, it costs us quite a bit less… nothing, not to put too fine a point on it. And the bank that modifies the loan does so because they decided to do so. Not because the government is paying them to help fix the problem they helped to create.
And I know it works, because I’ve seen it with my own two eyes… hundreds of times now.
The Banks - Your bank is out for itself. They are not being honest when they tell the President that consumers can simply call them directly. It would be like the police telling you that you don’t need a lawyer. Whatever your bank tells you… check it out for yourself. Do not believe them at face value. The banks have proven themselves to be less than honest, and capable of anything. Beware the banker that says “trust me, we’re a bank.”
I received an email from newyorkforeclosurelaw.com this afternoon. It read:
If there is any lesson to be learned out there in the new wild west of loan modifications, it’s that homeowners should hire an experienced lawyer.
I just interviewed someone who was a vice president level executive at several of the banks that we’ve all heard about. He was let go from his last vice presidency because he asked too many questions about what was going on. I believe what he’s told me. And none of it is good. I asked him about the ratings agencies that slapped triple A ratings on the mortgage backed securities and he said that everyone knew that the models weren’t taking the right risks into account. But no one raised the issue too loudly. No one stopped what was happening. And bonuses went higher and higher.
He was at one of those banks when the FDIC started forcing them to modify mortgages. He said it was an incredible mess, that there were no standards. No one knew what they were doing. Nothing was consistent. He said that a friend who’s still at that bank says that things are going better today. That the bank has put a lot of effort and resources into their loan modification department. He agreed with what I said in this article about the banks being out for themselves and not for the homeowner. Frankly, his statements came as no surprise to me.
Then he said something I won’t soon forget:
“If they had put this much effort into loan modifications in the first place, we wouldn’t have had this problem to begin with.”
And I hung up the phone and started to cry.
Mandelman out.
Mandelman,
Another excellent post... I have been following your articles on the subject of Loan Mods and am blown away at this new revelation! It does make perfect sense, though. Who the hell else would lobby to stop the Loan Mod process but the banks.
Crazy S@!#%t... I can't wait to see Mandelman unleash his fury on THESE guys.
Mandleman, Wow! Great articles! How can we see your video work of interviewing real mod companies and your bank mod tries? Please let me know where I can view your work. Please keep up the fight for all of us at legitimate loan mod companies.
Just wanted to respond on that question and let you know that I am one of the people he has interviewed and my understanding is that it should be ready in a few weeks.
Paul
As Loan Mod people we must to be united and fight for what we earn, this job that we do is essential for our economy because it creates income for unemployed and help homeowners, and is a h**l of a job!!!
Banks do not cooperate at all!!! Hey to everyone let's show the government it's the banks not us!!!
I cannot believe that this is happening because of few people" scammers", if they are. Maybe they are doing their job but the banks are blocking them?? We all do our job to help our families we create a service to the society and we know that if our service is not good people won't recommend us anymore so we do it right but the banks deceive people and lie.
We are entrepreneurs earning money not from taxpayers or taxes we are not lazy government making their big income on our expenses people wake up we don't need this kind of leaders!!!
Well, let's see... Although I am still in the middle of producing the documentary, I did put together an interim video for use by a specific loan modification company. It's really a promotional piece for a company called Green Credit, and I put it together to help them with consumers in light of the recent campaign against loan modification companies that has measurably harmed their business. You can see it on their Website at http://www.getgreencredit.com. Then click on "Blog" and you should get a video screen... click play and you'll see a 9 minute video that will give you an idea of the story I'm ultimately trying to tell. I'll be sure to let everyone know when the actual documentary program will be ready for prime time.
[quote="negotiatemyloanmod"]Just wanted to respond on that question and let you know that I am one of the people he has interviewed and my understanding is that it should be ready in a few weeks.
That's true. I am also always looking for homeowners that have had their homes saved by a modification handled by a for profit company and loan modification executives willing to be interviewed either on camera or for an upcoming article.
Banks do not cooperate at all!!! Hey to everyone let's show the government it's the banks not us!!!
I cannot believe that this is happening because of few people" scammers", if they are. Maybe they are doing their job but the banks are blocking them?? We all do our job to help our families we create a service to the society and we know that if our service is not good people won't recommend us anymore so we do it right but the banks deceive people and lie.
We are entrepreneurs earning money not from taxpayers or taxes we are not lazy government making their big income on our expenses people wake up we don't need this kind of leaders!!!
Well, as you are no doubt aware, you are singing my tune, and should probably reach out to me so I can count you among the legitimate loan modifiers, without whom others may have lost their homes. I'm =writing the cover story for The Niche Report next month and if I can interview and quote you for that article that would be great.
"Legitimate" for-profit loan modification companies do not exist anymore than the tooth fairy!
Mr. M - I don't know where you came from or where your path will lead. I am exceedingly happy that you are a contributor on this site. Thank you for giving us hard working, ethical and honest Loss Mitigation Consultants a voice. - Mr. C
(Screw predatory Loss Mitigation pond scum. Choke on the money you have burned away from your client/victims)
As part of our client satisfaction we record calls from lenders borrowers and us and we can demonstrate that Banks are to blame for they lie and deceive people including us but the only way that our clients believe on us is when they listen this recordings and understand that when bank called and ask them to leave our service THEY ARE THE ONES THE Fraudulent Banks are The MAFIA very organized if you do not believe i can give you the internet access to our recorded calls and listen for yourself on any case i evn have one of EMC bank saying that the Bank do not have more money to help on modifications because the investor run out of it and the house should forclose anyhow.!!!My email is Mycasahome@yahoo.com for further information.
I work for a loan mod company that has been completeing modifications for over a year now. We are constantly monitoring the laws to make sure we stay in compliance. Two months ago we merged with a law firm so that we can continue to service more people in more states. Seems thats what the fed thinks will fix this, get attorneys involved. I will be forwarding your article to all my agents nationwide as a source of information to present to their potential clients so they may have another tool to seperate themselves from the scammers.
Thank you again and keep up the great work and the fight!!
SteveP...You have convinced me. All loan mod companies are frauds.
Oh, by the way...Albany, NY (AHN) - Over 90 New York lawyers were discovered by State Attorney General Andrew Cuomo to be recipients of potentially fraudulent state pensions on the basis of being certified by school districts as employees and not as outside contractors.
In a news conference in Albany, Cuomo said he was considering filing criminal or civil cases against the lawyers over what he considers a payroll padding scheme. "It is egregious conduct and there is no excuse for the fact that it went on as long as it did," Newsday quoted Cuomo.
The attorney general, who initiated the probe in February, added, "And if I were a taxpayer, I would be offended. I am a taxpayer, by the way. I am offended."
The investigation started at Long Island, but expanded to cover other counties. Of the more than 90 lawyers in question, 20 are from Long Island. Six of the 20 Long Island attorneys have already passed away.
While Cuomo did not give out the names of the 90 at the press conference, he singled out one for having collected over $700,000 in pension because he was on the list of seven school districts as an employee. Newsday identified the lawyer as John Hogan of Binghamton.
While some of the Long Island lawyers told a Newsday reporter they did nothing wrong, Cuomo disagreed. "We're talking about lawyers well versed in employment statutes who know that 'business as usual' is no excuse for breaking the law... In many instances, these were not simple misunderstandings but repeated acts of fraud," Newsday quoted Cuomo.
Aside from the possible lawsuit Cuomo plans to file, New York State Comptroller Thomas DiNapoli had started proceedings to recover the pension money paid to the lawyers involved.
So, this must mean that all lawyers (who also charge upfront fees) are also frauds.
Oh...wait, here's something:
By Lawrence Walsh, Pittsburgh Post-Gazette
A Charleroi home improvement contractor and 16 others throughout the state have been sued as part of a crackdown on "fraudulent contractors."
"The contractors named in [the] lawsuits are con artists who have disguised themselves as legitimate contractors in order to victimize unsuspecting homeowners," Attorney General Tom Corbett said in a statement.
Mr. Corbett said contractors such as James A. Berinti, of J. Anthony Roofing, one of the contractors who has been sued, "prey on unsuspecting homeowners, who believe that the work will be done in a professional and timely manner."
In each of the lawsuits filed yesterday, Mr. Corbett said fraudulent contractors took consumers' money for home improvements and either failed to perform any work, failed to complete the job or did the job in a shoddy and unprofessional manner.
He said Mr. Berinti contracted with consumers to perform a variety of roofing and home improvement services but failed to start those projects or left the work incomplete.
Mr. Corbett said Mr. Berinti took a $3,100 deposit from a consumer for reconstruction of a porch roof and repairs to the gutters, but never did the work.
So, this must mean that all contractors are frauds, too! Gee, glad we straightened THAT our...
No, no, wait...here's another NEWS FLASH: SteveP is an idiot.
Keep on truckin', Mandelman.
The greedy scammer type may not agree, but honorable people with strong morals and integrity would consider being an idiot far superior to being a predatory sleaze-bag who makes their living bilking exorbitant fees out of their fellow man who are already down on their luck, for a purported service that is not even required by lenders in the first place, but if otherwise desired by the borrower, is actually available for free.
I doubt even the so called "legitimate" loan modification companies clearly disclose to their victims, I mean their "clients" in advance of any fees being collected, that third party loan modification assistance is not required by the lender but if otherwise desired by the borrower, modification assistance is available for free through other agencies.
To set the record straight, any loan mod company that tells a borrower they will only be able to secure a modification by using a fee-charging service is NOT "legitimate."
Furthermore, any loan modification company that tells a borrower to stop making their mortgage payments is NOT "legitimate." After all, if they were so good at securing modification, they wouldn't need the borrower's help in securing the modification.
Similarly, any Loan Modification Company that tells it's so called clients to stop communicating with their actual lender is absolutely NOT "legitimate."
Moreover, any loan modification company that encourages an already in default borrower to use their last remaining funds to hire their firm is NOT "legitimate."
Similarly, any loan modification company that tells borrowers during the initial consultation that they have "inside connections" that enables them to secure quicker or more favorable modification terms are NOT "legitimate."
Any loan modification company that advises a borrower that they have Loan Modification "experts" on staff is NOT "legitimate" as this scam, I mean, this industry has not been around long enough for anyone to have enough years specifically doing loan modifications to claim being an "expert."
Any loan modification company that does not otherwise service mortgages that tells it's prospects that they have an in-house loan modification program is NOT "legitimate."
Any loan modification company that tells its prospects it offers or participates in any government sponsored modification programs is NOT "legitimate." For that matter, any loan modification company that tells its prospects that they modify loans is NOT legitimate as only the note holder, its servicer or their designee are actually able to modify any loan.
Finally, any loan modification company whose fees are based on loan amount being modified is NOT "legitimate."
Hey... if anyone wants to help me with getting some factual, unbiased media coverage of legitimate private loan modification companies, send an email to:
johnandken@kfi640.com
Mention me, Mandelman... tell them that you read my columns... tell them I'm at least occasionally funny... tell them to bring me on their show!
Thanks!
Banks do not cooperate at all!!! Hey to everyone let's show the government it's the banks not us!!!
I cannot believe that this is happening because of few people" scammers", if they are. Maybe they are doing their job but the banks are blocking them?? We all do our job to help our families we create a service to the society and we know that if our service is not good people won't recommend us anymore so we do it right but the banks deceive people and lie.
It is incredible, no question about it. If anyone wants to help me with getting some factual, unbiased media coverage of legitimate loan modification companies, send an email to:
johnandken@kfi640.com
Mention me, Mandelman... tell them that you read my columns... tell them I'm at least occasionally funny... tell them to bring me on their show! Thanks!
We are entrepreneurs earning money not from taxpayers or taxes we are not lazy government making their big income on our expenses people wake up we don't need this kind of leaders!!!
Well, that's just silly. Why would you think that? Or am I reading your wrong and you're still putting your teeth under your pillow at night?
(Screw predatory Loss Mitigation pond scum. Choke on the money you have burned away from your client/victims)
I could not agree more. TO THE SCAMMERS: If you're preying on distressed homeowners and defrauding them of the little money you have, then you are a special kind of vermin and I hope they keep Gitmo open just for you. Personally, I'd be okay with setting aside the whole cruel and unusual punishment thing, in your case. Betcha' if we chop your hands off on a pay-per-view channel that would be a pretty good deterrent. And I for one would go pay-per-view...
I just sent you an email asking you to get in touch with me as soon as possible... thanks...
Thank you again and keep up the great work and the fight!!
That's pretty funny stuff... no, just kidding. Whatever they think is fine with me as long as they don't put the industry out of business. If they think having law firms involved will stop the scammers, well alrighty then. Of course, California's DRE is still telling people to use a real estate licensed person that's using their approved Advance Fee Agreement. Obviously, that Advance Fee Agreement would has magical powers... it alone can stop the scammers... apparently. Go figure.
More importantly, could you please get in touch with me asap. I need to speak with you as soon as possible... you can email me at: mandelman@mac.com... or there's probably some way to contact me through ML-Implode, I just don't know what it is.
I doubt even the so called "legitimate" loan modification companies clearly disclose to their victims, I mean their "clients" in advance of any fees being collected, that third party loan modification assistance is not required by the lender but if otherwise desired by the borrower, modification assistance is available for free through other agencies.
To set the record straight, any loan mod company that tells a borrower they will only be able to secure a modification by using a fee-charging service is NOT "legitimate."
Furthermore, any loan modification company that tells a borrower to stop making their mortgage payments is NOT "legitimate." After all, if they were so good at securing modification, they wouldn't need the borrower's help in securing the modification.
Similarly, any Loan Modification Company that tells it's so called clients to stop communicating with their actual lender is absolutely NOT "legitimate."
Moreover, any loan modification company that encourages an already in default borrower to use their last remaining funds to hire their firm is NOT "legitimate."
Similarly, any loan modification company that tells borrowers during the initial consultation that they have "inside connections" that enables them to secure quicker or more favorable modification terms are NOT "legitimate."
Any loan modification company that advises a borrower that they have Loan Modification "experts" on staff is NOT "legitimate" as this scam, I mean, this industry has not been around long enough for anyone to have enough years specifically doing loan modifications to claim being an "expert."
Any loan modification company that does not otherwise service mortgages that tells it's prospects that they have an in-house loan modification program is NOT "legitimate."
Any loan modification company that tells its prospects it offers or participates in any government sponsored modification programs is NOT "legitimate." For that matter, any loan modification company that tells its prospects that they modify loans is NOT legitimate as only the note holder, its servicer or their designee are actually able to modify any loan.
Finally, any loan modification company whose fees are based on loan amount being modified is NOT "legitimate."
Steve... Some of the points you are making are absolutely correct, but many are simply not. And you talking as if you know something about this, when you clearly do not, is every bit as damaging to troubled homeowners as the scammers. Because of advice lie yours, people will lose their homes... have you considered that?
First of all, have you read any of my articles? Here's an example of you being a little nutty:
That's not an accurate statement. To begin with, I've interviewed several loan modification firms that have been engaged in modifying loans for well over a year... one in Denver has been doing it for 10 years. That would seem to be long enough.
Also, people who have spent their careers in the mortgage industry and have now spent a year working with lenders to modify loans in the current crisis are certainly much more expert than I, as a homeowner am. And were I in need of a loan modification, I'd want such an expert on my side of the table. The bank is clearly an expert in the area, and I'd like an expert looking out for me in such a negotiation.
Here's another example:
Steve... If a homeowner is using his or her "last remaining funds," it would seem that they would not be eligible for a loan modification. Loan modifications are not for people that can't make a house payment. If the homeowner can't make a mortgage payment, they will likely lose their home to foreclosure, or at least be forced to sell it under some arrangement.
Loan modifications are for people who can make a mortgage payment... just not their current payment because of some hardship situation. So, if a homeowner has no money, there's no reason to worry about a loan modification and any legitimate loan mod company will find that out in the first few minutes and advise that homeowner appropriately.
I could go on, but I thought I'd ask a question before I do. Have you ever actually had a loan modified or tried to modify a loan. Or are you just reading from some brochure?
Thank you again and keep up the great work and the fight!!
Thank you for your support and your kind words... I have several articles you might want to use with your agents... one in particular is titled: Why Banks Are Better at Making Loans Than Modifying Them. Hope you find it valuable as well...
I was working for one of the two GSE's after the Jan '94 Northridge earthquake. The Northridge quake adversely impacted thousands of Southern California homes & homeowners. I assisted our servicing team in Dallas with at least a 100 temporary forbearance agreements, temporary indulgence requests, recapitalized interest approvals even with pending SBA loans in process. I also provided shortsale valuation approvals. I even recall approving several 100% principal charge offs for mortgages secured by condominium units located in destroyed and insolvent condominium projects where HOA's elected not to rebuild. Most these condo projects were located in Sherman Oaks & Encino and with most of these unit owners already so far underwater in the depressed '94 real estate market, the HOA's actually elected to NOT rebuild leaving us only with a partial interest in the project's lot and prorated share of the insurance proceeds. Other than the condo projects that were electing to cease and decist, which were represented by their management companies' legal counsel, none of the 100+ workouts I was involved with had any third party, fee-charging "negotiators" involved. We delt with the servicers and the borrowers directly, and other than the ones where we forced repurchase back to the servicer for loan origination fraud, they all were successfully modified. And from what I can remember from 15 years ago, less than 10 of the ones I was involved with returned to my desk as a re-defualt.
Steve... Fair enough, but there are something like five million homeowners at risk of foreclosure, and some estimates put that number closer to ten million. That's quite the difference as compared with the population affected by the Northridge earthquake. Plus, people today aren't JUST at risk of foreclosure, they are beyond stressed out for a myriad of reasons. Beyond stressed out.
I have to tell you that I am NOT in the mortgage business, I don't sell real estate, in fact I don't know very much at all about the mortgage business. Ask anyone here at ML-Implode... they'll verify that I'm sure. But I've taken the time to visit with as many as a dozen loan modification firms. I've sat and listened to the callers and the counselors, and I'm telling you they are not all scams... far from it.
I have also called the government help-line, not once... not twice... not three times... but perhaps a dozen times and it is anything but efficient. I have also contacted three banks in an attempt to get information about a loan modification... and I promise you it's absurd to think that every homeowner is going to feel comfortable negotiating with their lenders once their behind on their mortgage payments.
I'm not kidding and I don't have a dog in this race. If you'd like, I'd be happy to find what I consider a legitimate company near you, assuming you're still in So Cal, and we could visit it together, just you and me...
Seriously... you sound like a smart guy whose heart's in the right place... we could merge our experiences and both probably come out ahead. What do you think?
unfortunately mandel, steve hit the nail on the head.
the service is to prepare the DTI info and income / asset docs for the servicer, prevent the homeowner from disclosing conflicting info, and make the calls to the servicer - being persistent.
this is something homeowners can learn to do with a $100 kit on their own.
a fair compromise would be to disclose that VERBATIM to a homeowner deciding to use a 'mod company'.
on the pro side, the processors (the file handlers who actually do the work, in my experience ''lawyers'' eat lunch) have a of database of regular contacts at the assorted servicers, and you hope enjoy rapport.
Even so results are hit and miss there is no set schedule of outcomes; I have seen mixed results for similar scenarios at same servicer. It is truly odd.
What you pay for is the weight a given processor may or may not have, and experience dealing with your servicer packaging mods for them- in addition to the company's overhead.
Now that is a fair statement.
If the processors themselves were entrepreneurial the fees could be lower... or if the govt would subsidize a select few industry leaders (wink wink) in order to reduce out of pocket for homeowners, along with the above initial disclosure, we'd have a game.
also its fair to tell people there is no way in hell to know what is going to be offered ahead of time, just what your goal is and how you will work hard to shape it to that goal but just to be fair, prepare for anything.
Furthermore, any loan modification company that tells a borrower to stop making their mortgage payments is NOT "legitimate." After all, if they were so good at securing modification, they wouldn't need the borrower's help in securing the modification.
I have been reading this thread since it began and I swore I was not going to post but this morning in re-reading from the beginning I simply had to comment to this.
You do understand that the LENDERS themselves are, at times, telling people not to make payments. Let me get really close to quoting here
" Ms. So and So I am sorry we are unable to help you with a modification because you are current. The fact that you are current shows us that you are able to make the payments that you have. If it gets to the point where you get behind on your payments you can contact us then". We will be able to help you more at that time
Let's not kid ourselves. The lenders have not played fair in this either.
the service is to prepare the DTI info and income / asset docs for the servicer, prevent the homeowner from disclosing conflicting info, and make the calls to the servicer - being persistent.
this is something homeowners can learn to do with a $100 kit on their own.
a fair compromise would be to disclose that VERBATIM to a homeowner deciding to use a 'mod company'.
on the pro side, the processors (the file handlers who actually do the work, in my experience ''lawyers'' eat lunch) have a of database of regular contacts at the assorted servicers, and you hope enjoy rapport.
Even so results are hit and miss there is no set schedule of outcomes; I have seen mixed results for similar scenarios at same servicer. It is truly odd.
What you pay for is the weight a given processor may or may not have, and experience dealing with your servicer packaging mods for them- in addition to the company's overhead.
Now that is a fair statement.
If the processors themselves were entrepreneurial the fees could be lower... or if the govt would subsidize a select few industry leaders (wink wink) in order to reduce out of pocket for homeowners, along with the above initial disclosure, we'd have a game.
also its fair to tell people there is no way in h**l to know what is going to be offered ahead of time, just what your goal is and how you will work hard to shape it to that goal but just to be fair, prepare for anything.
AngryVoodoo...
I'm not entirely sure of what you're saying, but I'm okay with whatever disclosures you would feel the consumer should receive in advance of retaining a private loan modification/loss mitigation firm. Anything at all.
If you want them to sign a form that says:
YOU DO NOT NEED TO DO THIS. YOU ARE FREE TO NEGOTIATE WITH YOUR BANK ON YOUR OWN. YOU ARE FREE TO CALL THE GOVERNMENT HELP-LINE. THERE ARE NO GUARANTEES THAT ANYONE CAN DO ANYTHING. THE OPTION YOU ARE ABOUT TO SELECT COSTS MONEY AND THE OTHERS DON'T. THIS COMPANY MAY NOT BE ABLE TO HELP YOU IN ANY WAY.
Would that be okay? Better? There is no question in my mind about two things:
1. Consumers negotiating directly with banks on a loan modification is a bad idea that has been proven ineffective. They have the right to do it, but I personally would not.
2. The Hope-4-Homeowners government program has been an abject and embarrassing failure. Obama's plan promises to be only slightly better at best. Government programs are not the answer to the crisis, even at their best they will be inadequate.
That leaves the private sector. Although I haven't finalized my study, I can tell you that I expect to report that private loan modification firms are successfully modifying something in the $3-4 billion in mortgages each month range. The number is certainly in the billions, no question about that.
Regulate and support the private sector loan modification solution. And let's start putting this crisis behind us.
Furthermore, any loan modification company that tells a borrower to stop making their mortgage payments is NOT "legitimate." After all, if they were so good at securing modification, they wouldn't need the borrower's help in securing the modification.
I have been reading this thread since it began and I swore I was not going to post but this morning in re-reading from the beginning I simply had to comment to this.
You do understand that the LENDERS themselves are, at times, telling people not to make payments. Let me get really close to quoting here
" Ms. So and So I am sorry we are unable to help you with a modification because you are current. The fact that you are current shows us that you are able to make the payments that you have. If it gets to the point where you get behind on your payments you can contact us then". We will be able to help you more at that time
Let's not kid ourselves. The lenders have not played fair in this either.
title_gal...
Well, that was the most diplomatic phrase describing the lenders and servicers I could have ever imagined. "They've not played fair."
Crimeny whiz! Darn them to heck! Those rotten guys.
Okay, so I certainly agree that those darn lenders haven't played fair. My mom was always pretty good at fixing those types of problems when we were kids... perhaps she's available to help with this. I'll check, she's retired now, but you never know.
I, of course, would use an entirely different lexicon to describe the behavior of lenders and servicers, but that's just me.
Furthermore, any loan modification company that tells a borrower to stop making their mortgage payments is NOT "legitimate." After all, if they were so good at securing modification, they wouldn't need the borrower's help in securing the modification.
I have been reading this thread since it began and I swore I was not going to post but this morning in re-reading from the beginning I simply had to comment to this.
You do understand that the LENDERS themselves are, at times, telling people not to make payments. Let me get really close to quoting here
" Ms. So and So I am sorry we are unable to help you with a modification because you are current. The fact that you are current shows us that you are able to make the payments that you have. If it gets to the point where you get behind on your payments you can contact us then". We will be able to help you more at that time
Let's not kid ourselves. The lenders have not played fair in this either.
title_gal...
Well, that was the most diplomatic phrase describing the lenders and servicers I could have ever imagined. "They've not played fair."
Crimeny whiz! Darn them to heck! Those rotten guys.
Okay, so I certainly agree that those darn lenders haven't played fair. My mom was always pretty good at fixing those types of problems when we were kids... perhaps she's available to help with this. I'll check, she's retired now, but you never know.
I, of course, would use an entirely different lexicon to describe the behavior of lenders and servicers, but that's just me.
LOL I was trying to be nice. Believe me I have said some much less diplomatic things to them in the last 6 months.
Furthermore, any loan modification company that tells a borrower to stop making their mortgage payments is NOT "legitimate." After all, if they were so good at securing modification, they wouldn't need the borrower's help in securing the modification.
I have been reading this thread since it began and I swore I was not going to post but this morning in re-reading from the beginning I simply had to comment to this.
You do understand that the LENDERS themselves are, at times, telling people not to make payments. Let me get really close to quoting here
" Ms. So and So I am sorry we are unable to help you with a modification because you are current. The fact that you are current shows us that you are able to make the payments that you have. If it gets to the point where you get behind on your payments you can contact us then". We will be able to help you more at that time
Let's not kid ourselves. The lenders have not played fair in this either.
title_gal...
Well, that was the most diplomatic phrase describing the lenders and servicers I could have ever imagined. "They've not played fair."
Crimeny whiz! Darn them to heck! Those rotten guys.
Okay, so I certainly agree that those darn lenders haven't played fair. My mom was always pretty good at fixing those types of problems when we were kids... perhaps she's available to help with this. I'll check, she's retired now, but you never know.
I, of course, would use an entirely different lexicon to describe the behavior of lenders and servicers, but that's just me.
LOL I was trying to be nice. Believe me I have said some much less diplomatic things to them in the last 6 months.
title_gal
And you were nice... overwhelmingly nice, as a matter of fact. And I'm sure you've said some less kind things about them in the past... but let's take the gloves off here. They've been and continue to be the problem. More so than any other single factor, these guys have lied, cheated and stole and continue to be the impediment to getting this country on track.
They are the thorn in the side of the administration. They are not part of the solution, they are the problem. So, I'm going to keep watching and writing and calling them what they are: not to be trusted.
And I'd love it if you'd keep commenting and let me know if I get too rude. My mom doesn't read this stuff and I need someone to keep me in line. (LOL)
they will show you what they want you to see.
successful modification can mean anything from any old offer from teh servicer, such as a higher payment in teh form of a forbearance, to an actual lower payment immediately while forgiving the past due (best case)
I wouldn't be so quick to applaud 'any' result.
Having direct experience with this stuff since its inception, the sales practices are the key to drive the dollars and they are an issue.
since you are not a govy auditor, well... i know u can't piss off your sponsors but if you make enough calls eventually someone will tell you what you want to hear.
imagine if:
before you publish go back and get a job anonymously somewhere that the files go through any of these top firms whom you are about to bestow verbal glory upon.
obviously they may know who you are by face but if you can put in 3 months of pounding the phone withouth them prioritizing your deals (because they know who you are)... and come out with sunshine stories...
hell, possibly have someone do it for you as a joint project... and see how many great jobs were done and how many are ' I can't believe my customer, who I sympathized with, sold them in... can't get help and won't get a refund! '
lets do a real grass roots comparison. confident your personal contact clients will get 9/10 closed with awesome results?
sure i know these companies close 99.99% of their files with lower payments, they told me so!
if reality is at odds with the painted picture, it takes a certain type to still keep their face on it eh.
i remain anon, and withdraw. at least i super-qualified my statements with prospect clients and they worked with me because they kew they had to do something, and everyone was calling with the 'inside connection' with zero downside. tgtbt. they respected honesty in approach. that way i wasn't embarrassed to take their calls over and over again when nothing happened and they couldnt get a refund.
of course when that happens it suddenly becomes the salesperson's fault for not qualifying it, doesn't it?
so if they agree to pay and fill out a form, supply docs they are pretty much qualified... but as soon as its troublesome they were never qualified and its the salesperson's fault? how the fudge does that work??
If you want them to sign a form that says:
YOU DO NOT NEED TO DO THIS. YOU ARE FREE TO NEGOTIATE WITH YOUR BANK ON YOUR OWN. YOU ARE FREE TO CALL THE GOVERNMENT HELP-LINE. THERE ARE NO GUARANTEES THAT ANYONE CAN DO ANYTHING. THE OPTION YOU ARE ABOUT TO SELECT COSTS MONEY AND THE OTHERS DON'T. THIS COMPANY MAY NOT BE ABLE TO HELP YOU IN ANY WAY.
This is pretty much what are agreement says! As it has to per state law, the state of Florida that is. We have to make the homeowner aware of all options.
If they do qualify for one of the Fed plans, and that is the best plan for them, then that is where they should go.
If the lender has a better plan and tried to put them in the new Obama plan so they can make a whopping grand on the deal from the Fed, then we push for the other program that is better for the homeowner. We do this because this is what they pay us to do.
The lender will negotiate for what is best for the lender, not the consumer. And if you are going to open this door it is best you have representation. Strong representation that is not afraid to file the necessary complaints against the lenders to those that will hold the lenders accountable for their actions!
Legitimate loan modification companies and law firms will become a key element in resolving this issue through the private sector.
not without a mandate for uniform results.
think fha limits.
the chaos...