Huff Post Crappy Loan Mod Advice

I've been going through a little loan mod thing for a while. Eight months as the matter of fact. In that time I've been denied, approved, denied again, scammed, lied to, and my intelligence has been questioned by people who can't tie their own shoes – it's probably why they wear those loafers and like Velcro so much.

Because this is something personal I keep close tabs on the news and what congress and the Obama administration are doing and listen intently to Barney Frank who claims to give a shit but when given the opportunity to express his opinion on the matter, like on the Daily Show, really says nothing at all.

Frank's first attempt to fend off impending foreclosures during the snickering Gee-dubya administration was an embarrassing failure. It was supposed to help 400,000 with the $300 billion that Congress approved – it helped one. Yeah, that wasn't a typo. It helped one person.

Matthew Palevsky of The Huffington Post has been covering the fiasco in a section appropriately called Dispatches From the Displaced. They've done an excellent job and I participated in some of the stories in that section.

I usually cruise around that section at some point during the day and check to see what's new in the loan mod area and how badly the administration is mucking things up these days. I like to torture myself.

$75 Billion was allocated to this program and supposed to help 4-6 million people losing their homes. It's helped – depending on who you believe – 50,000 – 100,000 people and they have no idea where the rest of the money went.

So when I came across Adrian Sainz's piece about how to prepare for a loan modification swimming joyfully amongst the rest of the articles on homeowners getting boned up the ass by banks I almost threw up a little in my mouth.

I don't know if Sainz is 12 years old or a reject from for a 1950's Miss Manners - Emily Post – Valium induced haze. The article is not only condescending to readers but makes modifying a loan sound like a tip toe through the cow shit, rather than the massive pain in the nads it actually is.

Here's Adrian's advice for getting a loan mod with my comments sprinkled in ...

Here are some questions and answers about what you should have on hand.

Q: What are some basic documents to gather ahead of a loan modification meeting?
A: First, the servicer will want to quickly find the file in question, so have the monthly mortgage statement in hand.

You'll also want every statement you ever had from the day you bought the house and any fees you may have incurred – including late fees from the bank holding onto your check for a few days and calling it late to keep your credit score down to make it harder for you to refinance.

Next, find the most recent statement for any homeowners' or condominium association fees. Some borrowers have seen association fees increase in light of more home vacancies brought on by foreclosures, stressing monthly budgets – so you'll want evidence of what you've been paying each month.
Also, borrowers who took out home equity lines of credit, and second or third mortgages, should have paperwork for those loans handy.

Handy? Within a month you'll pulling paperwork out of your ass that you never knew existed. And when you think you've reached the last pile the bank will point out one more shred they need and it'll be the one that's lodged directly behind your colon.

All of these documents go a long way in displaying a troubled borrower's financial situation and determining their eligibility for a loan modification. Borrowers should also enter the process with a budget plan that includes how much they can actually afford to pay in monthly housing expenses, including insurance and taxes.

Have every pay stub you've ever received since before you could legally work. Also be prepared to submit pay stubs every two weeks. The banks will usually time requests for your most recent pay stubs about four days before your next pay day to delay the process even more. The delay will be your fault.

You won't necessarily need a tax return since the Making Home Affordable plan provides for that with the 4506-T form allowing the bank to request your records directly from the IRS. Of course despite filling out the form the bank will call in a few weeks telling you that your paperwork is incomplete because you didn't submit your tax forms. They did this to me on April 16th. I had submitted the paperwork (including the last two years) in March.

If a borrower is self-employed, he or she should have a profit-and-loss statement to reference.
All this allows the loan servicer to more quickly determine a household's pretax income and a reasonable new monthly mortgage payment, according to Freddie Mac.

Also according to Freddie Mac, if you're self employed you don't qualify for a loan modification because it's impossible to prove future income and that makes you too a high a risk for a lower loan payment and the bank will be more comfortable keeping you at the higher payments since you've been making those payments with no problem. Make sense? IAs an additional bonus they'll point out your low credit score without taking any credit for it themelves.

Q: Are there any documents not specifically related to the home that should be nearby during the meeting with the loan servicer?
A: Sure. Bring along statements showing balances and minimum monthly payments on active credit cards, car loans, student loans and other debts or obligations, Freddie Mac says.
These documents give the servicer a sense of the borrower's monthly expenses outside of home-related expenditures, to come up with a manageable monthly mortgage payment that will be sustainable.

Sure just skip on down to the bank, paperwork in hand, hope in your heart, and a song in your pants.

They can get all of this information from your credit report, and they will. They'll request a report from credit bureaus on a daily basis – a request that indecently lowers your credit score with every request.

They will take these things into consideration and let you know without shame that you're expenses are of no concern them. Except when it comes to pointing out that you're spending too much on silly things like heat, gas for your car, electricity, and food.

We were told by the bank and by Hope Now that if we turned down our heat (wear sweaters), cancel the cable and ISP, get rid of our cell phones, etc, we could more than afford the impending 11% jump in our rate. Oh yeah … and Hope Now, a government agency formed to help homeowners, called our bank to inform them of their findings.

Q: Is that all?
A: Actually, no. Freddie Mac recommends that homeowners write a statement that discusses the financial problems that are or could be leading to foreclosure.
This should be an honest account – the writer should set pride aside and give the servicer a sense of how bad the situation really is.

This is required! Not recommended. This is the most important part of the process and you should mention everything including your grandmother dieing seven years ago and how you're still grieving. Mention every job you've ever lost, divorce you've been through, rehab you've been through and surgery – leave out the boob job.

Loan modification can be a complicated process, involving complex contracts and agreements. Borrowers might want to have a lawyer guide them through the process to work through any technicalities and make sure the lender is taking the correct steps.

Yeah, that's right, how about a loan modification company too. With a lawyer as a front.

Q: What are some dangers to watch for in the loan modification process?
A: A significant problem is mortgage-reduction scams, in which consultants market their services directly to the consumer and ask for an upfront fee, often with a promise to rescue the borrower from foreclosure by negotiating with the lender on the borrower's behalf. These fees can be in the hundreds or thousands of dollars.

Also that the banks have absolutely no incentive to modify your loan and will continue for as long as you can handle it to suck every last penny out of you.
Sometimes, however, the work is never done, and the fee is not returned.

Government agencies have been cracking down. On Wednesday, state and federal prosecutors said they filed 189 lawsuits as part of a nationwide sweep targeting loan modification consultants accused of bilking homeowners.

The federal government has outlined some fraud warning signs: For starters, borrowers should be wary of aggressive marketing tactics, requests for upfront fees and guarantees of foreclosure rescue. Consumers also should not sign any documents without reading them carefully.

Hey wait! That sounds like a bank. And the retarded mortgage they pawned off on people.

Other things to watch out for, according to the Treasury Department: offers to buy the house and then rent it back to the homeowner, instructions to the homeowner not to contact the lender and false claims of government affiliation.

Great advice except that this is the exact plan the administration plans to propose in another outstanding douche move.

It's me again. Normal and unitalicized.

I find it hard to believe that an article this bad would get past an editor of a major news outlet.

The incredible lack of research that went into this article required little more than reading a few of the articles in the surrounding columns to rectify.

I don't know where Sainz got the information to put this steaming pile of crap together, but I'm guessing it was from a bank. That's how all the big reporters did it when they reported on how well Wall Street was doing right?

Comments (0)

Subscribe to this comment's feed

Show/hide comments

Write comment

Show/hide comment form

Name

Title

Comment

smaller | bigger

Subscribe via email (registered users only)

Add Comment