Michael Haltman

Friday, October 24, 2008

Mortgage Modifications: What Are They?

Watching Stock Market Futures

I had been asked to write a piece on mortgage modifications that I was not going to post on my blog, but watching what could be a Black Friday in the markets has inspired me to submit it.

If You Are Late On Your Mortgage Payments Or About To Face A Foreclosure Action: You Do Have Options!

Do Not Just Assume That Your Lender Holds The Upper Hand

Mortgage Loan Modifications:

Why It Is Critical To Use An Experienced Professional

What Happens To Your Home When You Can No Longer Afford Your Mortgage Payment?

With the turmoil in the financial markets, rise in unemployment, drop in the equity markets, and the incredible increase in the amount of mortgage lates and foreclosures around the country, is there anything that a homeowner can do to save their home from the lender that is holding the mortgage note?

What Is A Mortgage Modification?

· Lower the existing rate and turn an adjustable rate into a fixed rate.
· Put the amount that has been missed on the back of the loan in a recapitalization.
· Defer payments for a number of months.
· In some cases reduce the principal amount of the loan

How Can A Modification Be Accomplished?

There are two ways for a modification to be accomplished. The 1st is for a homeowner to go to their lender and attempt to negotiate the modification themselves. In many cases this can be penny wise and dollar foolish, because a homeowner is in a state of maximum stress and anxiety, doesn't really know the process and is typically dealing with a person within the institution that may not have a real interest in working with them or in helping them.

The other way is to work with an attorney who is specially trained in modifications, who knows the people in the banks to speak with, knows the borrowers rights and all of the laws in a specific jurisdiction.

What are some of the reasons to use a professional?

· The complexity of the process.
· They know the point people in the banks to speak with and work with.
· They know the exact information that a bank wants to see and how to package and present it.
· They know what can be negotiated and what should be attainable.
· Their ability to halt or delay the foreclosure process.

Some Of The Typical Objections To Hiring A Professional

Why can't I do this on my own and save some money?

Ò This process is not as simple as making a phone call and getting the deal done. It is a complex process that requires a professional that has seen it and done it successfully. Saving your house is not the time to learn something new!
Ò It is critical to get to the RIGHT people at the lender, and a professional will know them and have a relationship with them. A borrower will typically be speaking with the collections department.
Ò A professional knows the right information to present-cost analysis, valuation of house, etc.
Ò The mortgage modification professional will present a clear and specific proposal in writing instead of asking the bank what they will do. Modification experts will know what the different lenders have been willing to do in the past
Ò The bottom line is that you could save money and attempt to do a modification yourself-but it could cost you the house if it is not done correctly
Ò The professional knows how to stave off foreclosure (halting the process)
Ò If your loan modifications expert can negotiate just one extra item (such as rate adjustment), a borrower could save tens of thousands of dollars.

Why is it so expensive?

Ò The team that you will be hiring will be taking all of your financial and personal information, and be preparing a formal proposal that will be speaking to your specific lender and to the proper decision makers within that lender.
Ò Each modification requires 30 to 40 hours in conversations with the lender.
Ò Once the framework has been worked out, your team will move you from the agreement to settlement.
Ò If you hired an attorney to negotiate on your behalf at $300 per hour (conservative)-35 hours of work would be a cost of $10,500 and they would not typically be as experienced as the attorneys that specialize in mortgage modifications.

I don't have the money to pay for this

Ò In reality, paying a professional $2,000-$4,000 to save $100,000, save your long-term credit and save your house? There is really no question!
Ò There are different ways to get the fee, none of which are ones that you would typically want to think about, but again the goal is to keep your house: credit card, savings, personal loan, loan/gift from relative. You can typically use any combination.
Ò If a homeowner has already stopped making their mortgage payments-where is that money going to?
Ò A typically overlooked cost is what it would take them to move out of your home and into a rental, including deposit, moving costs, first months rent, utilities and more.

I can't do this without a guarantee of success

Ò You are paying a mortgage modifications expert and its' legal team to negotiate on your behalf just as you would an attorney in any action. If you hired an attorney, and you lost the case, would the attorney refund your fees?
Ò Your modification firm will spend up to 50 hours or more preparing documents and negotiating.
Ò Reputable and time tested mortgage modification firms do not accept files that are not reasonable or clients who are not qualified. Accepted files have a 90%+ chance of success.
Ò You, the homeowner, have the final say-so in accepting the offer from the bank.


The bottom line, is that it is imperative to work with a firm that comes highly recommended, that is professional and ethical and that provides you with as good an experience as possible during an extremely stressful and emotional time. Remember that you do have options!!!

If you have any questions, please email me and I will be more that happy to share my knowledge with you.

Michael Haltman, President
Exeter Commercial LLC
131 Jericho Turnpike, Suite 202
Jericho, New York 11753
Haltman@easycommercial.com
exetertraining@aol.com

When a homeowner can demonstrate a hardship that is taking away their ability to make their mortgage payments at the current level, a mortgage modification can be negotiated that could:
My firm, Exeter Commercial LLC, is a commercial mortgage lender, broker and trainer. Many of our deals come to us through referrals from residential mortgage brokers. Because of this we have heard 1st hand the stories behind the rash of foreclosures and soon to be foreclosures that are happening around the country.

We have also seen and heard the stories of people that are facing this prospect of losing their homes, that are trying to work with their banks to save their homes or hiring someone that says that they can help them, when in reality they really can't. Due to all of this, as well as to the fact that some of these same situations are now arising in the commercial real estate market, I have looked into some of the options that mortgage holders have.

What I found is a process known as mortgage modifications. These are explained below, as well as some of the reasons that using a true professional is critical. The key word here is true. If you were having heart surgery you would not want to use a Dr. doing their 1st one, and the same holds true here.

At the end of this piece I have posted my contact information in the event you need any advice.

Have You Fallen Behind On Your Mortgage Payments?

Mortgage Modifications: You Do Have Options!

If You Have Fallen Behind On Your Mortgage, We Can Help You Restructure Your Loan Into A Payment That You Can Afford!

Your loan will be re-negotiated by an attorney that is not only familiar with the laws of your state, but with the banks that they negotiate with.

Nobody wants foreclosure, because it is a lose-lose proposition for the homeowner as well as the lender.

•· Does Everyone Qualify For A Modification? No. But if your initial pre-application is accepted, there is typically a high degree of success.

•· What Does A Typical Modification Success Story Look Like? The borrower will be 1 or more months behind, the outstanding loan balance will be above $150,000 and the interest rate will be above 7.5%.

•· What Are Some Of The "Events" That Can Cause Missed Mortgage Payments? An ARM reset, illness, loss of a job, death of a spouse, failed business, etc.

•· Is There A Fee Involved? You will enter into a retainer agreement directly with the representing attorney that will describe all of the fees. If the modification is not successful, the majority of the fees will be refunded.

What Is The Next Step?

Simply respond with your contact information, and we will send you our pre-application form. From this form we will be able to tell you, within 24-48 hours, if we feel that we can help you.

There Is Nothing To Lose, So Respond Now!!!

Mike Haltman, President

Exeter Commercial LLC

131 Jericho Turnpike, Suite 202

Jericho, New York 11753

haltman@easycommercial.com

exetertraining@aol.com

http://politicsandfinance.blogspot.com

Blog Feeds On Active Rain

I received an ActiveRain email that included a post by Jason Crouch, Broker - Austin Texas Real Estate, that took me to the instructions on adding an email subscribe box to my outside blog within my ActiveRain blog. Thanks Jason.

I would like to take this opportunity to invite anyone that reads my outside blog on ActiveRain, or who maybe has not to take a look, and if you like what you read to use the box on the right side of the page to sign-up for emails of my blog sent right to you.

I have to admit that there are some days when I do not get the chance to copy my blog to ActiveRain, so that this would insure that you would not miss a post.

The name of my blog is The Political and Financial Markets Commentator, and what I try and do is to examine how all of the cross currents in the world are going to effect our business as well as our lives. You can take a look at the blog itself at http://politcsandfinance.blogspot.com, and then sign-up here for the emails.

Let me know if you have any questions.

Mike

And The Scapegoats Are?

Today's Market Action

Before we get into the discussion of who is going to be the fall guy(s) and gal(s) for the debacle that we now refer to as the Financial Crisis of 2008, let's take a quick look at the continued improvement in the indicators of credit market liquidity.

The Ted Spread

The LIBOR rate continues to show improvement by dropping to the lowest level we have seen in weeks at 3.8%. The 3-month bill is at a level of approximately 1.06%, bringing the spread to the neighborhood of 2.7%, still extremely wide but well below the close to 5.0% at the worst.

For new readers LIBOR represents the London Interbank Offered Rate, the rate at which banks are willing to lend to each other. The 3 month bill is what is called the risk free rate, or an investment, because it is backed by the full faith and credit of the United States, that holds no risk of default.

When market fear was at its' worst and trust between the banks in terms of each other solvency was at its' highest, the Ted Spread was the widest (LIBOR - 3 month bill).

The VIX

The VIX, a measure of angst and fear closed at 53, well off the highs of 81 but well off of the typical range in the 15 to 20 range. Getting better but still a long way to go.

The Envelope Please

As is the American way, any problem requires that the villain(s) be identified and paraded in front of us so that we can find closure. In this case, many of the people that are most complicit in the problems that we now have are some of the loudest in saying that someone has to pay. Of course that doesn't mean them.

Our politicians that ignored what was going on, and even passed legislation that enabled many of these companies to proceed is classic posturing and might even constitute pomposity. These are many of the same guys that benefited from sweetheart mortgages that the companies lavished on them. These perks were at the very least a lack of judgement, and at the very most approaching something else.

The American public that for the most part ignored any sense of a problem giving 110% LTV mortgages to people with no income and poor credit history, who saw housing prices skyrocket and nothing but construction cranes dotting the skylines of many cities such as Miami and Las Vegas, is screaming for the heads of someone, anyone, that has led us down this slippery slope of financial destruction.

Does that mean that the corporate executives of some of these firms that earned big money while driving their stocks into the ground while professing that all was well have no guilt? Of course not. And pay some of them will.

The Winner (Loser) at least for now

Lehman Brothers and particularly Richard Fuld (until a new villain is chosen)

From The Political and Financial Markets Commentator at http://politicsandfinance.blogspot.com

Wednesday, October 15, 2008 (7:10 AM EST)

From Exuberance To Business As Usual

Back To Business As Usual
Monday we had the huge stock market rally on the heels of the news coming out of Europe over the weekend, which took us into the pre-open announcements in the US on Tuesday, which led into a continuation rally, at least at the open of trading on Tuesday (the open was the high). We are now back to the basics of the market, trading on uncertainty, prospects for a recession of undetermined length that will have a large impact on corporate earnings as well as a slew of economic data being released today and down the road.

At this point, although it is the stock market that tends to get all of the headlines, the performance of the stock markets are secondary to the functioning of the credit markets and the hope for renewed willingness on the part of the banks to lend. Given the magnitude of the injection of liquidity by the central banks around the world in addition to all of the other moves being made, this should happen.

On The Docket For Today

Today we will be seeing the release of retail sales for September, wholesale prices for September, a read on the health of manufacturing activity in October, business inventories for August and the Fed's Beige Book that gives a read on economic activity. With the backwards looking nature of most of these numbers they are not all that important, but will have some impact.

Health Of The Credit Markets

In a continuing trend of the past couple of days, the LIBOR rate is slowly moving down, set this morning at 4.55%, down about 6bp from yesterday. Still very high, compared to the 2% range prior to the Lehman fallout, but it is definitely moving in the right direction. For those not familiar with LIBOR, it is the London Interbank Offered Rate and is the rate that many loans around the world, such as mortgage loans, are set off of.

We continue to watch and listen. New addition on the blog: current stock and mortgage rate quotes on the right side midway down, brought to us by SaneBull. Let me know if you think this is good to have there.