Walter Getz

The Good. The Bad. And the Ugly....Or Just Bad and Ugly?

Something to think about:

Over the last two years or so, as we've seen the foreclosure crisis continuing to rock our country's already fragile economic stability, homeowners have been given ever increasing and new ways to stall and prevent foreclosure. Earlier this year, with the creation of HAMP, homeowners have felt that the government has stepped in and finally done something to help them to save their homes from foreclosure sale.

The GOOD...or is it?:

If you've been reading/watching the news recently, you may have heard that the HAMP program has reached its goal of 500,000 loan modifications one month earlier than the November 1st deadline. This is very exciting for homeowners, showing promise, a plan that works, and hope for the future.

The BAD:

In a recent article "Is Foreclosure Relief Failing?", there is another side to the story. It seems that the hype over 500,000 home loans having been modified is extremely exaggerated. In fact, 500,000 loan modifications falls seriously short of the actual number of modifications completed.

As reported in the above article, 500,000 homeowners have been provided with a three month trial period to make payments to their lender, after which a modification would be completed. Once those payments have been made as agreed, the bank should (taking those completed payments as a sign of good faith) do what they can to modify the terms of the loan to meet a lesser financial standard, while ensuring no further default occurs. Unfortunately, in many cases these trial period payments are calculated with no consideration of the homeowner's income, their financial status, or ability to repay.

The Ugly:

With just over 1700 actual modifications having been completed, we have yet to see the remaining 498,300 loan modifications the government and banking industry have been proud to state they have completed. A trial period does not a loan modification make. Many times (as I have personally experienced with my own clients) the lender takes these "trial" payments (again with no consideration of income or ability to repay) and "promises" to do a loan modification after the trial period has expired. In many cases, homeowners are declined a modification after the trial period because their financials simply do not qualify them under their lender's modification terms, nor under the guidelines of HAMP. How many of these 500,000 homeowners will actually qualify for a loan modification? If they do not qualify for a modification under HAMP guidelines, will their lenders look outside the box at doing an in-house modification? Doubtful.

Is there a Solution?

Is there a solution to this issue? Is there some common sense plan that can be put into place to make it easier to determine if a homeowner deserves/qualifies for a loan modification? Should there be as much hype about modifications if so few are actually being completed?

Educating the Masses:

Many here are experienced with Short Sales. A good and viable solution to a homeowner's foreclosure problem. Additionally, Short Sales make good sense for investors, who find themselves underwater, upside-down, and in their own financial dire straits when their renters are loosing jobs and income just as much as homeowners are. This however, is not the ONLY solution. There are Loan Modifications, Deed in Lieu of Foreclosure, Cash for Keys, Forbearance and Repayment Plans, Principle Reductions, and more. But...where do these homeowners go to get help to decide what is the right path for them? Who is truly helping the masses?

Government Agencies and HUD offices across the country are in place to help homeowners to get out of foreclosure. Millions of dollars in tax payer funds have been distributed to deal with the massive amount of foreclosures, to provide advice to homeowners, at no cost to them, yet untold numbers of these people seeking help from these agencies are getting no further than they can on their own. Is this a good investment of out tax payer dollars?

Many agencies, professionals, media outlets, distribution flyers (it goes on and on) advise homeowners to obtain the help of an attorney, and the result is an influx of bankruptcies (many of which fail). Do attorney's really have any more training than the homeowner themselves on negotiation with their lenders? Are attorney fees justified if they fail to obtain the solution the homeowner so desperately needs? Will the FTC come down hard on attorneys for taking money from these people and providing no solution?

Over the coming weeks, I will blog about each of the solutions above, as well as the outlets to obtaining these solutions. I invite you to subscribe to my blog and comment on each and every one as they are posted. A true solution must be found, a way to get the masses educated, dispel the myths, and arm against the unscrupulous.

Your ideas, comments, and theories will be welcome here, and should this blog obtain the right sort of response, a new group in the AR community may be formed as well.

***Disclaimer*** Comments on this and any other posted blog may result in quotes. Should your comment be found to be of substantial substance, it may be copied or used in some way to illustrate a point. Comments may also be inspiration for other topic issues and utilized to create new blog posts concerning comment subjects.

Walter Getz is a founder of 1st Choice Mortgage Resolutions, a default resolution company, helping homeowners to get out of foreclosure. Should you have questions or concerns you may direct them to the number below.

1st Choice Mortgage Resolutions offers FREE consultation services to any homeowner facing default or foreclosure. You may obtain your free consultation by contacting our office at the number listed below.

1st Choice Mortgage Resolutions

1129 Monroe Avenue

(585) 287-5528

Today, Yahoo! News posted an article about the current state if the economy in respect to the foreclosure market.

You can check the link out here: Record 12% behind or in foreclosure!

This is truly a staggering figure! And to think....its only going to get worse!

I'd like to open a discussion about your thoughts on the economy. Here's some points I'm (and others) are interested in knowing:

What are you doing to brace yourself for the impact of a lost job/income?

How long can you survive on your savings if you were to lose your income?

What tips/tricks are you using to ease the burden of rising costs and lowered income?

or, just post your thoughts on the economic issue, where you think were headed, what you think a good "corrective" strategy would be.

Remember, we all are individuals, this means that we all are effected in different ways. I personally would like to know what your thoughts/experiences with this crisis are.

Sincerely,

Walter W. Getz

1st Choice Mortgage Resolutions

If you've been following foreclosure news, you probably already know that in the state of Ohio, lawmakers are attempting to place a 6 month moratorium on foreclosures.

This is not something new that has been invented by our "trusty" politicians looking out for the best interest of residents of Ohio, but a re-enactment of a tactic utilized by government during the Great Depression. The idea is to give homeowners some time to resolve their foreclosure matters.

If you are in foreclosure, the passing of this bill by the House in Ohio is good news for you. The bad news is that the Senate in the State of Ohio is controlled by Republicans, who have to date, shown fierce opposition to this matter. Should this bill be passed by the Senate, however, you will be provided with a six month reprieve as it relates to the loss of your home through foreclosure.

As an optimist, I expect that even politicians will do the right thing. In this case, it means that they will have to do what their voters want. Remember when Obama was running for president? If you followed his campaign, or were active at all in the process of electing a new President, or even at any point watched the news, you saw how Obama's campaign utilized the "Vote!" strategy to get more people to vote. Young and old, droves of new voters registered and voted. Even U.S. citizens who did not make it a priority to vote. This election, more than any other, we saw that the power of voting can certainly influence an election. Going into election day, McCain and Obama were practically neck and neck. No one knew what was gonna happen. Unsurprisingly (to me at least), Obama won this term's election by a landslide!

So what does this have to do with you homeowners in Ohio? How does this help you to resolve your foreclosure matters? Simple. Your Voice Counts!

Just because elections aren't over, doesn't mean that you're job as a voting citizen is through. Do you ever wonder why sooo many people complain about politicians? Do you ever complain that you shouldn't have voted for that guy (or gal), that you made a bad decision? Well the truth is, you pay their salaries with your tax dollars! Its your job to make them work for you!

In addition to having a job to do, each politician is aware of his public view, his ability to be re-elected, as it were. They want to know what you think, they want to know were you stand, they want to know if you will vote them in for another term. Use this power to your advantage! Contact your local senator and tell them to get on the ball! Tell them to vote for this moratorium, which homeowners across the country so desperately need. If Ohio passes the moratorium, it is very likely that other states looking to do the same will follow suit.

Don't know how to contact your Senator? Go to your state senate information page.

Go to their page (linked above) contact them vial phone or mail, and tell them you NEED that time to work out a plan with your lender! Every voice counts, and just because you may lose your home, doesn't mean you won't vote for them in the next election. They work for YOU! Put them to work!

If you have any questions on how you should prepare for a workout with your lender, I would be happy to speak to you about your specific situation. You may contact me by clicking on my profile information, or going to my company website. 1st Choice Mortgage Resolutions You can find contact information on that page. Consultations about your mortgage are free! Get the answers you need and deserve!

Sincerely,

Walter Getz

Executive Resolution Consultant

1st Choice Mortgage Resolutions

Here's the truth. You've been searching for it, I'm gonna give it to you!

The truth is not something you want to hear. But, I'm here to give you the facts, whether you like them or not. It's my job to tell the truth, because I know the truth!

If you are experiencing problems with your mortgage, be it late payments, skyrocketing interest rates that result in payments you can no longer afford, default due to job loss, medical, divorce, or other reasons, you most likely have seen advertisements about loan modifications that can help you to save your home. Even those who are considering a modification because they have a rate adjustment coming up need to read this!

This option is advertised even more than a short sale, and like a short sale, not everyone who has a mortgage issue qualifies for a loan modification.

To make matters worse, loads of 'would be' modification companies are asking for your money for a program they are pushing, and in many cases, are unable to actually perform the service for which you have paid. As a result we see SCAM everywhere! Truthfully, these companies might be able to get SOME resolutions in the form of a loan modification, but if you are in default, a modification is NOT necessarily the option you will get. Here's a list of reasons why you should be careful about seeking a loan modification:

1. If you are not behind on your payments: -Unless you can prove that you a default is imminent it is not likely that you will be qualified for a loan modification. Loan modifications are designed to prevent foreclosure where possible, but this does not mean that just because your payment is about to go up that you qualify for one. You must prove that you have a true hardship. Wanting a modification just because your equity has been sucked up by declining property values does not make you a candidate for loan modification either. Understand, I am in no way condoning that you skip payments on your mortgage in order to show "imminent default"! If you can afford to make your payment, you should do so! Your best option is to see if you qualify for a mortgage refinance under FHA Secure or some other program.
   
2. Not all lenders are even entertaining modifications! - Take for instance a client I am working with right now. He has a mortgage, sold to him at 11% for 2yrs, with the interest rate scheduled to adjust in June of 2009. The company who holds the mortgage note is NOT the originator of the loan, and purchased this loan from a company that is no longer in business. This lender (PMH Financial, LLC) is not a company that entertains workouts for their borrowers. They want all of the funds to reinstate the loan, or nothing at all. NO repayment plan, NO forbearance agreements, NO loan modifications! While I have been able to negotiate on my client's behalf, and have been able to postpone the sale date long enough to allow my client to obtain funds to reinstate, this is not the type of solution we borrowers have come to expect due to the hype about modifications. In this case the borrower can afford to reinstate (many thousands of dollars), and will be able to make the payments (even after the rate jump next month) but many many other borrowers with this company cannot afford to reinstate, which ultimately means: loss of home. REO agents are LOVING this company (though I've heard through the grapevine they are slow to pay expenses)!
3. Government programs don't force lenders to modify loans. - Making Home Affordable has been designed to help homeowners to modify their current loan to save/prevent them from foreclosure. Did you know that to date, only 14 lenders have signed onto this program? That's 14 out of hundreds! In addition, these lenders are in no way required to provide loan modifications, they simply get incentives if they do provide one to you. This means that if a lender doesn't want to give you a modification, you most likely aren't going to get one.
4. Financial information submitted by borrowers does not qualify them for modification. - Borrowers are working out their mortgage default and foreclosure matters by themselves. This is good and it is bad. One way it's good is because they can save the money they would pay a professional consultant or attorney, and apply it to their past due amount on the loan. Those who are lucky enough to get the modification they are looking for have had the "perfect" situation. It's bad because they don't understand what the numbers look like, or how they work. They may disclose too little information, or too much! Without understanding how the financial aspect of a modification works, they could be shooting holes in the boat before they even begin heading to shore!
5. Time is of the essence! - While not impossible, the farther along you are in the foreclosure process, the more difficult it becomes to be approved for a modification. On average, I have found that most lenders want 40% of the balance due on a loan to consider modification. This means that if you are behind 6 months and owe $12,000.00 and accrued costs and fees add up to an additional $6,000.00 you should have $7,200.00 in savings to apply towards a contribution. This is extremely difficult for many borrowers. To save in this economy is difficult enough. Don't wait until the last few weeks to try to resolve your problems, get professional advice immediately!

These are the major issues I have seen in the clients I work with. Many of them attempt to resolve their foreclosure default on their own, many of them have gotten scammed out of money from loan modification companies and even attorneys, yes attorneys! If you are going to hire a professional to do the work of a resolution for you, you need one who understands loss mitigation, the foreclosure process, and what the lender is looking for! You may not like the answer you get, but you need to understand why you may or may not qualify for certain workout plans, and obtain more than one opinion! This is the largest investment you are likely to make in your entire life! Make smart decisions!

My company offers free consultations to homeowners. We do not take on every case, and are not permitted to work in some states. However, helping homeowners is what we do! No matter were you are located, you owe it to yourself to get an opinion from 1st Choice Mortgage Resolutions! Even if it is just a second opinion. View my profile or check out my company's website for direct contact information.

As the economy does its thing to correct itself, we are all very much aware of the number of unemployed out there. Good folks who lost their jobs do to downsizing, bankruptcy, and other such actions that corporations are utilizing to try to stay afloat. But are these companies making good decisions?

Chrysler is one of the larger companies who have seen loads of media attention in regards to their restructure. From selling off assets, to attempting to negotiate new deals with creditors, to asking the government for help, this company has seemingly done it all to stay alive.

The link below, however, shows (in my opinion) how simply stupid some of these companies can be. Choices and decisions they are making are not making sense. This article posted by CNN puts some much needed attention on poor business practices. Since when do we end profitable business relationships? It is my opinion that Chrysler could have done more to keep this particular dealership, and seemingly many like it alive. Check out the article here: Chrysler's business decision is personal.

As we all get involved in our part to help the economy, pouring our hearts and minds into the work that we do, it is unfortunate to have to see things like this. Make me feel powerless. Yet day in and day out, it's still about the individual for me, what can I do to help one more family? How do I get much needed information out to those that truly need it? How do I overcome the vast amount of incorrect and poorly placed information out there? When will the tide turn? As we attempt to keep the foreclosure flood at bay, we have these types of things to look forward to.

Those of us who are working to help the individual, I beg you, do not lose sight of this. There are things out there that cannot be controlled, but by focusing on each family individually, reserving judgment till after the facts are delivered, and helping to resolve the big problems one step at a time, we will stay sane and do more good.

I invite each of you to comment on your thoughts in regards to this matter. Also, if you are feeling the stress of the world, comment on how you are finding solutions to deal with this. How do you advise your clients when it comes to dealing with the emotional toll of their situations?

Sincerely,

Walter Getz

1st Choice Mortgage Resolutions

Foreclosure Default Resolutions through Loan Modifications, Short Sales, and other Workout Agreements

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