Introduction | p. 1 |
About This Book | p. 1 |
Conventions Used in This Book | p. 2 |
What You're Not to Read | p. 3 |
Foolish Assumptions | p. 3 |
How This Book Is Organized | p. 3 |
Getting Up to Speed on Loan Modification | p. 4 |
Kick-Starting the Process: Applying for a Loan Modification | p. 4 |
Hammering Out the Details with Your Lender | p. 4 |
Dealing with an Uncooperative Lender | p. 5 |
The Part of Tens | p. 5 |
Appendixes | p. 5 |
Icons Used in This Book | p. 6 |
Where to Go from Here | p. 6 |
Getting Up to Speed on Loan Modification | p. 7 |
Keeping Your Home by Modifying Your Loan | p. 9 |
Grasping the Loan Modification Concept | p. 9 |
Reducing and fixing the interest rate | p. 10 |
Extending the term | p. 10 |
Reducing the principal balance | p. 11 |
Dealing with delinquencies | p. 11 |
Re-amortizing the loan | p. 12 |
Considering Other Foreclosure Alternatives | p. 13 |
Do You Qualify? | p. 14 |
Assessing Your Needs | p. 15 |
Opting to Work with a Pro or Go It Alone | p. 15 |
Hiring a pro | p. 15 |
Dealing directly with your lander | p. 16 |
Getting Your Ducks in a Row | p. 17 |
Gathering essential documents | p. 17 |
Plotting the timeline | p. 17 |
Logging all correspondence | p. 18 |
Following the Process from Point A to Point B | p. 18 |
Preparing and submitting your application | p. 19 |
Playing the waiting game | p. 19 |
Making your case during the homeowner interview | p. 20 |
Structuring a workout plan | p. 20 |
Reviewing the lender's initial offer | p. 21 |
Pitching your counteroffer | p. 21 |
Closing the deal: Now what? | p. 22 |
Taking Legal Action-Only If Necessary | p. 22 |
Taking Stock of Your Situation | p. 23 |
Understanding How You Ended Up in This Mess | p. 23 |
The mortgage meltdown: From Wall Street to Main Street | p. 24 |
Other events beyond your control | p. 28 |
Common triggers you may have some control over | p. 29 |
Sizing Up Your Financial Situation | p. 30 |
Tallying your monthly income | p. 30 |
Computing your payments on debt | p. 31 |
Calculating your debt-to-income ratios | p. 32 |
Dissecting your current budget | p. 34 |
Estimating an Affordable House Payment | p. 37 |
Basing your estimate on a conservative back-end ratio | p. 37 |
Basing your estimate on your monthly budget | p. 38 |
Evaluating Your Options | p. 41 |
Negotiating a Work-Out Solution with Your Lender | p. 41 |
Modifying your existing loan | p. 42 |
Reinstating the loan | p. 43 |
Negotiating forbearance | p. 43 |
Considering principal forbearance | p. 44 |
Refinancing Out of Trouble | p. 45 |
Consolidating your debts | p. 45 |
Refinancing the old-fashioned way | p. 47 |
Doing a short re-fi | p. 47 |
Playing the Bankruptcy Card | p. 48 |
Getting Out from Under It: Selling Your Home | p. 49 |
Selling for a profit: Do's and don'ts | p. 49 |
Selling to break even with a short sale | p. 50 |
Selling quickly to an investor | p. 51 |
Teaming Up with an Investor to Stay in Your Home | p. 51 |
Selling your home and buying it back | p. 52 |
Selling your home and renting it back | p. 53 |
Ditching the Property | p. 53 |
Exchanging a deed in lieu of foreclosure | p. 53 |
Living rent-free through redemption | p. 54 |
Abandoning the property | p. 55 |
Redeeming the Property Post-Auction | p. 55 |
Doing Nothing-A Terrible Choice | p. 56 |
Keeping an Eye Open for Brand-New Options | p. 57 |
Deciding Whether to Team Up with a Pro or Fly Solo | p. 59 |
Weighing the Pros and Cons of Hiring a Professional | p. 59 |
Examining the pros | p. 60 |
Analyzing the cons | p. 62 |
Identifying Professionals Who Can Assist You | p. 64 |
Loan modification attorney | p. 64 |
Foreclosure attorney | p. 65 |
Bankruptcy attorney | p. 65 |
Real estate attorney | p. 65 |
Credit counselor | p. 66 |
Real estate agent | p. 67 |
Mortgage broker or loan officer | p. 67 |
Choosing the Right Individual or Company | p. 68 |
Locating qualified candidates | p. 68 |
Doing some detective work | p. 69 |
Asking the right questions | p. 69 |
Making an informed choice | p. 71 |
Avoiding clever schemes and scams | p. 72 |
Scraping Together Money for Upfront Fees | p. 73 |
Teaming Up with Your Representative | p. 74 |
Kick-Starting the Process: Applying for a Loan Modification | p. 75 |
First Things First: Contacting Your Leader | p. 77 |
Checking Out Your Lender's Web Site | p. 77 |
Clicking your way to something useful | p. 78 |
Knowing what to expect | p. 78 |
Tracking Down a Representative Who Can Help | p. 79 |
Making the initial call | p. 80 |
Bypassing automated systems | p. 82 |
Communicating effectively with foreign call centers | p. 82 |
Taking names and extensions | p. 84 |
Describing Your Situation | p. 84 |
Finding Out What Your Lenders Is Willing and Able to Do | p. 85 |
Checking Application Requirements | p. 87 |
Listing the items required | p. 88 |
Getting a shipping address and fax number | p. 88 |
Asking about timeliness | p. 89 |
Keeping the Debt Collectors at Bay | p. 89 |
Gathering Facts, Figures, and Documentation | p. 91 |
Digging Up Documents | p. 91 |
Proof of income | p. 92 |
Proof of hardship | p. 92 |
Mortgage statements and related documents | p. 93 |
Other loan statements | p. 95 |
Monthly bills and expenses | p. 96 |
Closing papers | p. 96 |
Documenting Your Property's Market Value | p. 98 |
Authorizing Your Representative to Speak with Your Lender | p. 99 |
Knowing What to Ask For | p. 101 |
Recognizing Your Three Main Objectives | p. 101 |
Curing any default | p. 102 |
Lowering your monthly payment | p. 103 |
Keeping your home | p. 104 |
Establishing a Baseline with Your Current Mortgage | p. 105 |
Playing ""What If?"" | p. 107 |
Test-driving a lower interest rate | p. 107 |
Spreading payments over a longer term | p. 108 |
Adjusting the principal balance | p. 109 |
Mixing it up by adjusting several variables | p. 111 |
Trying on an interest-only loan | p. 112 |
Considering the Potential Fallout | p. 113 |
Assessing the effect on the former loan | p. 114 |
Forecasting the effect on your credit rating | p. 114 |
Gauging the effect on your ability to pursue future actions | p. 114 |
Assessing the tax implications for discharged debt | p. 115 |
Preparing and Submitting Your Application | p. 117 |
Penning Your Hardship Letter | p. 118 |
Recognizing eligible hardships | p. 118 |
Answering a few questions | p. 119 |
Reviewing sample hardship letters | p. 120 |
Creating Financial Statements | p. 123 |
Painting a current financial portrait | p. 123 |
Projecting your post-modification finances | p. 125 |
Signing, Sealing, and Delivering | p. 127 |
Arranging your documents | p. 127 |
Signing on the dotted lines | p. 128 |
Labeling every page | p. 128 |
Copying the entire packet | p. 129 |
Submitting your application | p. 129 |
Keeping the Process on Track and on Time | p. 131 |
Knowing What to Expect | p. 131 |
Documenting the Process for Your Records | p. 132 |
Recording conversations | p. 133 |
Keeping copies | p. 134 |
Cross-checking the ""facts"" | p. 135 |
Following Up with Calls and Correspondence | p. 135 |
Keeping in touch by phone | p. 135 |
Sending or faxing a letter | p. 137 |
Remaining in the loop via e-mail | p. 137 |
Dealing with Lender Delays | p. 138 |
Negotiating an Extension or Adjournment | p. 139 |
In the Meantime: Exploring Other Options | p. 140 |
Hammering Out the Details with Your Lender | p. 141 |
Discussing Loan Modification Scenarios with Your Lender | p. 143 |
Looking at the Situation through Your Lender's Eyes | p. 143 |
Practicing the Three C's of Working with a Loss Mitigator | p. 144 |
The first C: Communication | p. 145 |
The second C: Composure | p. 146 |
The third C: Credibility | p. 146 |
Making Your Case during the Homeowner Interview | p. 147 |
Preparing for your interview | p. 148 |
Presenting your case | p. 148 |
Examining the MHA Initiative | p. 150 |
Refinancing your loan | p. 150 |
Modifying your loan | p. 151 |
Structuring a Loan Modification | p. 151 |
Making the house payment affordable | p. 152 |
Catching up on deficiencies and penalties | p. 153 |
Addressing interest-rate issues | p. 153 |
Request Denied: Now What? | p. 154 |
Evaluating Your Lender's Initial Offer | p. 155 |
Deciphering a Loan Modification Agreement | p. 155 |
Checking the reference to your former mortgage | p. 156 |
Analyzing the unpaid balance | p. 157 |
Acknowledging the promise to pay | p. 158 |
Inspecting the monthly payment details | p. 158 |
Wading through any interest rate adjustments | p. 159 |
Inspecting any term extension | p. 160 |
Capitalizing or waiving penalties and other fees | p. 161 |
Steering Clear of Common Traps | p. 162 |
Dismissing the take it or leave it threat | p. 162 |
Waving off legal waivers to your legal rights | p. 163 |
Warning! Shifting interest rates | p. 164 |
Ducking repeated defaults | p. 164 |
Negotiating a Better Deal | p. 167 |
Recommitting to a Reasonable Solution | p. 167 |
What's fair for homeowners | p. 168 |
What's fair for lenders and investors | p. 169 |
Reminding Your Lender What You Can Afford to Pay | p. 170 |
Reminding Your Lender What It Stands To Lose | p. 171 |
Estimating the lender's losses in foreclosure | p. 172 |
Calculating the lender's losses from a loan modification | p. 173 |
Gaining a strategic advantage with what you know | p. 175 |
Not Taking ""No"" for an Answer | p. 176 |
Applying Some Subtle Legal Pressure | p. 177 |
Consider mentioning the B word: Bankruptcy | p. 177 |
Bring up concerns about predatory lending | p. 178 |
Have an audit performed | p. 178 |
Dealing with an Uncooperative Lender | p. 181 |
Brushing Up on Your Legal Rights | p. 183 |
Knowing Exactly What Your Lender Must Disclose | p. 184 |
Disclosing loan terms and costs | p. 184 |
Disclosing other important information | p. 188 |
Using the TILA and HOEPA to Your Advantage | p. 190 |
Identifying noncompliance issues | p. 190 |
Pushing for a resolution | p. 191 |
Leveraging the Power of RESPA | p. 193 |
Identifying RESPA violations | p. 193 |
Recognizing potential penalties for violations | p. 194 |
Getting Special Treatment: Military Servicemembers Only | p. 194 |
Auditing Your Mortgage Loan | p. 197 |
Recognizing Common Signs of Predatory Lending | p. 198 |
Inflated interest rate | p. 198 |
Inflated appraisal | p. 199 |
Doctored loan application | p. 200 |
Approving an unaffordable loan | p. 201 |
Equity stripping (loan flipping) | p. 203 |
High-risk loans | p. 203 |
Discriminatory interest rate | p. 204 |
Excessive or unwarranted fees | p. 204 |
Stiff prepayment penalties | p. 205 |
Requiring mandatory arbitration | p. 206 |
High-pressure sales tactics | p. 206 |
Recalling and Documenting the Experience | p. 207 |
Combing Through Your Loan Documents for Fraud Flags | p. 208 |
Comparing the GFE to the HUD-1 | p. 208 |
Inspecting the Universal Residential Loan Application (1003) | p. 209 |
Examining your mortgage and promissory note | p. 210 |
Hiring a Pro to Do It All for You | p. 211 |
Anticipating the Lender's Response to Any Legal Claims | p. 212 |
Applying Some Legal Pressure | p. 213 |
Filing a Formal Complaint with Your Lender | p. 213 |
Filing a Complaint | p. 217 |
Taking action at the state level | p. 217 |
Filing with federal regulators | p. 219 |
Contacting professional associations | p. 220 |
Following through on your complaint | p. 221 |
Filling a Lawsuit | p. 221 |
Ordering a mortgage audit | p. 222 |
Getting up to speed on the procedure | p. 222 |
Securing professional representation | p. 223 |
Calling the Cops | p. 224 |
The Part of Tens | p. 225 |
Ten Tips for Long-Term Success | p. 227 |
Get the Best Deal You Can | p. 227 |
Get Credit Counseling | p. 228 |
Try Modifying Other Loans, Too | p. 228 |
Prioritize Your Debt Payments | p. 229 |
Slash Discretionary Spending | p. 229 |
Pay Yourself an Allowance | p. 230 |
Haggle Over Every Purchase | p. 231 |
Moonlight to Earn Extra Income | p. 232 |
Put Everyone to Work | p. 232 |
Check Your Progress | p. 232 |
Ten Common Loan Modification Myths | p. 233 |
My Bank Wants To Take My Home | p. 233 |
My Credit Score Is Too Low | p. 234 |
I Can't Qualify until My Loan Is in Default | p. 234 |
I'm Better Off Declaring Bankruptcy or Walking Away | p. 235 |
I Can Negotiate Myself For Free | p. 236 |
It's Too Late to Modify My Loan | p. 236 |
The Lender Doesn't Have to Negotiate | p. 237 |
Upfront Fees Are a Scam | p. 237 |
I'll Lose My Home If I Don't Qualify for a Loan Modification | p. 238 |
I Can Modify Only the Loan on My Primary Residence | p. 238 |
Appendixes | p. 239 |
Resources | p. 241 |
Major Lender Web Sites and Customer Service Numbers | p. 241 |
Consumer Support and Federal Agencies | p. 245 |
Consumer support | p. 245 |
Federal agencies | p. 247 |
State Attorneys General | p. 251 |
Glossary | p. 255 |
Index | p. 263 |
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