Loan Modification HAMP -v- Conventional

Good morning

Today I'd like to clarify the differences between the Governments HAMP program, and what I consider "old fashioned" common sense banking AKA conventional modification

The other day, I had a client accuse me of "ripping him off" because his lender told him that all the work I'd done for him. they would have done for "free" ...

In the loose sense, yes..lenders will do this "free" of cost (although it's costing tax payers billions) however, it's not an "automatic" nor an "entitlement" ..The Federal programs still require a tremendous amount of work - Preparing the numbers (expense's versus debts) hardship letters, etc,etc.....it can quickly become very, very complicated and overwhelming for the average person ... Such was the case in the above mentioned client's case - Very complex.

This particular client went through a divorce, and to save the house from being taken / given to his ex wife, he convinced his elderly, retired Father to refinance the house into his name but leave (the Son) him on title only .. The Father did so thinking he was helping his son ..

Long story short, they found an out of State mortgage broker who threw them both under the bus in one of the worst loans I've ever seen ... NINA (no income / no asset verification) Interest payment only, adjustable rate with a payment (interest only mind you) totaling more than the Father makes per month in his retirement / social security ..To make matters worse (if that was even possible) this mortgage broker even tacked on a home equity line of credit!!

So now we have an 80 year old retired man living on a fixed income of less than $3k per month owning two homes with combined mortgage payments totalling over $5000 per month ..The Son is self employed which makes verifying his income a nightmare .. Are you starting to see the challenges?

The Son lives in the house but is not on the mortgage - Unbeknownst to me, the Father did not actually occupy the property, and lived in another house with his wife. Basically, the Son lied to me about this very important detail - Under HAMP, this scenario is an immediate dis qualifier as the homeowner MUST occupy the property - Period - No exceptions

The Father / Son hired me 6 months ago - The home was in serious default and was scheduled to be sold at auction within less than 3 weeks from the time we all first met ..The clock was ticking / and ticking fast - After meeting with my clients and gathering their paperwork, I returned to my office, immediately faxed their authorization form to their lender and began conversation with them -

Within less than 24 hours (and after sorting out financials / details, etc) I was able to get the lender to approve a 3 month trial program under HAMP.. Another minor miracle as using the Son's income to qualify was "iffy" but the lender allowed it - This immediately stopped the foreclosure sale, and "bought" (figure of speech) my client 3 more months to stay in their home.

During this time, I contacted our State's Attorney Generals office to pursue predatory lending charges against the broker who put this loan together, and threw my client's Father under the bus .. Rarely do I ring the predatory lending alarm but this loan was SO jacked up, it demanded an investigation ... The AG's office agreed, and opened a case - This postponed any foreclosure even longer -

While the AG's office was investigating, the lender was still working on the trial modification ..It was denied after the trial payment plan due to the lender learning the Father did not actually occupy the property - Another "surprise" for me -

The AG's office concluded their investigation and basically told my client's to hire private legal counsel blah blah blah ...Still uncertain why that investigation fell flat - I can only assume the lender has deep pockets, and very good lawyers ..

So..now I have a HAMP denial, and the AG's office dropping the ball ... The lender immediately reinstated the foreclosure sale date and scheduled it for two weeks into the future! Again, I'm on the phone with the lender, and their attorney's trying to put the fires out, and I did - The lender / their attorneys agreed to re-open the case, and re review it for a "conventional" modification - This review is still pending by the way -

The Father had had enough, and simply wanted out - As he's the only one on the mortgage, he's the only one that will feel the full impact of the foreclosure .. He asked me to put him in touch with a good Realtor to short sale the home, and I did ... This Realtor specializes in short sales and is very knowledgeable and reputable ..The Son NEVER followed up with the Realtor and left his Dad hanging ...I contacted the Father, and gave him the Realtors direct number & strongly suggested he bypass his Son, and meet with the Realtor himself ..Apparently the Son talked him out of it as my colleague told me no meeting has ever been arranged ...

The point of all of this is to demonstrate how much work actually goes into securing a HAMP modification ..Of course not all scenario's are this dramatic / complicated but, this one was a real roller coaster ride!

I also want to mention that all this work was done WITHOUT my being paid in full - I mobilized a small army of professionals to assist this client, and did so on the honor system .. I still haven't been paid for my work & doubt I ever will be - This client promised to pay me over one month ago ..Never happened - Phone calls went unanswered - voicemail messages ignored / un-returned - Excuses being made by the Parents etc,etc..

Now this guy's accusing me of "ripping him off" ...How convenient eh? What better way to get out of paying for services rendered than to cry "foul" and "victim" ..I've seen it many times before - It's sad - Unfortunately, there's no agency / organization I can go to and complain about being burned - I just have to suck it up

The point I'm driving at here is this ....

Although lenders will do this for "free" it's not as simple as just picking up the phone and asking nicely ...There is still a great deal of ground / preparation work that must be done, and even more monitoring work "babysitting" the lenders to insure they've recieved all the paperwork, understand what they are reading, and that nothing gets "lost" or falls through the cracks .. It seems like "babysitting" the banks has become the most challenging part of our work these days!

HAMP is not "guaranteed" nor is it an "entitlement" .. It's a Federal program with very complex guidelines / restrictions ..it is not a "freebie" or a "one size fits all" program - Not everyone qualifies equally -

Another point is this ...If you choose to hire a professional to do the work for you - Pay them! Just because the lender's assist for "free" does not mean professionals work for free! If you want it "free" ..do all the work yourself - I'm sure you'll quickly discover how difficult it really is!

Yes...there are scam artists preying on America's misfortunes, and consumers must be very careful / cautious HOWEVER, this applies equally to "us" - We too have been burned many times, and need to be cautious -

I am an honest businessman, and a credentialed, qualified, experienced professional - I do not / will not mislead any client into thinking our work is "easy" - I do not make empty promises or offer false hopes. I do all I can to make sure my clients fully understand what we are going into, and that we go into it "eyes wide open" -

Like any other professional, I'm entitled to be paid for my time, experise, and services .. No one works for "free" do they? Do you? Of course not ...Why would anyone expect us to?

What I'm saying here is that if you choose to hire representation, you should fully expect to pay them for their services!