Can't Refi? MODIFY!

There is a lot of talk going around about whether loan modification is a good thing or not. Well, whether you agree with it or disagree, if you take a look at the big picture, you might see that it is helpful for the moment. And yes, I understand that there are a lot of really responsible folks out there that have been paying their bills on time and have been completely responsible, but if our economy collapses we will all be in trouble.

What I am not saying is that it is the right thing to do, I am saying that it represents an unprecedented opportunity to set things right with your own personal finances. There were a ton of companies that made money off of what we are now calling "predatory" loans. I have seen some ridiculous interest rates and the problem is that many people never fully understood the implications of the loan that they were signing...many did, but by and large many did not...Why is that? because many of the loan officers who were soliciting and selling these loans didn't understand the implications of those loans.

One way to offset the lack of education is to work with loan officers and mortgage professionals that are affiliated with the National Association of Mortgage Brokers, or NAMB for short. This organization adheres to the highest standards for ethics and they encourage and support education in the industry.

But let me get back to my point...Many loan officers did not have the first bit of financial training, yet they were offering advice to folks about the biggest investment of their lives...That is a major problem. You can bet these loan officers were not telling people to make sure that they had adequate insurance protection on their family and to make sure that they were contributing the maximum amounts to tax deferred retirement accounts. You can bet that most of these loan officers were not telling their clients to be careful and set aside reserves for down times. That is what makes me angry. You know why none of that was happening? because there is no legal reason for these loan officers to be telling you these things.

Why is it, insurance and financial professionals need to go through rigorous licensing requirements and background checks, but loan officers do not? This is absolutely amazing! The fact that someone can get a $200,000 loan from someone who is completely uneducated about money, but they have to seek professional counsel for putting $100 away per month in an IRA or 401k? The logic is beyond me.

And while I am on this topic, why is it that most of these loan officers that were hawking these loans now in dire straits themselves? Well, the obvious reason is that they didn't understand sound financial concepts and were giving dangerous advice...advice that they were taking themselves.

Ok, so back to loan modifications. If you find yourself in the position of needing a loan modification, you can do a few things yourself that will greatly improve your chances of getting some help. This is not an all inclusive list, but certainly take some of this advice and throw out what doesn't work...

1. Don't present yourself as a victim. Once a victim, always a victim. Be positive when you are talking to the person on the other side of the phone. Believe it or not, it makes a tremendous difference. Nobody wants to talk to a person who is a "downer" all the time. People like to talk to energized positive people. If you are not one of those people, become one, at least long enough to get off the phone.

2. Make a friend on the other line. Banks are up to their necks right now in loan modifications. They have departments that are set up to handle these transactions. When you find someone that sympathizes with you, MAKE A FRIEND. Connect with them, make sure you get their extension number. It is not going to hurt you, in fact it will most likely help you. Each person that you speak to creates notes in your file. You might as well get the best notes possible in your file. You may even find that you have an advocate on the other side of the phone. One day it may come down to that person making a recommendation on your file and you want that person to make the decision in your favor even if it only buys you a little time...Sometimes that is all you need.

3. Once you get an offer, even if it is an awesome offer, don't display any emotion...simply ask "is that the best you can do?" Don't sign anything immediately. Sit on the offer for at least 48 hours. As uncomfortable as it is, do your best to get a better offer. You already know that they are willing to work with you, now see how deep they can go. Trust me, the first offer is generally a smoke screen...don't jump on it. Ask yourself if this is truly going to help you six months down the road, or even a year. If you are going to be in the same position, then ask for more or else it just doesn't' make sense. Keep in mind that once you have completed and signed your loan modification, there is very little chance you will ever get the opportunity to modify your loan again. So make sure that you are getting the best deal possible. .

These simple things won't guarantee that you are going to be successful, but none of them are going to hurt an already bad situation.

Good Luck and God Bless...hang in there and know that you will make it through this one way or the other.

Rob

http://www.LocalRealEstateDeals.com