Everyone has heard about the newest Obama backed program to help homeowners.  I am not questioning this program or its message.  I think this program has practical application to serve many distressed homeowners in contrast to past programs from 2007 that were almost complete failures.  The judgment that dictates success vs. failure is gauged by the programs ability to help people stay in there homes with an intermediate to long term solution.  I want to focus on the new message with a serious warning to unsuspecting homeowners.

 

The object to keep everyone in their homes that wish to stay is a good one but we need to drill down on the methods of the lenders that are separate from the voice of our government.  This is the key.  Caveat Emptor or buyer beware also applies to the unsuspecting homeowner.  Read on and decide for yourself who is on your side. 

 

When you call your lender with a mortgage problem, a question when you are minorly delinquent, etc. you will many times hear this new message:

 

The government and the lender want you to know that many people are being prayed upon with loan modifications and the likes.  Anyone requesting money up front or giving you guidance not to make your mortgage payment is suspect and looked upon as a fraudster. 

 

In other words, steer clear of these groups and individuals, because we are your lender and your friend.  We obviously have your best interest at heart.  You are our customer.  Ok, sounds great doesn’t it.  In the real world there certainly are crooks that will take your money and do nothing for you.  Keep in mind not everyone is a crook and that you may need professional help with a Loan Modification of Short Sale to avoid much more serious consequences.  At this point I am going to completely refrain from voicing my opinion on the subject of this message as being “Truth or Deceit”.  I am going to give you a real life example so you can come to your own conclusion.

 

Last week a guy came buy my house to do some work on my pool.  I was ordering a safety cover out of concern for my family and neighborhood kids.  I expressed my strong desire to ensure that the pool was a safe place. I don’t want anyone to drown on my watch.  This guys name was Dave.  Dave said he completely understood.  Somehow the conversation went to his family.  He said he had seven kids.  We laughed.  I asked him if he was Catholic.  He said no but he had it all figured out.  Apparently every time he would bring up the subject with his wife about going back to work she would end up pregnant with another.  We laughed again.  He acknowledged he was truly blessed with a family.  Then out of nowhere he made a profound statement.  He said,  “I have a great family but no money” .  We started talking and it ended up he was completely broke and living hand to mouth with a monthly subsidy from his brother.  He went from laugher to a stressed out soul and he was dying to tell me his story.  I was drinking my coffee and I had time to kill early in the morning.  Here is his story:

 

He had a property he lost to foreclosure over a year ago.  It was an investment property.  He lost this property to save his new primary residence where he and his family lived.  Around the same time he lost this property he applied to his lender for a Loan Modification.  They told him he was eligible. Keep in mind this was about a year and a few months ago.  As part of the eligibility he obviously had to jump through some lender paperwork and compliance hoops.  We have all heard of those.  He ended up going through a forbearance period.  In the end he did obtain a Loan Modification.  An approximate $3.000 monthly mortgage payment was reduced by a net of $60 per month.  Congrats, right?  Wrong.  In the process the lender played this family’s good moral character to the poor house.  Over the term all of their savings and retirement accounts were slowly and voluntarily sucked into the lenders grasp.  The $60 solution was hardly a solution at all. This guy has been getting a $900 per month subsidy from his brother every month over the past year just to survive.  He is now totally broke with nothing but a paycheck.  He literally has nothing.  Is this in your judgment part of the plan by the lenders to get their money back or really part of the solution and our government’s intentions for the public? 

 

Frankly this is the scam that the lenders are pulling on people nationwide.  Don’t seek help from someone that will represent you and level the playing field to keep it fair.  This is our mission statement.  Your lender wants to keep it fair for you.  After they are done with you and you are flat broke what do you think happens?  The story continues:

 

I told him the only thing he could do at this point was to call and try to seek a remedy from the newest Obama plan.  He told me that he was ashamed to have to take money form his bother every month.  He put his head down almost to sob.  This is the part of this crisis that I hate.  The human toll is terrible.  I told him he should be grateful to have such a brother and that if his brother had money he surely couldn’t take it with him.  That made him feel better.  I gave him my personal contact information and told him to follow up with me after he contact his lender.  He called me two days later with the results. His lender said he made $48 too little to qualify for any of the plans and that his investor was a private lender.  They then went on to inform him that they only offer one Loan Modification per loan over the life of the loan.  It is blatantly obviously to everyone reading this blog that a reduction of $60 per month for a family of seven children after you have taken all their verifiable savings over the course is a disgrace.  Then they apparently exposed the evidence of deceit in a final blow.  They told Dave that at this juncture that if he did not make his payments they were going to foreclosure on him and he would have to vacate his home. That was it.  Unfortunately this is verifiably happening to many unsuspecting people.

 

Now, as an expert in the field with twenty years of extensive lending experience, I am going to give it to you straight whether you want to hear it or not.  Here is how the game is played.  If the lender can string the process out and get all of your money in the process it actually doesn’t hurt them, rather it helps them.  These loans are already the majority reserved for losses on their books.  All the write offers were taken in the past year during the crisis.  The lenders were required to reserve and increase capital to satisfy the government and the markets.  Now they are in the recovery mode and you may owe them money.  They don’t have rights to your retirement accounts and every nickel you have unless you capitulate it to them. 

 

The moral here is don’t trust your lender nor your government.  The government has saved the free markets and the financial system.  As I have said before, you are on your own.  No one has to end up destitute and in despair as Dave has in this example.  This does not have to happen and it doesn’t happen to any of our clients. Nobody that I represent or give advice to will go down this path.  I am passionate about this statement as my next blog is going to illustrate with three very recent examples of what I call Grand Slam Home Runs with Short Sales.  I am going to give you play by play examples of three people in very difficult situations that walked away from $630K, 390K and $285K respectively while not going broke and at the same time providing a real solution to their lenders.  All of the advice and time I spent with Dave was free and much of what we offer is free.  All you have to do is get motivated to help yourself.  Start today.  Investigate a Real Estate Short Sale at www.thenegotiatedsolution.com .  Sign up for the 2 hour video.  The cost is nothing but your time.  We designed this program to separate our team from the crooks and fraudsters on the basis of quality and credibility.  No money, no credit cards input, only your time and desire to help yourself. We help the people level the playing field, keep it fair, and win! Caveat Emptor to the homeowner!

 

GHunter, Blogging from the front line of the housing crisis.

Submitted on Wednesday, October 7th, 2009 at 9:54 am