Dummy Proof Your Way to Foreclosure Workout Help

Last evening I watched my father-in-law die.

 Lesson:

If you have your health and your loved ones…everything else can be fixed.

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Today, I took a call from a distressed homeowner calling from Virginia.
Her sale date is scheduled for tomorrow. She thinks.

Reportedly, she spoke with her lender on Monday and was told that the sale would be postponed for one day to allow her to submit the downpayment contribution and sign the forbearance agreement [on Thursday].

The sale was originally scheduled to be held today [Wednesday].

I asked her about the conflict of the signing of the agreement and the sale date…she became defensive. I asked if the postponement had been verified with the foreclosing agent. She said no. I asked if the lender had provided a new projected sale date. She said she didn’t know. I asked if she had a formal agreement in hand [a written offer from lender signed by her in acceptance]. She said no. I asked if she was sure the sale had not taken place today. She was adament that it hadn’t.

Why?

Because the lender whom she had last spoken with on Monday [and hadn’t heard from since]said they would postpone the sale for a day.

Is this making sense to anyone?

My recommendation was to 1. determine if the sale had actually been rolled over; 2. consider bankruptcy if the sale was scheduled to take place mid- to late- afternoon tomorrow. 3. trust common sense.

The caller fought with me a bit over whether the sale had actually been delayed. Her mind did not even want to accept the possiblity that it hadn’t. The caller fought with me over the feasibility of filing bankruptcy because …”it might upset her credit”.
The caller did not appreciate it when I said there is a reason the legal counsel she had sought prior to contacting Reinstatement Services had not taken her case. I told her they were hearing the same thing I was. She had no real standing.

She balked at this suggestion as to why 2 different attorneys had vanished and the third had told her..get this…” she had a case but he couldn’t help because …his practice was too busy”.
I told her he had refused her representation because he saw no money in the effort. She reacted as if I had stomped her crucifix.

Lessons anyone?

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Have you ever held interface with an air traffic controller under stressful conditions?
I did recently and, basically, I have developed a new found respect for those working in that profession.

Here’s the story:
Tom phones in a consult. Articulate. Brevity of words, yet thorough in his explanation concerning why he required our service.

In a nutshell, his wife had been out on a maternity leave due to a complicated pregnancy which impacted the level of income. Wife had since returned to work so income was no longer a negative factor.

The investor was a mainstream lender [one of the big 5] so no major complications were anticipated.

The challenge: Sale date set in 5 days.

Knowing this, we hit the ground running with no time to spare.

Tom submits all of the documents the very next day so we’re able to deliver to the lender. FAST!

Lender contacts almost immediately with good news:
“We can work this file, we just need proof of the hardship.”

No problem, I think. A baby has been delivered. Who can dispute that fact?

So I contact Tom, its 3 days before sale, lender needs additional docs, I report.
Tom calmly says he’ll work on compiling hospital receipts and’ll fax them over the next day.

Next day. Close of business. No baby docs.

I contact Tom the following day [1 day prior to sale]. Reiterate my request to the automated secretary. Periodically throughout the day I leave voice messages for Tom. With each call I become a little more anxious. Finally, 1 hour before lender close of business, Tom calls. He has forgotten to bring the documents to work with him but will fax them over in the morning.

The morning?
The MORNING?

Did he remember there was a sale scheduled?

I am now in a very animated state!
Listen Tom! [I can feel my control unraveling]. You’ve got to get me those documents NOW.
The sale is set for tomorrow and if your lender doesn’t have them then you are going to lose BIG TIME!

I actually think Tom yawned.
I think he said in a very nonplused voice, “I’ll leave work in about an hour and fax them to you then”.

I use the phrase “I think” because my heart was by that point racing and beating so loudly I could barely keep my seat. We’re headed for a head-on collision and Tom is out for ice cream.

I hang up from Tom and call the lender who is less than amused. Luckily she’s on the late night schedule so she’s agreed to await the fax. We make arrangements for her to leave me a voice message verifying receipt of the fax.

She also says something I had never heard before or since:
“Because of the lateness of the hour, Tom will have to attend the sale and tender the downpayment contribution and the signed Agreement to the trustee hired to process the foreclosure action.”

Bizarre.

I call my rock of a client, Tom.
“Tom,” I say. “You’re going to have to go to the sale.”
“Okay.” he says. “I’m about to fax you the proof.”

Proof arrives. I fax it directly to the negotiator. [I’ve decided to work until I receive verification of the proof and then the forbearance Agreement]. The negotiator calls within the hour. She’s sending the Agreement my way.

I call Tom and alert him to the impending arrival of the contract. He is watching JAG.
I ask him if he has the certified funds in his possession. I ask if he knows where to go. I ask if he has told his boss he’d be in late the next day.

I can hear the smile in Tom’s voice as he says, “Don’t worry, Doc. It will be ok”.

I hang up in frustrated awe.

Next day. Tom makes it to the sale. Just barely. His house is due to be auctioned next. He presents the trustee with the required deal solidifiers. And he’s back at work.

I receive a call from Tom later that day thanking me for the smoothness of the “ride”.

I hang up from Tom and call the negotiator. We’re experiencing that bonding typical of those who have been through a MAJOR ordeal together.
She is just as shell-shocked as I.

Lesson Learned:
Flying over MI when Tom is on duty is probably the safest time to fly.

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Bad things really do happen to good people!
If you don’t believe me, just ask the Thompsons [name changed].

The Thompsons contacted Reinstatement Services at the end of last year looking to secure a workout as an alternative to foreclosure. In Feb’07, the first workout was secured.

Terms of the Forbearance - homeowner to make 3 consecutive payments [March, April, May] of $2,150.00. Pending timely payments, the loan would be modified in June and $28,262.92 would be absorbed into the principle balance.

June 26th, Mrs. Thompson phones in a panic.

“Our lender is not going to do the modification!” Mrs. Thompson has a really nice sounding french accent so I am momentarily enthralled before it dawns on me that she is delivering bad news.

“What do you mean, they’re not doing the modification? That doesn’t make sense, we’ve got a formal agreement.” I’m puzzled but have done this long enough to know there is more to this story.

“Well…I call them up and they tell me to stop making the payment for June because they could not do the ‘mod-ee-fee-kay-cee-own’ [I love the french] until I get the lein off ‘ov’ the title.”

I let go of the seduction long enough to realize something about a lien on title has the workout’s survival teetering on a very thin wire. Snap out of it, I tell myself…she’s a girl anyway, what are you thinking. Focus on the words. Focus on the words.

So I begin to do just that.

“What lien are they talking about?” I inquire.
“I don’t know”, comes the response.

So I do what most professionals would do in my position, I hang up.
…but not before I say, “we’ll have to find out. But before we do that, what’s this business about not making a payment?”

“I don’t know that either. I called and they told me not to make the payment. So I didn’t.”
“O-k-a-y…but why didn’t you phone me to tell me of this new development?”
“I thought the lender was working on fixing it.”

Sigh!

I quickly gather, this is not going the way I’d like and I’m starting to have second thoughts about allowing the seduction. Also, I’m starting not to like the french. So I sign off stating that I’d call back as soon as I spoke with the lender.

Here’s the deal.
I speak with Judy in the Loss Mitigation department who promptly informs me that she can’t move forward with, basically, the deal of a lifetime, because of a $1,196 lien on the property report. I ask what it is…she says she’s pretty sure its a utility debt but has no further information. She says since the end of May she’s left a series of messages for the homeowner requesting call returns [to no avail] before closing file and sending a forbearance denied letter out.

I chat Judy up for a bit [see, I’m not opposed to kissing up] and get her to agree to reopen the file. She says she’ll do it but only for a week. We need to submit proof of paid lien by July 5th.

I call Mrs. Thompson and relay the news and the deadline. She says great she’ll work on isolating the utility lien and making the payment.

I call in my assistant and order out a batch of McDonald’s fries. Second workout secured…I’m back in love with the french.
I’m ready to be supersized!

Sometime around Monday, July 16, I realize I’ve not heard back from the Thompsons. I can’t email. Thompson’s have no email access; so,I call. Voicemail box full. Can’t leave message… but I listen to their outgoing message twice anyway since it is delivered in both English and French!

I wait.

Mrs. Thompson calls back shortly [Thank God for caller ID. Sometimes.].
“Hi,” she says. “I see you called.”
“Yes. I wanted to touch base to determine if you took care of the lien. We’re way past the deadline imposed.”
“Oh,” she says. “I just made the payment on Friday. Did you get it?”
“Get what?”
“The payment.”
“Did I get the payment?”
“Yes.”
Now I’m really confused. “Did you make your lien payment to RSI?”
“No, I paid the sheriff.”
“Has the lien been cleared?”
“I don’t know.”

Here’s a little known k——-fact: If it weren’t for my lack of patience…I’d be almost the perfect being.

I sigh.

“Mrs. Thompson, we had until the fifth to get the information to your lender. That has long been passed. Are you still interested in keeping the property?”

She says yes so I say then I need proof of paid status to submit. She says she’ll fax it tomorrow.

Fast forward to real time - TODAY

Mrs. Thompson faxes over the proof. Indeed paid on Friday. I call lender to announce I’ve got the golden goose in my hand. No such luck.

Judy closed the file on Thursday, July 12th and sent it back to the foreclosure department.

We’ll have to start from scratch.

The Thompsons will have to swallow the bitter pill of having to pay RSI again to rework the file.

As for me… well, I’ve sworn off french fries indefinitely.

Lessons:

1. A French accent will only take you so far before the honeymoon phase fizzles out.
2. If you are working with a third party service, make certain they are kept informed. Complications can be warded off with a quick call to your expert.
3. Liens ALWAYS affect loan modifications. Make certain title is clear or documented payment arrangements on the lien debt have been made to avoid jeopardizing a loan modification workout.

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Right now I’m bent!
I’ve got this client…nice guy…stockbroker…had fallen on hard times.

He comes on board with Reinstatement Services, Inc. about 2 months ago. Complicated story (house in someone else’s name, large mortgage [$1,000,000 range], decrease in income [monthly payment close to $9K/mo])…but an easy enough fix.

We get to work; except the requested docs are coming in REAL S-L-O-W-like. Financial statement complete…check stubs now dated. Resubmission brings check stubs current…bank statement now stale.

Aaayee!

We get client to agree to submit everything together….Finally!
We review packet, attempt return to client requesting signature…client’s phone is disconnected! Email tied to phone, no way to reach in a timely manner.

So now I’m steaming. No access to client; and as if this weren’t enough, a sale date has been set.

Great?
Soooooooo freakin not!

Two Lessons:
1. A workout packet paints the picture of what is going on in the home. Delayed documentation suggests trouble is still circling. An incomplete file opened with the lender for greater than three weeks as the wait for trailing documentation ensues spells - SLACKER! A homeowner seeking assistance who is serious about securing a remedy will work to bolster lender confidence by presenting in a manner which inspires confidence.

2. Considerations for remedy should be submitted to the lender when the mortgagor is ready to move forward at a moment’s notice with solidifying a forbearance agreement contract.

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Let’s clear the air at the outset. This Foreclosure Blog is about loan default management, mortgage finance forbearance / workout education, and strategic loss mitigation positioning. Period.

If you’ve come here thinking you’ll get a caisson to support a make-believe world built around the phrase “its not my fault” you are in the wrong place; you’ll want to head next door.
If you’ve come to find out how to STOP FORECLOSURE and / or secure Foreclosure Help, then you’re in for a treat.

Factually speaking, your loan is in default because of you. It is your fault. Accept it.

I find when we own the fault, we are more apt to accept responsibility for the fix.

Now that the fault has been assigned, let’s focus on how you’ll go about fixing your mistake so that you win. Just remember, losers focus on shifting the blame. Winners concentrate on reaching the goal.

I believe in leading by example. Literally. So, take a look at the following scenario.

Example:

Many homeowners get stuck in “my lender doesn’t want to work with me” mode. In most instances that statement is a lie. It happens something more like this:

I took a call this morning from an irrate mortgagor, who started the call by saying, “my lender is an a**-hole, I hope you’re better than they are.” I reassured the caller that the most recent name I’d been called was a “drama queer” which in my book ranks higher than being the butt-end of someone’s (well you get the picture).

The caller returned an I’m-not-yet-impressed sound of tolerance before plowing forward. “Like I said, I talked to my lender earlier and they want $7,000 to put a workout in place. If I had that kind of money, I wouldn’t be in this situation to begin with. I want them to put the money on the back of the loan.”
I asked, “how much is your reinstatement figure …the amount needed to bring the loan current?”
The caller said, “well, I think about…I don’t know…well maybe if, (hedging) well the lender…”

How much do you owe?” I asked again a little more firmly.

Slightly less audible, the caller responded, “I think about $38,000. But the lender…” (voice picking up steam again)…said they needed the money by this Friday and I’ve been trying to come up with it but I needed to pay my other bills so…they just won’t work with me.”

Silence

“Is that today’s valuation or a projected futures?” I ask.
“What?”
“The valuation. Is that today’s or projected futures?” I come again.
“What?”, the caller says.
“The $7,000,” I say. “The downpayment. You said if you had the money for the downpayment you wouldn’t be in this situation but that doesn’t seem quite right because I calculate a balance owing of around “$31,000 after the downpayment is deducted. So I guess I’m just trying to understand how the $7,000 downpayment will have provided the type of resolution you’re suggesting.”

The caller is pissed. But then, so am I. Liars and shirkers really chap my hide!

In the brief, contemplative silence that follows (the caller is doing some calculations of his own. He’s fighting the urge to hang up), I take control of the situation even as his mind is tracking my value.

I say this: “I’d like to help you out, but I believe in factual representation. If we deal in facts, we have a better chance of affecting a positive result. So let’s start again. What’s the reason for the hardship?”

“Well, I lost my job last August…,” and the call moves forward from there.

After a few core questions, I’m able to make an assessment.

The caller has $4,000 in his possession. The loan is conventional. A sale date hasn’t been scheduled. The loan is a little more than a year old.

“When will you have the money that the lender is requesting?” I ask.
“In less than two weeks. My next pay check.” …comes the response.
I look at my calendar and smile. Its the sixteenth day in the the month. “You’re in luck! Since it’s the middle of the month, realistically, your lender just needs to receive payment by the end of the month. That puts you within the time frame of your next paycheck. So let’s get your lender on the phone and get you that extension”.

We manage to speak with the negotiator assigned to process the workout. She goes through the series of qualifying information with me before asking the purpose of the call. I go through my schpill. “Dr. L…, RSI…Mortgagor on line with us…we’ve got a slight problem that we’d like assistance with. We’d like to wire the downpayment on the last business day of the month.”
The negotiator places us on hold for a bit before coming back with the approval. We gel up receipt of a modified workout contract and conclude the conversation with a thank you.

The previously irrate homeowner is now a cuddly teddybear. Cost to lender: $0s. Cost to homeowner: PRICELESS.

Moral of the story:threefold.

1. Lenders never take kindly to accusation and blame. Even when they are dead wrong. Remember, you want something from them. You stand to lose a lot more than they do, so act like it. (A little butt kissing never hurt anyone.:)

2. If your payment is due on the first of the month, a workout plan can be written to reflect a last business day of the month arrangement. Let the negotiator know that this works better with your paycheck schedule. Throw around words like “anxious to avoid a broken agreement”; “would really like to be able to honor the agreement”; “am embarrassed by the default and plan to do everything in power to return the loan to a preforming status”. This scores points with the lender’s psyche (which is what you’re playing to anyway) and refocuses their attention on providing a workable solution.

3. If your loan is less than a year old, the likelihood of securing a loan modification (absorbing a good portion of the delinquent amount into the principal balance with adjustments to term, interest rate, or monthly payment) is almost non-existent. Insurer guidelines prohibit most from modifying loans with little or no history.

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Welcome to Reinstatement Services, Inc., my little slice of real estate in the All-Foreclosure world.

So far as the world wide web is concerned, this is one of the most real places to be…virtually. Except for the photo. I know what you’re thinking. What a GREAT looking fellow. Well, guys you can put your competitive hats away and girls you can refocus. Its not me. It is a representation of the smile that is in store for you as you uncover the tools to dummy proofing your way to foreclosure workout help.

Meanwhile, thanks for dropping in. Take off your shoes and help yourself to a drink. Its time to get personal.

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