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.