Loan Modification Under California Law
Recent Loan Modification studies have shown that a large percentage of traditional loan modifications put the borrowers more upside down than when they started.
Unfortunately many loan mods are leaving people with higher monthly payments. In many loan modifcation the money you did not pay gets tacked on to the back of the loan... Increasing your loan balance and making you more upside down.
Before you go into default on your loans at the advice of some former subprime loan seller, make sure you understand that absent finding some legal leverage over the lender you have a good chance of seeing your payments going up.
Our Loan Modification program includes
1. Upside Down Analysis
2. Qualified Written Request and offer of Loan Modification
3. Letter informing lender of clients election to pursue remedies carved out by recent California Law and or Federal Programs
4. Letter Disputing debt (if advisable)
5. Cease and Desist letters (if advisable)
6. Follow up, contact with negotiator, and negotiation by an attorney when needed.
By now many of you have read about all the Federal Governments Loan Modification Programs. Others have been cold called by a former loan brokers offering to help you with your Loan Modification. Its odd that many of the brokers who put people into these miserable loans are now charging people up front to get out of the them.
Before you spend thousands of dollars with someone, do an investigation:
1. Is the person licensed by the California Department of Real Estate? Or, the California State Bar?
2. Are your potential representatives aware that have to be licensed according to the DRE (if they are not California Licensed Attorneys)?
3. Are they asking you for money up front? They are violating the California Foreclosure Consultant act if they are neither CA attorneys nor perhaps Real Estate brokers in possesion of a no opinion letter from the California Department of Real Estate? Note... if a Notice of Default has been filed against your residence only attorneys acting as your attorney can take up front fees. Don't fall for "attorney backed" baloney. Are you retaining the services of the attorney or not?
4. If your potential representative is not an attorney make sure he or she is a Real Estate Broker capable of proving their upfront retainer agreement has been given a no opinon letter by the DRE. (As of November 2008 - only 14 non attorney entites have been "approved by the DRE.)
5. If somone says they are attorney backed - ask to speak with the attorney. What does attorney backed mean? From what we have seen it is usually a junk marketing business being run by someone who has not been able to get approved to charge up front fees.
6. Find out how your loan modification people intend to gain leverage over the lender.
7. If you are offered a loan audit or a Qualfied Written Request under RESPA letter - will an attorney be doing the negotiating against the lender? Will you have to hire the attorney after you pay for your loan audit? Doesn't that put cart before the horse?
8. Will it do you any good to have a loan audit done if you later have to go out and retain an attorney. You want to retain the services of an attorney before you pay for the audit. The loan audit is the profit center; negotiation takes time.
9. What kind of results should you expect?
10. Who will be doing your negotiating?
11. Will the Loan Modification request go out on Legal Letterhead?
12. How much will you have to pay? Are you looking for a typical loan mod result or are you looking to leverage the law in the hopes of getting a better than average loan mod result.
13. What if your are not satisfied with the loan modification offered by the lender?
14. Should you go into default on both loans prior to requesting a loan modification? Why? What happens if the loan mod does not work out to your satisfaction? (very important question.)
15. Will an attorney review the terms of your loan modification with you? Will you have to waive your anti-deficiency protections if you sign your loan modification paperwork? Will an attorney help you leverage recent changes in California law in an attempt to get a substantial reduction in the principle?
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Last Updated ( Monday, 20 April 2009 )
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